Upcoming RES Cash Flow Roundtable – Ouputs

The strongly expressed view at the third RES Round-table on cash flow modelling was that individual asset risk should be measured outside of the portfolio context. The alternative view would be that these risks can be fully diversified in a portfolio and should therefore not be reflected in asset required returns. A ‘middle’ view would be that real estate portfolios cannot fully diversify away all specific risks and therefore a proportion of asset specific risks should be reflected in required asset returns.