Place is a concentration

Geographic diversification sounds like a travel plan. The risk version is plainer. A property sits in one place. That place has a flood map, a court, a tax authority, a power grid, and a finite set of people who might buy it from you. Adding a second property diversifies those facts only to the extent the second place does not share them.

Shared factors are easy to miss because the postcodes differ. Two coastal markets can share a tourism cycle. Two cities can share a currency peg and a dollar-funding squeeze. Two districts in one metropolitan area can share a single planning authority and a single employer. In the Philippines, an archipelago still shares buyers, remittances and national tax rules across islands. Separate resale pools can move together when those are the same.

A test that fits on a page

For each holding, name the shock that would hurt it most: a local occupier leaving, a national rule on foreign ownership, a currency move, a physical event, a loss of flights. Then count how many holdings share that shock. The count is the concentration. Malaysia and the UAE can diversify a climate risk and still share a sensitivity to cross-border buyers. Sri Lanka can diversify a Gulf business cycle and still concentrate political and tourism risk of its own. The point of the exercise is the overlap.

This is related to global diversification and narrower than it. Global spread includes currencies and types of claim. Geographic spread is specifically about place. A portfolio of financial claims on one city is geographically concentrated even if the claims have different tickers. GRIP does not propose a set of countries. The market directory is a way to see the differences.