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Several academic studies have demonstrated that adding real estate to a mixed asset portfolio can be expected to provide a higher level of return for the same amount of risk.(1) However, the relatively illiquid nature of the asset class poses a challenge for some investors. Listed real estate is a natural alternative as it offers investors a more liquid solution for gaining property market exposure.
Since the 1990s, the significant growth of the global REIT industry has created an investment universe of sufficient scale and liquidity.
There is also a growing trend for listed property companies to focus on a particular property sector, which allows investors to be more tactile in their allocations to real estate.
The price of...
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