A comparative analysis of direct and indirect real estate investment performance in Lagos, Nigeria
The paper examined comparatively the performance of direct and indirect real estate investments within the period of 2000 and 2012, in Lagos Nigeria. The total return for each of the real estate investment vehicles were analyzed with the use of mean returns, standard deviation, coefficient of variation and sharp index. The results showed that indirect real estate investment performed better than direct real estate investment on a nominal basis with a mean annual return of 34.21% as against 30.29% and 25.69% for direct commercial and residential real estate investments respectively. However, direct real estate investments performed better in terms of risk-adjusted return with Coefficient of Variation of
0.16 and 0.24 for residential property and commercial property as against 3.02 for indirect real estate investment. The study concluded that while investors in real estate may benefit from both direct and indirect real estate investment media, they may stand to benefit more if they consider direct real estate investments.
Keywords: Investment vehicles, Nigeria, Performance analysis, Property company shares, Real estate investment.