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. 3 1.

Purpose -The main aim of this paper is to investigate the specific factors that influence fund managers' decisions to dispose of property. Design/methodology/approach -This study explores the reasons behind the decision-making processes associated with the disposal of real estate within a portfolio, and the information sources utilised by fund managers. A behavioural finance approach is adopted with the field research carried out as a survey-based analysis of the disposal decisions made by fund managers in the UK property fund market. Findings -The main reason for disposal of an investment is due, in part, to re-structuring the portfolio. This is also linked to under-performance of the asset involved, and current market expectations. The implications for the study are that it identifies that there are links between rational and irrational behaviour in the selection of assets, not only for disposal, but also in terms of investment as a whole. This can be based on the inefficiency of the property market, and the lack of accurately available information.Originality/value -The study is unique as it provides a comprehensive commentary on the disposal behaviour of fund managers at the individual property and portfolio-wide levels.

DedicationThis paper is dedicated to Nanda Nanthakumaran who died before it was published. He was, not only a dedicated teacher and researcher of international renown, but also a dear friend, sadly missed by everyone who knew him. We hope that the alterations we have made subsequent to his death are in keeping with the high standards he always set. A comparison of UK property and equity duration AbstractThis paper considers the duration of property and equity. A general formula for duration of asset classes is derived. It is shown that calculations which assume, usually implicitly, that the flow-through of inflation to cash flow is zero, produce misleadingly high durations for property and equities. These are typically in the range 15 to 25 years. Simulations using the formulae show that property has some bond-like characteristics. The results indicate that, for realistic flow-through rates, equities have a higher duration than property. The flow-through rate is the most important variable in the estimation of equities. Using historical data, equity duration is estimated at 8.65 years and property's at 3.15 years. These are substantially lower than those commonly cited. If these values can be substantiated, and if higher values are used in practice, portfolio immunisation strategies may need to be reconsidered.

The paper assesses the differential impact of property market constraints on the long-run rental trends in each of the commercial and industrial property market sectors. The perceived view that supply constraints are very inelastic in the retail sector, less so for offices and elastic for industrial properties is reconsidered. A series of hypotheses are derived and tested by an analysis of variance technique which decomposes rental change into local and national components. The paper concludes that changes in the pattern of spatial activity and specific property market processes have resculptured the nature of supply constraints. The result is that the spectrum of supply elasticities has narrowed.

The focus of this paper is the analysis and prediction of local office rents and in particular the development of econometric models for two UK cities, Edinburgh and Glasgow. This paper reviews the current state of modelling and forecasting for office markets and notes the sparsity of urban office rent models. The urban models that exist suffer from data problems and either make the fatal flaw of ignoring supply constraints or consider supply in terms of net change in floorspace. The objective of this paper is to address some of the deficiencies in this empirical work on office market dynamics; it is the first attempt to use local take-up as a variable to model urban rents. Two approaches to modelling urban office rents are undertaken. The first model adopts a single reduced-form price equation using direct demand and supply measures, and suggests that variation in market dynamics exists between the two centres. However, these equations for the two cities have statistical weaknesses. The second model is a three-equation 'structural' model. The results of this analysis also suggest that Edinburgh responds more quickly to fundamental changes in supply-demand imbalances than Glasgow in the determination of office rents. The variation between Edinburgh and Glasgow, two cities within one administrative region of the UK, exemplifies the arguments in favour of urban analysis and the deficiencies in the regional approach to forecasting. The results of the empirical analysis also emphasise the importance of including local supply variables. Urban analysis still suffers from a paucity of published local economic data and recourse to regional data remains theoretically unsatisfactory. However, the use of a demand flow variable as demonstrated here is not only significant but arguably encompasses local economic drivers, and thereby negates to some extent the need for local economic indicators.