Starting with a diversified international real estate portfolio by using the portfolio theory this research paper shoes a pragmatic approach to transform the findings into a real allocation process for finding a practical target portfolio for direct investments. However, the literature of the last 20 years shoes a high level of diversifications effects by using the portfolio theory also for real estate portfolios. But there is still a dilemma to transform these results into a daily allocation processes. The paper gives an outlook on the practicable application of the results using Markowitz theory in consideration of the uncertain and imperfect real estate markets. In practical considerations there are still problems regarding the properties of direct real estate investments and their markets, for example the characteristics of properties, real estate market situations and sizes. On the basis of empirical statistical tests ñ based on real estate total return indices ñ this papers aims to find a solution to overcome these difficulties. The new transformation process ñ as a result of this paper ñ is using clustering methods and different return calculations for having more possibilities for choosing the suitable components for an existing real estate portfolio. With a top down to bottom up procedure according to a countercurrent principle it is possible to find properties witch are suitable in practice.