Jackson, C. and Orr, A. (2011) Real estate stock selection and attribute preferences. Journal of Property Research, 28(4), pp. 317-339. (doi: 10.1080/09599916.2011.586469)
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Abstract
The majority of studies that explore property portfolio construction and management strategies utilise highly aggregated ex-post data, but stock selection is known to be a significant determinant of portfolio performance. Thus, here we look at stock selection, focusing on the choices faced by investors, necessitating the collection and analysis of primary data, carried out utilising conjoint analysis. This represents a new step in property research, with the data collection undertaken using a simulation exercise. This enables fund managers to make hypothetical purchase decisions, viewing properties comprising a realistic bundle of attributes and making complex contemporaneous trade-offs between attributes, subject to their stated market and economic forecasts and sector specialism. In total 51 fund managers were surveyed, producing 918 purchase decisions for analysis, with additional data collected regarding fund and personal characteristics. The results reveal that ‘fixed’ property characteristics (location and obsolescence) are dominant in the decision-making process, over and above ‘manageable’ tenant and lease characteristics which can be explicitly included within models of probabilities of income variation. This reveals investors are making ex-ante risk judgements and are considering post acquisition risk management strategies. The study also reveals that behavioural factors affect acquisition decisions.
| Item Type: | Articles |
|---|---|
| Status: | Published |
| Refereed: | Yes |
| Glasgow Author(s) Enlighten ID: | Orr, Dr Allison |
| Authors: | Jackson, C., and Orr, A. |
| Subjects: | H Social Sciences > HG Finance |
| College/School: | College of Social Sciences > School of Social and Political Sciences > Urban Studies |
| Journal Name: | Journal of Property Research |
| Publisher: | Taylor and Francis |
| ISSN: | 0959-9916 |
| ISSN (Online): | 1466-4453 |
| Published Online: | 30 August 2011 |
| Copyright Holders: | Copyright © 2011 Taylor and Francis |
| First Published: | First published in Journal of Property Research 28(4):317-339 |
| Publisher Policy: | Reproduced in accordance with the copyright policy of the publisher |
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