Property market indices and lease structures – the impact on investment return delivery in the UK and Germany: Part I

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Journal of Property Investment & Finance

Online from: 1999

Subject Area: Built Environment

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Document Information:
Title:	Property market indices and lease structures – the impact on investment return delivery in the UK and Germany: Part I
Author(s):	Neil Turner, (Alecta Investment Management, London, UK,), Matthias Thomas, (DID, Wiesbaden, Germany)
Citation:	Neil Turner, Matthias Thomas, (2001) "Property market indices and lease structures – the impact on investment return delivery in the UK and Germany: Part I", Journal of Property Investment & Finance, Vol. 19 Iss: 2, pp.175 - 194
Keywords:	Germany, Investment property, Leases, Property, United Kingdom
Article type:	Research paper
DOI:	10.1108/14635780110383712 (Permanent URL)
Publisher:	MCB UP Ltd
Abstract:	The lack of portfolio-based property indices in European property markets has led researchers to consider the use of notional property indices to determine the risk and return rewards of investing in these markets. Owing to the computation assumptions underlying notional indices, in particular their inability to capture the prevalent lease structure in a market, they are unsuitable for this purpose, and investors devising European investment strategies around them need to be wary. This paper demonstrates the differences in property investment return delivery between notional and portfolio-based indices, concentrating particularly on lease structures, and utilises data from the UK for this purpose. German lease structures are then considered in this context.