Segmented “markets” in real estate research?

In the academic world, I think that you can crudely pigeon hole the academic researchers into three main categories. The first are focussed on the underlying real estate assets and tend to be from conventional real estate backgrounds; the second type focus on real estate markets and tend to be from urban, housing or mainstream economics backgrounds and the last focus on the real estate vehicles or ‘wrappers’ and tend to have backgrounds in finance and/or econometrics. Albeit there’s always risks in trying to categorise people into simplistic categories and, as ever, the real world is usually too messy for neat categories.

Few people have a good handle on all three areas in terms of research. Professionally, it’s fund managers who need to be able to cover the breadth of issues. Some researchers bridge two quite comfortably. However, the different disciplinary backgrounds of these groups has tended to channel them towards different areas of interest.   I’d call them – asset people, markets people and vehicles people. Whilst all three tend to be interested in various and sometimes quite different aspects of real estate pricing, performance, liquidity and risk, here are some key words which I think capture their main interests.

“Asset people” – Lease structures. Buildings. Tenants. Rents. Transactions. Yields. Appraisal. Property and Asset Management. Operational Costs. Capital Expenditure. Refurbishment. Development. Locations. Loans.

“Markets people” – Economic Drivers. Market Supply and Demand Conditions. Portfolio Construction. Asset Allocation. Investment Strategy. Forecasting. Private market attributes e.g. capital structure, inflation hedge.

“Vehicles people” – REITs and Property Companies. Unlisted Property Funds. Derivatives. Capital Markets. Commercial Mortgage Backed Securitisation. Asset-backed Securitisation. Covered Bonds. Governance and Disclosure. Portfolio Optimisation. Listed sector attributes e.g. capital structure, inflation hedge.

Research on real estate vehicles tends to be well-covered by the INREV (unlisted real estate funds) and EPRA (the listed real estate sector). Both organisations have active research programmes. My impression is that many of the private sector real estate research community tend to be “markets people”. Not surprisingly, that’s where they will gravitate towards in commissioning new research? The IPF have been great at covering a lot of areas. However, I suspect that their ‘comfort zone’ is real estate investment markets with the research committee composed mainly of “markets people” who are responsible for research and strategy in their day jobs and who don’t necessarily engage closely with the underlying assets.


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