Real estate portfolio size and risk reduction

The reduction of portfolio risk is important to all investors but is particularly important to real estate investors as most property portfolios are generally small. As a consequence, portfolios are vulnerable to a significant risk of under-performing the market, or a target rate of return and so investors may be exposing themselves to greater risk than necessary. Given the potentially higher risk of underperformance from owning only a few properties, we follow the approach of Vassal (2001) and examine the benefits of holding more properties in a real estate portfolio. Using Monte Carlo simulation and the returns from 1,728 properties in the IPD database, held over the 10-year period from 1995 to 2004, the results show that increases in portfolio size offers the possibility of a more stable and less volatile return pattern over time, i.e. down-side risk is diminished with increasing portfolio size. Nonetheless, increasing portfolio size has the disadvantage of restricting the probability of out-performing the benchmark index by a significant amount. In other words, although increasing portfolio size reduces the down-side risk in a portfolio, it also decreases its up-side potential. Be that as it may, the results provide further evidence that portfolios with large numbers of properties are always preferable to portfolios of a smaller size.

Risk reduction and real estate portfolio size

Despite a number of papers that discuss the advantages of increased size on risk levels in real estate portfolios there is remarkably little empirical evidence based on actual portfolios. The objective of this paper is to remedy this deficiency by examining the portfolio risk of a large sample of actual property data over the period 1981 to 1996. The results show that all that can be said is that portfolios of properties of a large size, on the average, tend to have lower risks than small sized portfolios. More importantly portfolios of a few properties can have very high or very low risk.

Risk reduction and diversification in UK commercial property portfolios

The issue of diversification in direct real estate investment portfolios has been widely studied in academic and practitioner literature. Most work, however, has been done using either partially aggregated data or data for small samples of individual properties. This paper reports results from tests of both risk reduction and diversification that use the records of 10,000+ UK properties tracked by Investment Property Databank. It provides, for the first time, robust estimates of the diversification gains attainable given the returns, risks and cross‐correlations across the individual properties available to fund managers. The results quantify the number of assets and amount of money needed to construct both ‘balanced’ and ‘specialist’ property portfolios by direct investment. Target numbers will vary according to the objectives of investors and the degree to which tracking error is tolerated. The top‐level results are consistent with previous work, showing that a large measure of risk reduction can be achieved with portfolios of 30–50 properties, but full diversification of specific risk can only be achieved in very large portfolios. However, the paper extends previous work by demonstrating on a single, large dataset the implications of different methods of calculating risk reduction, and also by showing more disaggregated results relevant to the construction of specialist, sector‐focussed funds.

Olive leaf phenolics and cardiovascular risk reduction: Physiological effects and mechanisms of action

Olive oil, an important component of the Mediterranean diet, is rich in polyphenols and is known to possess positive health effects relative to other dietary fats. In addition, the leaves of the olive plant (Olea europaea) contain similar phenolics (oleuropein, luteolin-7-glucoside, apigenin-7-glucoside, verbascoside and hydroxytyrosol) to those of olives and olive oil, although at higher concentrations. For example, the most abundant is the secoiridoid, oleuropein, representing 1–14% of olive leaf weight vs. 0.005–0.12% in olive oil. Although currently considered a waste product of the olive oil industry, recent research has suggested beneficial effects of phenolic-rich olive leaf extracts (OLE) in modifying cardiovascular risk biomarkers such as blood pressure, hyperglycaemia, oxidative stress and inflammation, as well as improving vascular function and lipid profiles. Despite this, data regarding the biological actions of OLE has mostly derived from animal, in vitro and ex vivo studies, with limited evidence deriving from human trials. Although the absorption and metabolism of olive oil phenolics has been investigated, less is known about the bioavailability of phenolics from OLE, limiting the interpretation of existing in vitro and ex vivo data. The current review will begin by describing the phenolic composition of olive leaves in comparison with that of the better studied olive oil. It will then review the effects of OLE on cardiovascular risk factors, covering both animal and human studies and will end by considering potential mechanisms of action

Disaster risk reduction in the education sector among selected Caribbean small island developing states

Caribbean Small Island Developing States (SIDS), by their very nature, are vulnerable to external shocks. Research shows that the Caribbean subregion experienced 165 natural disasters between 1990 and 2008 and the total impact of natural disasters on the subregion was estimated at US$136 billion. The impact on the social sectors was estimated at US$57 billion, or 42% of the total effect. As small open economies, the Caribbean SIDS are also vulnerable to the vagaries of the international economic system and have experienced declines in tourism, merchandise exports receipts, remittances and capital flows throughout the financial crisis. The negative impact of natural hazards exacerbates the capacity of Caribbean SIDS to overcome the development challenges, such as those posed by the current global economic and financial crisis. Disaster risk reduction (DRR), therefore, is of critical concern to subregional governments and their people. For the purpose of this study, six Caribbean SIDS were selected for detailed analyses on the macro socio-economic impact of extreme events to the education sector. They are the Cayman Islands, Grenada, Guyana, Haiti, Jamaica, and Montserrat. This paper proposes that better integration of DRR in the education sector cannot be easily achieved if policymakers do not recognize the social nature of risk perception and acceptance in Caribbean SIDS, which necessitates that risk reduction be treated as a negotiated process which engages all stakeholders.

Cardiometabolic risk reduction through lifestyle intervention programs in the Brazilian public health system

Public health strategies to reduce cardiovascular morbidity and mortality should focus on global cardiometabolic risk reduction. The efficacy of lifestyle changes to prevent type 2 diabetes have been demonstrated, but low-cost interventions to reduce cardiometabolic risk in Latin-America have been rarely reported. Our group developed 2 programs to promote health of high-risk individuals attending a primary care center in Brazil. This study compared the effects of two 9-month lifestyle interventions, one based on medical consultations (traditional) and another with 13 multi-professional group sessions in addition to the medical consultations (intensive) on cardiometabolic parameters. Adults were eligible if they had pre-diabetes (according to the American Diabetes Association) and/or metabolic syndrome (International Diabetes Federation criteria for Latin-America). Data were expressed as means and standard deviations or percentages and compared between groups or testing visits. A p-value < 0.05 was considered significant. Results: 180 individuals agreed to participate (35.0% men, mean age 54.7 ± 12.3 years, 86.1% overweight or obese). 83 were allocated to the traditional and 97 to the intensive program. Both interventions reduced body mass index, waist circumference and tumor necrosis factor-α. Only intensive program reduced 2-hour plasma glucose and blood pressure and increased adiponectin values, but HDL-cholesterol increased only in the traditional. Also, responses to programs were better in intensive compared to traditional program in terms of blood pressure and adiponectin improvements. No new case of diabetes in intensive but 3 cases and one myocardial infarction in traditional program were detected. Both programs induced metabolic improvement in the short-term, but if better results in the intensive are due to higher awareness about risk and self-motivation deserves further investigation. In conclusion, these low-cost interventions are able to minimize cardiometabolic risk factors involved in the progression to type 2 diabetes and/or cardiovascular disease.