 THE LIQUIDITY OF DIRECT REAL ESTATE IN INSTITUTIONAL INVESTORSí PORTFOLIOS: THE NETHERLANDSAart Hordijk and Bert J.J. Teuben ERES from European Real Estate Society (ERES) Abstract: The liquidity of direct real estate has been surrounded by mystery. Research in the USA and in the UK has contributed much to clarify the liquidity issue of direct real estate. In the Netherlands, not much research exists on this issue; however, a major ALM advisory firm in the Netherlands suggests a liquidity factor of 1,5 times the standard deviation of the ROZ/IPD real estate index, leading to a 50% higher risk compared to the current ROZ/IPD real estate index risk. We will investigate whether this is a reasonable assumption by approaching the issue from several perspectives. First of all, we reviewed the transaction process and the effects of heterogeneity and the size of the property. We will also review the market risk between the date of the decision to sell the property and the date on which it was actually sold. The last element we will review is the reallocation risk, in other words missed opportunities that have arisen because it could take longer to sell property than to sell stocks or bonds. Extensive anonymous information from the main institutional investors in the Netherlands is used, as well as interviews with the main Dutch brokers. The survey is placed in an international context by comparing the results as well as the methods to previous surveys in the UK. JEL-codes: R3 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2006_216 Access Statistics for this paper More papers in ERES from European Real Estate Society (ERES) Contact information at EDIRC. |
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