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An Evaluation of Property Portfolio Diversification Strategies in Nigeria.

Olaleye, A. and Aluko, B. T. and Oloyede, S. A. (2006) An Evaluation of Property Portfolio Diversification Strategies in Nigeria. In: “Construction in Developing Economies: New Issues and Challenges”, 18-20 January 2006,, Santiago, Chile..

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Abstract

This paper identifies diversification strategies adopted in the Nigerian property market and evaluates the effectiveness of the strategies with a view to determining the benefits of each strategy to investors and also moves the profession in Nigeria forward towards meeting the global trends. This is against the background of greater unpredictability and volatility in the Nigeria property market and the increasing need for investors to diversify risk of their portfolios. Questionnaires backed up with interviews, were administered on 28 institutional property investors in Lagos, Abuja and Port-Harcourt metropolitan areas. Pooled data on rental transactions and capital values for the period of 1998 – 2003 involving 76 properties were also collected from the investors. Data were analysed with the use of frequency distribution, relative importance index, Sharpe’s Index and mean/standard deviation ratio. The study’s results showed that “property type” and “geographic naïve diversification” were the preferred strategies in the Nigerian property market and that these strategies did not give the best protection to investors’ portfolios against the risk situation in the market. The results of the evaluation revealed that the best strategy would be to adopt efficient portfolio strategy and invest better proportions of a real estate portfolio in residential properties located in Lagos metropolitan area.

Item Type: Conference or Workshop Item (Paper)
Uncontrolled Keywords: Diversification strategies, efficient portfolio, emerging real estate market, naïve portfolio.
Subjects: T Technology > TD Environmental technology. Sanitary engineering
Divisions: Faculty of Engineering, Science and Mathematics > School of Civil Engineering and the Environment
Depositing User: Mrs Patricia Nwokealisi
Date Deposited: 13 Mar 2017 12:39
Last Modified: 13 Mar 2017 12:39
URI: http://eprints.covenantuniversity.edu.ng/id/eprint/7912

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