Combination Of Property Type And Economic Specialization Diversification Strategies In Real Estate Investment Porftfolios In Nigeria

Abstract

The study was carried out to analyse the combination of property type and economic specialization portfolio diversification strategies of real estate investment portfolios in South East, Nigeria. This was targeted at determining the benefits of the strategies. Survey research method was applied in the study and structured questionnaire was used in collecting rental and capital market values of residential and commercial properties in the central business districts and high density areas of the selected cities. The total returns of the different classes of properties were determined from the field data and Karl Pearson correlation analysis and mean variance analysis were used in the data analysis. The results showed that combining property type and economic specialization of the cities portfolio diversification strategies in South East, Nigeria offers diversification benefits. The correlation coefficients analysis results indicated that about 50% of the correlation coefficients were weak, 25% were negatively correlated, while 25% were positively correlated but less than 1. The results of the mean variance analysis further demonstrate that the combination of the diversification strategies contributed significantly to the risks reduction of the portfolios.