Motivation and Market Selection of International Investors in Finnish Property Market

Authors

• Heidi Falkenbach

Keywords:

Property investment, International investment, Motivation, market selection

Abstract

The property markets have internationalised rapidly in Europe. This paper investigates the motivation, market selection approach as well as market selection criteria of international property investors through an interview study of foreign investors in the Finnish commercial property market. The findings suggest that the main motivation for international property investments is diversification, but in a conceptual sense rather than in the meaning of Modern Portfolio Theory. In addition, the market selection is driven by factors related to the institutional environment, the general economy and the property market, whereas the role of correlations of asset returns in market selection is small. In addition, market familiarity and factors related to the investment organisation, such as resources, drive market selection.