The paper endeavours to clarify the role of property as a financial asset in the evolving investment strategies of European banks. After a brief exposition of the theory of transaction cost economics the paper discusses the recent changes in the structure of European banking organisations and the involvement of the various groups of banks in property. This is followed by a transaction cost analysis of property as a financial asset. It is shown that transaction costs are largely accounted for by the costs of obtaining and processing information. Using asset specificity as the main criterion, two types of property are distinguished: Category 1 properties (low specificity) prompt the separation of the physical asset from the investor by the insertion of specific governance structures (referred to as ëfiltersí) which offer the investor liquidity and flexibility. Category 2 properties (high specificity) prompt long-term ownership thus attracting ëdirect investorsí. The paper then argues that filtered transactions (e.g. via securitisation) will increasingly become the domain of investment banks who are able to abstract from the full specificity of property, whilst those firms dealing in lending, property advice and, of course, direct investment will have to face up to property in its full specificity. However, in order to reduce the associated transaction costs, many organisations, with the exception of those firms specialised in property (e.g. mortgage banks), property analysis is likely to be contracted out to specialising property teams, companies, and consultants. The conclusion addresses the implications of these findings on the institutional environment and highlights avenues of further study before commenting on the limitations of transaction cost economics.

Property advice to business occupiers needs to be linked to the core functions of the business and valuers need to appreciate the implications that property has for business processes. This paper publishes some of the findings of a research project that examined whether valuers and valuations have a role in the provision of more strategic property advice to business occupiers.

In the UK over the last twenty years there has been a proliferation in the statutory provision for wayleaves. The utilities requiring wayleaves such as the water, gas and electricity companies have now been joined by cable TV and a host of telecommunications providers. All have access to compulsory powers. However, there are variations between these powers and between the compensation arrangements. The paper has two main objectives. First, to examine whether compulsory purchase powers, (coupled with statutory compensation) are now applicable following the privatisation of the gas, electricity, water and telecommunication companies. Secondly, to examine the process and basis by which the utilities value and negotiate wayleave agreements. The paper considers the results of a six-month study of wayleaves funded by the RICS, which was completed in November 1999. The paper recommends that statutory powers should continue to be available where utilities are under a statutory duty to develop and maintain a service. However, the nature of the powers requires to be redefined and standardised. In addition, the paper recommends that the claimant should not merely be entitled to the financial equivalent of their loss, but that a consideration should be paid which reflects the gain to the promoter.