INTERNATIONAL REAL ESTATE DIVERSIFICATION — A VIABLE INVESTMENT STRATEGY

As 1987 progressed the reverberations of the Big Bang continued to send shock waves through the investment markets. One such wave, which emanated from ‘deregulation’, is enhanced international portfolio diversification opportunities for the investor. If real estate is to compete successfully with other investment media and other financial centres also in the process of deregulation, it must urgently adapt to meet this challenge. Property analysts must respond positively to this global investment market by providing new and diversified real estate investment opportunities for the investor — the alternative is to allow real estate attractiveness as an international investment option to sink into a decaying trough. As a response to this challenge, I recently undertook research into the potential benefits of diversifying funds into international real estate assets supported by the use of correlation analysis. The findings and implications are relevant to any institution or individual which has the resources globally to expand or establish a real estate investment portfolio.