International property investments - articles on market selection and effects on local markets

    Research output: ThesisDoctoral ThesisCollection of Articles


    European property investment markets have internationalised at a rapid phase during the past ten years, the globalisation having today also reached the smaller and less mature property markets. For academic research, international real estate investments are not a new phenomenon, but the research in the field has been strongly focused on identifying diversification benefits obtainable through international exposure, whereas research on the characteristics of real estate investments and their effects in the decision making for international property investments has remained more limited. This dissertation has two research aims. The first aim of this research is to increase the knowledge on market selection for international property investments, by studying the investor motivation, market selection process and criteria, as well as organisation modes for international property investments. The findings of the study indicate that even though diversification is the primary motivation for international real estate investments, the investors approach the subject of diversification conceptually as not putting all your eggs in one basket, rather than formally through mean-variance analysis. This is also reflected to the market selection criteria used for international property investments, as, instead of return correlations, market selection is based on political and country risk, general economy and expected return on property investments in the local market, as well as factors contributing to market maturity. In addition, the results indicate that investors use the organisation mode as a risk management tool for the mitigation of the barriers connected to international real estate investments, and choose the organisation mode according to their perceptions of the information barriers and the local nature of property markets. The second aim is to identify how international property investments affect the local markets by studying the changes in the Finnish commercial real estate markets. The case study on the effects of international property investments on the Finnish commercial property markets shows that internationalisation has had a profound effect on the maturity of the Finnish commercial property market. The analysis shows that the importance of market maturity in market selection and the effects of internationalisation on market maturity have created a virtuous circle, supporting the further development of the market. In addition, the findings indicate that market can also stimulate this circle by conscious activities, such as in the case of the Finnish market by decreasing the informational barriers and adapting international market practices.
    Translated title of the contributionInternational property investments - articles on market selection and effects on local markets
    Original languageEnglish
    QualificationDoctor's degree
    Awarding Institution
    • Aalto University
    • Viitanen, Kauko, Supervising Professor
    • Lindholm, Anna-Liisa, Supervising Professor, External person
    Print ISBNs978-952-60-3187-3
    Electronic ISBNs978-952-60-3188-0
    Publication statusPublished - 2010
    MoE publication typeG5 Doctoral dissertation (article)


    • real estate economics
    • real estate investment
    • real estate market
    • market selection

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