For unlimited access to Study Guides, a Grade+ subscription is required.
MMP321 – Topic 10 Seminar Solutions
Topic 10: Global Property Investment
Describe three ways an investor can invest indirectly in international property
Three ways to invest ‘indirectly’ in international property markets:
1. Purchase units in a local PF that owns international properties.
2. Purchase units in a PF operating in another country (traded in another
3. Purchase units in a “globalREIT” which holds interests in worldwide
portfolio. Unit prices either denominated in either local or overseas
Identify and explain the two key drivers for investing in international property
Two key drivers for investing internationally:
Diversification: investing in property markets globally can provide risk reduction
for investors. Research has shown that investors can achieve improved risk/return
outcomes by including international properties in a mixed asset portfolio.
Enhanced returns: International investment can provide higher potential returns
than are available domestically. International property investments are available
across the risk-return spectrum. Enhanced returns are likely to be available in
higher risk markets and funds.
Discuss three conclusions from empirical research on diversification across
international property markets.
Refer to Rowland (2010) pp 314-315.
Commercial property investments can be segmented into four investment
strategies. What are these four strategies and where does each sit on the risk-
The four strategies are:
Core: substantially rented; orderly lease expiration schedule; high quality; invest
primarily in the major property types (Office, industrial, retail).