Institutional Real Estate Investment in Ireland and Great Britain: Returns, Risks and Opportunities

Abstract

Executive Summary. This study examines the returns and risks of private real estate investment in the major regional centers of Ireland and Great Britain for the 1981 through 2000 period. Returns for office and retail properties are analyzed at the disaggregate level (income returns and appreciation returns separately), as well as the aggregate level (total returns). Real estate returns are also compared with common stocks, gilts, T-bills and inflation. The results show that real estate in several U.K. regions, but especially in Ireland, offer very competitive returns with compelling risk / return ratios. The analysis indicates that real estate investments in several regions could supply significant diversification in a mixed-asset portfolio context as well as real estate only portfolios.