Real Estate investors rely on the diversification of their portfolios as a tool to reduce the volatility of their portfolioís performance. Diversification is the principal tool of Harry Markowitzís Modern Portfolio Theory (MPT). Diversification achieves reductions in the total portfolio risk by means of small reductions in the returns when combining risky assets together. However, property assets are ërara avisí, their behaviour is idiosyncratic unlike other financial assets. Market Segmentation is a technique to achieve diversification by means of gathering together those assets sharing a similar performance. This gathering of similar assets maximises the variance present across the different segments of the market while minimising the variance of the individual assetís returns within the segments.