%0 Journal Article %A Ivo de Wit %A Christopher Mayer %T Global Risk Premiums on Direct Office Real Estate Returns %D 2021 %R 10.3905/jpm.2021.1.266 %J The Journal of Portfolio Management %P 91-106 %V 47 %N 10 %X This article empirically examines the magnitude of risk premiums for direct real estate investments on a global basis. As this article analyzes ex-ante risk premiums over more than 25 years consistently across the world, it enhances current knowledge about the regional differences between risk premiums and helps long-term investors with their global portfolio allocation over time. On a global level, the authors find a risk premium of 4.1% for Gordon’s growth and 3.7% for two-stage growth model. The periodic growth model shows a slightly lower risk premium of 3.1%. As this study is analyzing a long time period, the article extends the literature by finding evidence for convergence between risk premiums across continents both over time and in cross-sectional variance. However, this is happening slowly, thereby making differences in risk premiums very important in making a global direct real estate investment allocation.Key Findings▪ The authors analyze ex-ante risk premiums over more than 25 years across the world and use three alternative valuation models to estimate ex-ante risk premiums.▪ They find that the regional risk premiums are consistent with previous research on the determinants of risk premiums, but these studies were done over shorter time periods. ▪ The authors find evidence for convergence between risk premiums across continents both over time and in cross-sectional variance. %U https://jpm.pm-research.com/content/iijpormgmt/47/10/91.full.pdf