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The significance and performance of retail property in Australia

The significance and performance of retail property in Australia Purpose – Retail property is an important property investment sector. The purpose of this paper is to assess the importance of retail property type, size and region in Australian retail property and the strategic role of direct retail property and retail listed property trusts (LPTs) in a mixed‐asset portfolio. Design/methodology/approach – This paper analyses the performance of retail property in Australia over 1995‐2005 for both direct and indirect retail property. Risk‐adjusted performance analysis is used to assess the added value of retail property in a mixed‐asset portfolio, with the portfolio diversification benefits of retail property also assessed. Findings – The paper finds that retail property and retail LPTs have delivered substantial risk‐adjusted returns and portfolio diversification benefits over 1995‐2005. The retail property sub‐sectors of retail property type, size and region have different performance characteristics; particularly highlighting the substantial role of geographic diversification as the most effective portfolio diversification strategy for retail property investors. Direct retail property and retail LPTs are also identified as having different performance characteristics and each contributing substantially to an institutional property investment strategy. Originality/value – Previous retail research has been at an “overall” Australian retail property level. This paper rigorously assesses retail property at a retail sub‐sector level regarding retail property type, size and location. This level of analysis enables more informed and practical investment decision‐making regarding the role of retail property in a mixed‐asset portfolio for both direct and indirect retail property as part of an institutional property investment strategy. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Property Investment & Finance Emerald Publishing

The significance and performance of retail property in Australia

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References (17)

Publisher
Emerald Publishing
Copyright
Copyright © 2007 Emerald Group Publishing Limited. All rights reserved.
ISSN
1463-578X
DOI
10.1108/14635780710733834
Publisher site
See Article on Publisher Site

Abstract

Purpose – Retail property is an important property investment sector. The purpose of this paper is to assess the importance of retail property type, size and region in Australian retail property and the strategic role of direct retail property and retail listed property trusts (LPTs) in a mixed‐asset portfolio. Design/methodology/approach – This paper analyses the performance of retail property in Australia over 1995‐2005 for both direct and indirect retail property. Risk‐adjusted performance analysis is used to assess the added value of retail property in a mixed‐asset portfolio, with the portfolio diversification benefits of retail property also assessed. Findings – The paper finds that retail property and retail LPTs have delivered substantial risk‐adjusted returns and portfolio diversification benefits over 1995‐2005. The retail property sub‐sectors of retail property type, size and region have different performance characteristics; particularly highlighting the substantial role of geographic diversification as the most effective portfolio diversification strategy for retail property investors. Direct retail property and retail LPTs are also identified as having different performance characteristics and each contributing substantially to an institutional property investment strategy. Originality/value – Previous retail research has been at an “overall” Australian retail property level. This paper rigorously assesses retail property at a retail sub‐sector level regarding retail property type, size and location. This level of analysis enables more informed and practical investment decision‐making regarding the role of retail property in a mixed‐asset portfolio for both direct and indirect retail property as part of an institutional property investment strategy.

Journal

Journal of Property Investment & FinanceEmerald Publishing

Published: Mar 13, 2007

Keywords: Retailing; Property management; Performance appraisal; Portfolio investment; Diversification; Australia

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