A Decision Model for Real Estate Portfolio Valuation and Optimisation
Under consideration of real estate physical characteristics
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Beschreibung
This study is an applied research project on the topic of real estate portfolio (REP) management. It uses a cross-sectional design with the aim of developing a REP empirical decision model (REP-EDM) for a pension fund (PF) to utilise as part of its REP evaluation processes. The REP-EDM is based on the benchmarking of REP physical characteristics to a REP benchmark. Correlational research methodology with a multivariate regression is used to develop the REP-EDM model. The research question has been formulated as follows: How can a customer’s REP be optimised in order to reduce its idiosyncratic risks, basing the analysis on the REP’s physical characteristics and comparing it to a benchmark of the RE market physical characteristics? The issue of estimating RE liquidity risk is crucial in developing a successful REP strategy and the REP-EDM including the REP benchmark contributes to extending the existing body of knowledge regarding REP management, transparency and understanding of the RE market. The REP-EDM can be used as an additional decision support system for PF managers in order to answer the research question of this study in an objective way and independently from RE specialists. The REP-EDM model does not substitute other REP optimisation models but represents instead an additional model that supports managers in taking strategic decisions in a RE market characterised by low transparency and inefficiency.
Autor*in
Marvin C. Simoni