Resources

IPF Commissions Investigation into Managing Currency Risk

10

Jul

2017

Press Release

Exchange rate fluctuations substantially alter the expected risk and return characteristics of international real estate investment.  The IPF Research Programme (2015-2018) has commissioned the University of Cambridge, led by Nick Mansley, to examine contemporary industry practice in managing currency risk for foreign real estate investment.

By reviewing different currency risk management approaches and analysing their advantages and disadvantages for different types of investor, different objectives and different markets, the study aims to provide the industry with a better understanding of these issues and how different approaches could minimise overall risk, as well as where responsibilities should lie in evaluating and executing these strategies.

The investigation will extend beyond the UK, to consider current practice in a number of locations, including China/Hong Kong, Australia, US, Germany and the Netherlands.

Chris Urwin, Head of Global Research at Aviva Investors, is chairing the Project Steering Group (PSG) that will oversee the research and commented: “Global real estate investors are significantly exposed to currency risk. But real estate investors manage currency risk in a variety of ways. This project should help develop a common understanding of good practice.”

Remaining members of the PSG comprise Asli Ball of GIC, David Dix, CBRE, and Jason Oram, Europa Capital.

The report An Investigation of Managing Currency Risk in Real Estate Investment is due to be published in six to nine months’ time.