REAL ESTATE INVESTMENT DIVERSIFICATION PROSPECTS IN UYO, AKWA IBOM STATE, NIGERIA.
Abstract
Real estate investors strive to balance returns with risk through a diversified portfolio. This study investigates construction of such a portfolio by incorporating both residential and commercial properties with negatively correlated returns. Data sourced from 20 estate firms in Uyo, Akwa Ibom State, spanning from 2008 to 2023, is analysed using Pearson Product Moment Correlation to explore the relationships among different real estate investment returns. The findings highlight diversification opportunities through combinations of 2-bedroom flats with offices, which demonstrates a negative correlation coefficient of -0.149. Similarly, 5-bedroom maisonettes with offices showed a correlation coefficient of 0.29, while the correlation between 5-bedroom maisonettes and shops stood at 0.543. These correlations underscore the feasibility of constructing a well-diversified portfolio. This study concludes that investing across different real estate classes within a locality can enhance diversification and mitigate risk. It recommends that investors consider diversifying across various property classes in Uyo to balance their portfolio
Keywords:
Commercial, diversification, portfolio, residential, returnsDownloads
Published
DOI:
https://doi.org/10.5281/zenodo.14891253Issue
Section
How to Cite
License
Copyright (c) 2025 Akpan, Kufre, Etuk Uyobong , Umah Martina
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
References
Adair, A., McGreal, S. Webb, J. R. (2006). Diversification effects of direct versus indirect real estate investments in the U.K. Journal of Real Estate Portfolio Management, 12(2), 85–90.
Akpan, K. E. & Efekalam, I. C. (2021). Appraisal of residential real estate investment Diversification prospects in the South-South, Nigeria. European Journal of Business and Management,13(24).
Cheng, P. Roulac, S. (2007). Measuring the effectiveness of geographical diversification. Journal of Real Estate Portfolio Management, 13 (1).
Ebie, S. (2012). The imperative of social housing in the South-South Region of Nigeria. Journal of the Nigerian Institution of Estate Surveyors and Valuers, 37(1), 56-70.
Eichholtz, P. M. A, & Hoesli, M. (1995). Real estate portfolio diversification by property type and region. Journal of Property Finance, 6 (3), 39-59.
Eichholtz, P.M.A., Koedijk, K.G. & De Roon, F.A. (2002). Portfolio implications of homeownership. Working paper, Maastricht University, Maastricht and University of Amsterdam, Amsterdam.
Ezema, I., Opoko, A. Oluwatayo, A. (2017). Bridging the housing deficit in Nigeria: Energy and CO2 emission implications. Journal of Sustainable Human Settlement and Housing, 1(1), 27-40.
Guerts, T. G. Jaffe, A. J. (1996). Risk and real estate investment: An international perspective. Journal of Real Estate Research, 2(2), 117–130.
Hartzell, D. J., Hekman, J. S. & Miles, M. E. (1986). Diversification Categories in Investment Real Estate. AREUEA Journal, 14(2), 230–254.
Hartzell, D. J., Shulman, D. G. & Wurtzebach, C. H. (1987). Refine the analysis of regional diversification for income-producing real estate. Journal of Real Estate Research, 2(2), 85–95.
Hoesli, M. & Lizieri, C., (2007). Real estate in the investment portfolio. Report to the Investment Strategy Council of the Norwegian Ministry of Finance, http://centaur.reading.ac.uk/view/creators/90002838.html
Hoesli, M. Macgregor, B. D. (2000). Property Investment: Principles and Practice of Portfolio Management. England, Pearson Education Limited.
Miles, M. & McCue, T. (1984). Commercial real estate returns. AREUEA Journal, 12(3),55-77.
Miles, M. E. & McCue, T. E. (1982). Historic Returns and Institutional Real Estate Portfolio. AREUEA Journal, 10(2), 184–198.
Mueller, G. R. (1993). Refine economic diversification strategies for real estate portfolios. Journal of Real Estate Research, 8(1), 55–68.
Mueller, G. R. & Ziering, B. A. (1992). Real estate portfolio diversification using economic diversification. Journal of Real Estate Research, 7(4), 375–386.
Olaleye, A. & Aluko, B.T. (2007). Evaluating managers’ diversification of real estate portfolios: Evidence from Nigeria. International Journal of Strategic Property Management, 11(3), 179-189.
Olaleye, A. (2011). Property portfolio diversification strategies: A review of the options. Ife Journal of Environmental Design and Management, 5(1), 15–30.
Olaleye, A. Ajayi, C. A. (2004). Towards a macroapproach to the management of property Portfolio in Nigeria. Journal of Property Research and Construction,1(1), 70-82.
Omeje, K. C. (2006). High stakes and stakeholders: Oil conflict and security in Nigeria: Ashgate Publishing, Ltd.
Oyewole, M. O. (2006). A Comparative Study of the Performance of Direct and Indirect Property Investment in Lagos. An unpublished M.Sc. Dissertation of the Department of Estate Management, Obafemi Awolowo University, Ile-Ife.
Rees, P. Kestel, S. (2014). Analysis of portfolio diversification between REIT assets. Journal of Computational and Applied Mathematics 259, 425-433.
Smietana, K. (2014). The diversification principles of real estate portfolios. Journal of Real Estate Management and Valuation, 22(1), 54–60.
Umeh, O. L. (2015). Diversification potential of residential property investments by local areas in Ibadan. Journal of the Environment, 9(1), 68–77.
