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The Significance of Emerging Property Sectors in Property Portfolios

Author/s: Graeme Newell, Hsu Wen Peng

Date Published: 1/01/2006

Published in: Volume 12 - 2006 Issue 2 (pages 177 - 197)

Abstract

Property funds in Australia have over $160 billion in assets, with office, retail and industrial property being the major property sectors contributing to these property portfolios. However, recent years have seen increased attention given to the property investment opportunities available from the emerging property sectors such as self-storage, healthcare, retirement facilities and leisure/entertainment. This paper will assess the significance of these emerging property sectors in property portfolios in Australia; particularly highlighting issues such as the current portfolio levels and the leading property funds in these emerging property sectors. An emerging sector LPT performance index is established and an emerging property sector risk-adjusted performance analysis carried out over 2002-2005, as well as the portfolio diversification benefits of the emerging property sector assessed. Compared to the other LPT sectors, the emerging sector LPTs were seen to provide superior risk-adjusted performance, as well as providing portfolio diversification benefits.

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Keywords

Emerging Property Sectors - Emerging Sector Performance Index - Healthcare - Leisure/Entertainment - Performance Analysis - Property Portfolios - Property Vehicle - Retirement Facilities - Self-Storage

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