The real estate risk premium is a differential that we apply to an investment, considering the risk that the same one carries, to be able to evaluate the interest with relation to other investments. These risk premiums, therefore, change depending on the type of real-estate assets and on his use.
This one answers to several components as the location, the possibility of non-payment of return or incomes, of which it should remain the building an unoccupied and of his depreciation (it is necessary to incur expenses of repair, adequacy and reform of a habitual way, etc.). The degree of liquidity of the market into which the building is fitted adds also a part of risk to the premium, since his increase or depreciation will depend on the volume of operations of transactions and investors.
The risk premium of the shopping malls is probably one of the highest, since his determining ones are major and more numerous: it is a question of assets with a capital very high value, that they need a very specialized management, which growth or decrease is very tied to the economy (private consumption and retails); also it is necessary to bear in mind the determining politicians (concession of licenses), the constructive quality and the combination of tenants and potential population.
The risk premium of the hotel sector depends on factors as the specialty, the operator, his location and maintenance. In general it is of high risk (volatility).
The risk premium in offices belongs to a very cyclical market, with a great influence of the economic growth and of the type of managerial fabric. It is the assets of major presence in the real-estate portfolios. Normally minor direct rate of return offers that other sectors.
The risk premium of industrial soil has direct rate of return of the highest, but his revaluation is in the habit of being of the lowest. It is very influenced by the new developments and new infrastructures in other zones.
The risk premium in garages and parking is very determined by the political regulations (rates), by the typologies of property or concession, by the operating costs and the maintenance. The maturity cycle of the investment is long.
Finally, the risk premium of residential investment in housing rent. In Spain it has been considered historically more an activity of promotion and sale that of investment purely. This meaning has changed immediately after the real-estate crisis and the appearance of the real-estate investment funds. It is a question of an investment of low risk, with direct very low profitability and a very cyclical component of revaluation.
