Addae-Dapaah, K;
Young, GL;
(1998)
Currency risk and office investment in Asia Pacific.
Real Estate Finance
, 15
(3)
pp. 67-85.
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Abstract
The exchange rate risk of a single foreign country office investment can be substantial, as currency conversions can reduce foreign currency-denominated return by 10,200% and amplify risk by about 580%. However, the impact of currency volatility on return and risk is statistically insignificant. The potential gain from international office property investment diversification is substantial. The hypothesis that currency risk has a significant impact on the return from a fully diversified international office investment is rejected. The relatively low positive correlations, and even negative correlations between exchange rate returns and unadjusted office returns, vis-a-vis the relatively low positive negative intercountry correlations of exchange rate returns and office returns, enable movements between the exchange rate returns and a fully diversified office portfolio return over time to provide a natural hedge against exchange rate volatility.
| Type: | Article |
|---|---|
| Title: | Currency risk and office investment in Asia Pacific |
| Publisher version: | https://lrus.wolterskluwer.com/store/products/real... |
| Language: | English |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > The Bartlett School of Planning |
| URI: | https://discovery.ucl.ac.uk/id/eprint/1530147 |
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