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Title: Institutional investment in residential property : the Swiss, Dutch and Swedish cases
Author: Carvalho, Joaquim Montezuma De.
Awarding Body: University of Glasgow
Current Institution: University of Glasgow
Date of Award: 2005
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This thesis attempts for the first time to shed light on the high involvement of institutional investors in the residential property market in Switzerland, the Netherlands and Sweden. In order to understand the reasons underlying this unusual institutional behaviour, a triangulated approach was followed, where a quantitative analysis was combined with qualitative analysis. The triangulated approach emphasizes the benefits of distinct but complementary research methods rather than advocating a single style of research. The approach combines the meanvariance analysis extended through bootstrap simulation with a postal survey and a crosscountry comparative study of institutional investment and housing systems. The central hypothesis of the thesis is that the different institutional allocations to residential property across countries cannot be explained entirely by a model of portfolio choice, without taking into account the different national characteristics of institutional investment and housing systems. Chapter I provides an introduction to the thesis. Chapter 2 discusses modern portfolio theory when applied to property. Chapter 3 examines the techniques of and problems with the estimation of housing returns. Chapter 4 surveys the literature on the role of residential property in a mixed asset portfolio. Chapter 5 outlines the methodology. Chapter 6 and Chapter 7 detail the comparative analysis of institutional investor and housing systems respectively. Chapter 8 surveys the institutional investors' attitudes and perceptions of residential property as an asset group. Chapter 9 evaluates residential property as an institutional asset group according to three financial criteria (size of rented market potentially available for institutional investment, meanvariance performance and hedge against inflation ability). The dissertation conclusions are as follows: (1) The Swiss and Dutch institutional residential ownership puzzle seems to be explained by a composite of factors relating to the institutional investment and housing systems. (2) The pension system design and the legal, regulatory and fiscal environment within which the institutional investors operate seem to provide new insights into the institutional investors' allocation to property and specifically to residential property. (3) Government intervention in the housing market, namely in terms of rent regulation and tenure support, influences the investment characteristics of residential property, which, in turn, helps to explain why Swiss and Dutch institutional investors allocate an unusual high fraction of their property portfolio to the residential private rented sector. (4) The MPT analysis concludes that residential property has a role in mixed asset institutional portfolios (5) Consistent with the empirical study the survey suggests that residential housing is seen primarily as an earning asset group able to provide diversification benefits even when institutional portfolios already include nonresidential property.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available