RT Journal Article
SR Electronic
T1 Real Estate in the Institutional Portfolio
JF The Journal of Alternative Investments
FD Institutional Investor Journals
SP 53
OP 59
DO 10.3905/jai.2003.319099
VO 6
IS 3
A1 Martin Hoesli
A1 Jon Lekander
A1 Witold Witkiewicz
YR 2003
UL https://pm-research.com/content/6/3/53.abstract
AB The main objective of this study is to provide international evidence on the discrepancy between suggested and actual allocations to real estate in institutional portfolios, and also to discuss possible reasons for the discrepancy. We use data for the U.S., U.K., Sweden, and Switzerland to investigate the benefits of including real estate assets? both domestic and international? in institutional portfolios. The optimal allocation to real estate is found to be 15% to 20%, and is remarkably stable across countries. The suggested allocations to real estate in institutional portfolios are then compared with the actual institutional holdings in these four countries. The latter are found to be much less than the former, and some possible explanations for the discrepancy are given. The study also reports a substantial home bias in institutional real estate portfolios.