The rise of global conflicts and geopolitical shifts is breaking global supply chains and may result in prolonged economic uncertainty and rapid shifts in monetary policies. INREV’s latest research, ‘Duration in real estate: understanding interest rate sensitivity across property strategies’, introduces how the concept of duration can be applied to real estate to help consistently assess and manage interest rate risk.
Key highlights:
- The paper explains the concept of duration and its importance in multi-asset portfolio construction, risk and asset-liability management. Duration is used in fixed income to measure a bond’s price sensitivity to interest rate changes. Higher duration indicates greater price volatility when rates move, especially in an environment where real rates and credit conditions can change rapidly.
- When applied to real estate, duration can help to understand why different sectors and strategies respond differently to changes in interest rates and capital market conditions. Inflation pass-through is the single most important driver, but yield level amplifies everything.
- Effective duration varies significantly within real estate. The good news is that it can be managed through market and sector selection, lease terms and financing structure.
INREV would like to thank the Research Committee for its work in producing this paper.
Download the full paper below.
Duration in real estate: understanding interest rate sensitivity across property strategies
Published on 12 May 2026