Portfolio size and the reduction of dispersion: the case of the United Kingdom commercial real estate market

This paper investigates the potential benefits and limitations of equal and value-weighted diversification using as the example the UK institutional property market. To achieve this it uses the largest sample (392) of actual property returns that is currently available, over the period 1981 to 1996. To evaluate these issues two approaches are adopted; first, an analysis of the correlations within the sectors and regions and secondly simulations of property portfolios of increasing size constructed both naively and with value-weighting. Using these methods it is shown that the extent of possible risk reduction is limited because of the high positive correlations between assets in any portfolio, even when naively diversified. It is also shown that portfolios exhibit high levels of variability around the average risk, suggesting that previous work seriously understates the number of properties needed to achieve a satisfactory level of diversification. The results have implications for the development and maintenance of a property portfolio because they indicate that the achievable level of risk reduction depends upon the availability of assets, the weighting system used and the investor’s risk tolerance.

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.

Reduction of greenhouse gas emissions from UK hotels in 2030

The feasibility of halving greenhousegasemissions from hotels by 2030 has been studied as part of the Carbon Vision Buildings Programme. The aim of that programme was to study ways of reducing emissions from the existing stock because it will be responsible for the majority of building emissions over the next few decades. The work was carried out using detailed computer simulation using the ESP-r tool. Two hotels were studied, one older and converted and the other newer and purpose-built, with the aim of representing the most common UKhotel types. The effects were studied of interventions expected to be available in 2030 including fabric improvements, HVAC changes, lighting and appliance improvements and renewable energy generation. The main finding was that it is technically feasible to reduce emissions by 50% without compromising guest comfort. Ranking of the interventions was problematical for several reasons including interdependence and the impacts on boiler sizing of large reductions in the heating load

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