Wednesday 19 January 2011

How to invest in property

How to invest in property

Dan Winterbottom and James Wilkinson of Thames River Capital analyse the relationship between real estate securities, equity markets and real bricks and mortar assets.

Investors have long been aware of the diversification benefits of an allocation to commercial property. However, the orthodox view tends to be that the only way to go about it is to invest directly in physical property, or to buy into a fund that does so. Listed property securities, so the story goes, show more correlation with the wider stockmarket than with the direct property market, and thus some of the benefits of diversification are lost by investing in property shares.Such orthodoxy should not go unchallenged.

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