Real estate portfolio strategy and product innovation in Europe

Abstract

Purpose This paper aims to review major changes on real estate markets in Europe and to analyse the impacts of such changes. Design/methodology/approach The paper provides an overview of the various equity real estate investment vehicles available to investors, with particular focus on the pros and cons of each type of vehicle. The paper also includes an analysis of the impacts of product innovation on real estate markets and on portfolio strategy. Findings The changes on real estate markets have led to considerable amounts of capital being allocated to the asset class. Portfolio strategies should be substantially more flexible. Research limitations/implications As many of the new products have been created in bullish real estate markets, it is important to assess the impacts of a market downturn on portfolio performance. Practical implications A good understanding of available products with their pros and cons is necessary for a sound investment strategy. Originality/value The paper is one of the very few papers that discuss the major institutional changes that have occurred on European real estate markets.