Fall/Winter 2002, Vol 27, Nos 3&4

Abstract: This paper looks at the growth in size of public capital markets around the world and analyzes the returns that have been achieved. Monthly data from Global Property Research (GPR) for periods 1984 through 2002 midyear is used for the study. The paper describes the number of firms and market capitalization found in 16 countries, then examines the return correlations of the major real estate indices around the world along with their growth and performance. We con-clude that while the reasonable returns and low correlations of most public real estate markets around the world should attract institutional investors, but the relatively small size of most markets has made them less attractive. The U.S. market cap is $170 billion; but all other markets are much smaller with France, Hong Kong, and Japan averaging around $40 billion being the next closest tier. Thus the public real estate markets around the world still have a long way to go and grow to attract significant institutional capital.