|A Challenge to Reach the Sky: Collaborative Effort in the Development of the Petronas Twin Towers of Kuala Lumpur." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Land development process has been argued as a set of cyclical reactions to a number of complex changing societal demands and expectations. The outcome has been conventionally expressed in terms of physical characteristics, its location (which is considered to be unique), and its context whereby it takes place under constant public interest, debate and scrutiny. Underpinning this are the notion that land development takes place in order to meet the needs and demands of society not limited to only in terms of its basic requirements for shelter and the provision of buildings to live. Rather, it also includes achieving national and city policies. Most importantly is that this activity is a fundamental dimension to both urban capacity and urban quality. Drawing upon a case study of the development of twin tower project in the capital city of Kuala Lumpur, Malaysia, this study seeks to examine the public-private partnerships between local authority of City Hall of Kuala Lumpur and private developer undertaken in meeting the challenge to accelerate land development. The ultimate goal is to fulfil the national aspirations. The study establishes that the private and public sector both have their respective strengths and weaknesses. Thus, each sector is made responsible for the issues for which it has a comparative advantage. The findings demonstrated that the outcome of this land development witnessed an outstanding achievement. A new modern city in the city emerged and accomplished the local authorityís policy to achieve the economic development of urban area.|
|A Comparison of Performance for Real Estate and Infrastructure Investments." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Since 2000 there has been an increasing focuses by the global investment community towards alternative investment classes, in particular real estate and infrastructure investments. Most of this demand is coming from institutional investors who are attracted by the long-term nature of these investments. Proponents of these alternative investment classes argue that they deliver favourable investment performance (such as enhanced risk-adjusted returns, predictable and stable income yields and attractive positive total return) against traditional investments such as general equities and fixed interest. This paper examines the historical return performance for real estate and infrastructure investment markets in Australia using econometric time series techniques. Attention is given to both the listed and unlisted markets. The paper attempts to highlight the varying nature between these two asset classes and outline their key drivers of performance. Their impact in a balanced portfolio is also assessed in terms of diversification benefits.|
|A Conceptual Controlling Framework for Housing Portfolios." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper presents a framework model for structuring a controlling system for portfolio-, asset- and property management for profit-oriented housing companies. The starting point in the analysis is the changing market conditions for housing management in Europe and particularly in Germany. Despite these developments, scientific papers dealing with the topic of controlling for housing portfolios are hardly to find in management science literature. The current state is separately typical for the issue of the arrangement of management and controlling functions and the constructing process of controlling systems for housing companies. Therefore a general view of publications in real estate literature dealing with the topic of the paper is given. A comparison of the assumed needs in practice with the unsatisfying state of knowledge of the scientific research points out a high research potential. Further a general management model is adapted to the characteristics of the housing industry with emphasis on the financial dimension. Based on these findings the value creation chain and its interactions with management and controlling processes in the portfolio-, asset- and property management are described. In this context controlling is defined as a function of supporting management with information, while securing the internal and external adaptation-ability of the company. The influencing factors on the creating process of a controlling system for portfolio-, asset- and property management are highlighted systematically. Finally the paper outlines further research potential in the presented issues.|
|A Conceptual Model for Knowledge Management Strategy: An Application in Real Estate Business." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Real Estate Business nowadays has become a very and tight competitive. Thus, each of players in this business needs to shift to new paradigm of business. In engineering, knowledge management has become crucial part requires a profound insight into the task of engineers and their need of support. It is believe in real estate knowledge management is important to find ways to use, reuse and store knowledge as efficiently as possible. Real estate players need a large amount of reliable knowledge and information to ensure a successful of business. In addition, it involves the combination of various inputs in order to achieve an output or product. These developments offer opportunities for changes to organisational structures and the improvement of business process. The traditional approach of managing real estate business has proved to be too monolithic and lacking information for dealing with highly complex, multidimensional, and distributed systems. In the traditional paradigm little attempt is made in understanding how the information in real estate relates to other components or the effect that the information will have on the enterprise itself. This paper will try to explore a conceptual model to design knowledge management strategy to play a role in the way that one can capture, reason, represent, use for agreement between many stakeholders, competitors, customers and discover new information in industry to make betterment for industries.|
|A General Equilibrium Analysis of Land Use Restrictions and Residential Welfare (Quigley)." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||We consider the general equilibrium implications of land use restrictions which result in a reduction of otherwise profitable residential development. If the regulations affect a significant amount of land, they may have important effects on the rest of the regional economy -increasing rents and densities on lands not subject to the regulation, causing the conversion of lands from alternative uses, increasing the net developed area in the region, and decreasing consumer welfare. We develop a flexible general equilibrium simulation of the economic effects of land use restrictions, explicitly considering the distributional effects upon owners of different types of land and upon housing consumers. The results of our simulation show that the most significant economic effects of land use regulations occur outside of the designated area. The prices and rents of non-restricted lands increase significantly, and the well being of housing consumers is further affected through these linkages.|
|A Portfolio of Real Estate in a Transitive Economy." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|A Set of Indexes for Trading Commercial Real Estate Based on the Real Capital Analytics Transaction Prices Database." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper describes the engineering of a set of indexes for tracking same property realized price appreciation in the U.S. commercial real estate asset market, based on the transactions database of Real Capital Analytics, Inc (RCA). The set of regression-based, repeat-sales indexes developed so far includes a national all-property index at the monthly frequency, national quarterly indexes for each of the four major property type sectors (office, apartment, industrial, retail), selected annual-frequency indexes for specific property sectors in specific metropolitan areas, and other specialized indexes. The RCA database is one of the most extensive and intensively documented national databases of commercial property prices ever developed in the U.S., and attempts to include on a timely basis all transactions of commercial properties greater than $2,500,000 in value. The indexes described in this paper were developed de novo for the specific purpose of supporting and facilitating derivatives trading, such as ìindex return swapsî. This paper presents the price index methodology and an initial history of the major indexes starting in 2001.|
|A Spatial and Temporal Autoregressive Local Estimation for the Paris Housing Market." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This original study examines the potential of a spatiotemporal autoregressive (STAR) approach in modelling transaction prices for the housing market in Paris and its inner suburbs. We use a data set from the Paris Region notary office (ìChambre des notaires díŒle-de-Franceî) which consists of more than 1,000,000 transactions units between the first quarter of 1990 and the end of 2005. We use the exact X -- Y coordinates and transaction date to spatially and temporally sort each transaction. We first choose to use the spatiotemporal autoregressive (STAR) approach proposed by Pace, Barry, Clapp and Rodriguez (1998). We do not find a global significant improvement from the STAR method for the modelling of the Paris Region housing market compared to a standard hedonic estimate. Nevertheless, we find evidence of a strong presence of both spatial and temporal heterogeneity in the model. Hence, we decide to develop a spatial and temporal autoregressive local estimation method. With this approach introduced by Pace and Lesage (1999) in a spatially autoregressive setup, we do no longer need to exogenously specify geographical submarket, nor to impose specified parameter variation function to take spatial heterogeneity in hedonic coefficients into account. It appears that spatial autoregressive effects seem to be much more pronounced in the historical centre of Paris than in its surrounding area. Moreover, these effects which were sizeable and significant for some geographical areas in 1991 have been deeply reduced between 1997 and 2005.|
|A Stochastic Programming Approach for the Asset and Liability Management of a Real Estate Investment Trust." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Not only insurance and banking companies, or pension funds and trusts, but many more examples can be found where stochastic programming has been both theoretically and practically proven to help the management to make superior decisions in pursuing shareholder wealth and hedging against risk. This paper deals with applying this approach to strategic asset and liability management of UK based real estate investment trusts (REITs). A multistage stochastic program is used to represent the multi-period sequential decision process of the REITís management which pursues an optimal strategic composition of different asset and liability classes. The model that is proposed in this paper contains classes and subclasses composed of assets and liabilities that are homogenous in terms of cash flow and risk structure or maturity and payback specification. All assets and liabilities are interrelated through the main components of the model which are the income statement, a cash flow balance and the balance sheet of the REIT. Over the planning horizon of the model different scenarios will be considered to reflect the uncertainty inherent in parameters like rent and acquisition costs per square meter, occupancy, or interest rates. Beside the construction of future scenarios the challenge in the formulation lies in specific regulatory requirements for REITs and the indivisibility of real investment projects, latter leading to a mixed integer mathematical program. Beside the discussion of a REIT specific model and the generation of scenarios, the paper will also provide a numerical example and the choice of software for its solution.|
|A Study of Micro-Level Variation in Valuation Capitalisation Rates." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper investigates assumed capitalisation rates in 3400 DCF valuations of office properties in Stockholm, Gothenburg and Malmˆ during the time period 1998-2004. The study investigates determinants of property-level variation in cap rates and how going in and exit cap rates relate to each other. Exit cap rates are stable over time during the studied period but exhibit substantial variation across properties. Part of this cross-sectional variation can be attributed to the location of the property, part of it is due to other characteristics of the property. Exit cap rates are differentiated between properties of the same type on the same market segment, which shows that valuers apply property level fine-tuning when setting exit cap rates. Properties with low market rent and high long-run vacancy assumption typically have high exit cap rates. Properties in peripheral parts of a city typically have higher exit cap rates than properties in central parts. The implicitly assumed going-in cap rate (defined as assumed net operating income year one divided by estimated market value) follows a similar pattern as the exit cap rate but exhibits more temporary, property-specific variation. Going-in cap rates are strongly influenced by temporary deviations of vacancy rates and rents from assumed ìnormalî levels of vacancy and rent. The difference between going-in and exit cap rates is influenced by assumed short-run growth in net operating income in the way stipulated by theory: high assumed short-run growth is associated with going-in cap rates being lower than exit cap rates.|
|A Study on the Genetics Mechanism Model of Farmland Financial Institutions." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Real estate finance includes rural real estate finance and urban real estate finance. Rural real estate finance is also called farmland finance, but it has been omitted in the circle of real estate finance for a very long time. Farmland finance maybe not a problem for developed countries, but it is a key problem for developing countries, especially the socialist developing countries such as China. By means of modeling analysis, the former academic studies in the field of farmland finance are reviewed. At the same time, through the study on the generation mechanism of farmland financial institution, the recursive solution matrix of compatible motivation and critical point are obtained. Based on the foundation, the origin of the force is analyzed.
|A Valuation Method for Public Real Estate Management Based on the ìBest Ownerî Principle." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||"Many conceptional aspects of the Public Real Estate Management can be adapted from the Investment Real Estate Management. The crucial differences lie in the non-profit function and the constitutionally fixed tasks of the public hand. The proposed valuation method for Public Real Estate Management is based on Andreas Loepfes ìBest-Owner principleì which ties the value of a direct real estate investment unlike the usual ìmarket valueî, ñ seen as a business unit ñ to its owner. In this model the decision whether to sell or add an asset to a portfolio depends on the ownerís ability to extract additional value from this specific property. In the case of the public hand the analysis of creating value with a property is complex, since economic and non-profit values have to be considered. The idea of the material and/or economic creation of value from the Investment Real Estate management are extended for the Public Real Estate Management by an immaterial dimension. Within the material and immaterial creation of value, different aspects such as size, balanced population structure, etc. have to be measured and visualized for each property. Is the municipality the ""Best Owner"" or only ""one of many""? The combination of ""value-creation""- and ""Best-Owner""-aspect results in a framework which provides an overview of a portfolio with an appropriate action strategy such as ""hold"", ""sell"" etc."|
|Access to Primary Schools and House Values: Testing the Spatial Homogeneity of Hedonic Prices." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Since the mid 1970s, the impact of nearby schools on property values has been a major theme in the North-American literature, with most studies focusing on the influence of school quality. To a lesser extent, the impact proximity to school exerts on house prices has also been investigated together with the way the urban environment and distances to school affect student modal choices. Using the hedonic approach, this paper aims at assessing the price effect ensuing from proximity of, and accessibility to, the nearest primary school based on a sample of 8,285 single-family houses sold over the 1993-1996 period in Quebec City, Canada. While home-to-school walking distances are computed for properties located within one kilometre ñ a distance beyond which a school bus service is provided, car travel times measured on the 1994 GIS-operated topological street network are used for houses located further away from school. Main property features as well as neighbourhood and household descriptors are used as control variables in the model, with four urbanization patterns being distinguished on the grounds of residential densities. A major objective of this study is to test the spatial homogeneity of hedonic prices with respect to primary schools. In order to do so, the OLS method, Cassettiís expansion method and the geographically weighted regression (GWR) method are compared. Each method is assessed in regard to its ability to account for, and deal with, the presence of spatial autocorrelation in the residuals while bringing out spatial shifts in household preferences.
|Accuracy of the 2001 Valuation Roll for Greater Johannesburg." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The study investigates the accuracy of mass valuations for the purpose of levying assessment rates (land taxes) in one metropolitan council of South Africa. The sample frame is the Valuation Roll for greater Johannesburg, which was prepared in January 2001 and is still current. The sample frame contains 509705 records. Those properties that were sold in the period immediately preceding the valuation date and in the period immediately following the valuation date are selected and actual selling prices are compared with the valuation. Conclusions on accuracy of the Johannesburg Valuation Roll are drawn.|
|Advanced Forecasting Information System - PYTHIA: Application in Real Estate." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper presents an Advanced Forecasting Information System - PYTHIA - estimating real estate values. PYTHIA was developed with MS Visual Basic.NET and Dundas Chart for .NET. Database was developed with MS SQL Server 2000. System implementation includes the processes of sub-system development according their architecture. Moreover, the real interconnection of these sub-systems and their integration in a general complete and functional system is realised. Sub-systems implementation is specific for each module and their particular functions. The sub-systems are developed independent, according to specific requirements so that their interconnection will become feasible. System innovation focuses on sub-systems implementation and methodology. Sub-systemís that integrated in Pythia are: Data Adjustments, Data analysis, Special Events / Actions (SEA), Forecasting methods, Forecasts, Monitoring and Reporting sub-system. The applicability of the system was tested with real database real estate values. It was used in order to test and evaluate the IT system. Data is used here, which represents the total average dwelling prices of U.K. and is organized in months, from January 1983 up to September 2006. This paper will examine the present state in UK house market and will test the estimation methods on the monthly data. The time series data used for forecasting is again provided from the Halifax House Price Index and covers different categories of buyers (all, first-time buyers and home-movers) and houses (all, new and existing).|
|Ageing and Housing Demand: Dutch Cohort Evidence." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In the Netherlands, and indeed elsewhere in Europe, homeownership (rates) and housing consumption has increased over time. On basis of repetitive cross-section analysis one can conclude that homeownership rates are lower for younger and older people, while people aged in-between are overrepresented in the homeownership sector (m.m. for housing consumption). Based on these findings, one could conclude that the ageing of Europe will lead to lower demand for owner-occupied dwellings and more generally to lower levels of housing consumption. Actually, the relation between age and homeownership/housing consumption is more complicated than that. Three issues are at stake here: age, birth cohort (generation-effect) and time (period). On forehand, one can expect housing consumption by age follows an inverted U-shape, while housing consumption and both the cohort-effect and time-effect are positively related. The way to disentangle these processes is by cohort analysis. Cohort analysis seeks to de-compose the observed trend into distinct effects associated with the life cycle, birth cohort and time. The analysis treats an outcome variable - i.e. homeownership, housing consumption - as a function of age, cohort and time. We modelled several distinctive cohort-models to assess the relation between housing consumption and age/cohort/time. Our models show that in the coming decadeís one can expect - under the assumption of no structural breaks - that the ageing of society does not necessarily leads to lower housing consumption; i.e. the negative age-effect is offset by changing attitudes over time towards housing (positive cohort and time-effects).|
|Airports - Carbon Criminals or Diamond Geezers?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
On the back of sustained double digit growth in passengers and freight, investment in airports is booming. Similarly, occupational demand for airport-related property has seldom been stronger and active requests for investment product abound. Industry forecasts for continued strong growth in passengers and freight have lead investors to assume that this is a one way bet. One the other hand, environmentalists at all levels continue to decry growth in air travel, for goods and people, as a major contributor to global warming. These concerns are starting to manifest themselves in legislation. This paper takes a critical look at present and future investment in both airports themselves and airport-related property across Europe. Scenarios for future performance are proposed, taking into account different political, economic, social and technological outcomes.
|An Analysis of Niche Malls in Singapore: Competitiveness and Challenges." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The concepts of shopping malls have been evolving in tandem with changes in consumer trends and preferences, as well as demographics. Traditionally, one-stop shop and mega malls such as Raffles City, Suntec City, Ngee Ann City, Great World City and recently, VivoCity, have been planned and developed in Singapore for many years. However, there is a noticeable trend in Singaporeís retail market with the emergence of niche malls. They constitute an innovative shopping mall concept, employing the market segmentation strategy that is based on a customized tenant mix, targeted marketing efforts and promotions. With the aim of focusing on the most profitable niches, such malls are designed to attract specific target shoppers. Niche malls are also known as specialty shopping malls. Such a shopping mall distinguishes itself from a conventional mall in that it utilises restaurants and entertainment facilities, instead of departmental stores as anchor tenants (Maronick and Stiff, 986). Furthermore, a specialty shopping mall also makes use of natural settings, unifying and unique architectural designs to produce an image of entertainment and recreation, which exceeds that of shopping. This study aims to examine the role of smaller-scale niche malls and their marketing strategies in keeping up with the rising competition in the industry. A case studies approach is applied to determine the competitiveness and challenges faced by these malls in attracting target shoppers.|
|An Analysis of the Development Decision Making Process Among Inner-City Apartment Developers." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||There is a considerable amount of literature examining at which point developers should proceed with large developments. However, in many urban centres the growth of the apartment market is a relatively new phenomenon, especially in downtown areas previously dominated by office and retail development. While previous investigations have developed frameworks under which developers are likely to build and lease space in downtown areas, apartment markets in these centres carry considerably more risk. This is due, in part, to the large number of potential buyers and the diversity of the potential buyers, consisting of both owner-occupiers and investors. Also, there is no past pricing track record, or very little pricing track record, on which developers can base their development decision. Much of the existing literature focuses on price as a trigger for increased development activity and on the strategic advantage of a developer acting before other developers. As detailed price information was virtually non-existent when the first apartment developments took place in these urban centres, these models may have limited application in describing the decision heuristics that developers use in deciding when to build and what to build, particularly when there are few, if any, competing developers. Structured interviews are conducted to assess how developers viewed the risk profile of apartment development in downtown locations vis-‡-vis alternative development options such as offices and retail. Conclusions on how these decision frameworks affect more general models of development behaviour are examined.|
|An Analysis of the Institutional Environment of Asian REITs: The Singapore and Hong Kong Experience." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The direct real estate market is seen to be less efficient than the stock market, given its higher transaction costs and lower turnover rates. The liquidity of real estate investment trusts (REITs) has mitigated the inefficient problems of the direct real estate market but it also poses the question of the REITsí efficiency. Efficiency in turn is affected by the institutional environment of different jurisdictions. This paper seeks to investigate the institutional environment pertaining to Singapore and Hong Kong that will affect the ërandom walkí performances of 2 key Asian REITs ñ CapitaMall Trust (CMT) of Singapore and the Link REIT of Hong Kong. The presence of both private and public institutions may well increase the market costs of information flow, non-transparency, higher transaction costs and the cost of capital. Empirical evidence deploying the unit root techniques of the Augmented Dickey-Fuller test and the Phillip-Perron test suggest that the daily closing prices of the 2 REITs of interest follow the random walk behavior, implying weak-form market efficiency. The correlation test and the Granger causality test are conducted on the daily closing prices of CMT and the Link REIT. The 2 REITs are found to have a low correlation, and they do not Granger-cause one another. The random walk behavior is found to be closely linked to the institutional environment of the two countries, specifically in terms of the taxation system, the land system and the REIT (or property trust) guidelines. Some of the more conservative and less flexible government policies have also hindered market efficiency, contributing in part to the random walk behavior of the REIT price indices.|
|An Analysis of the Retail Property Market in Taiwan: Competition between Department Stores and Shopping Centres." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In planned shopping centres, department stores normally functioned as standard anchors which are the strongest sources of customer drawing power. Thus, department stores and shopping centres are with mutual benefits rather than competitors. However, the retail property market in Taiwan has long been dominated by large department store chains. Although planned shopping centres had been developed more than a decade in Taiwan, they could not compete with department stores. The market position as ìregionalî and ìsuper-regionalî shopping destinations is still at the hands of department stores. The mainstream department store brands had never become anchors of shopping centres. And facing the competition from newly developed large-scale shopping centres, the existing department store chains also enlarged to equivalent size. Department stores even become a form of retail property rather than retailers targeted by newly launched REITs (2006). Leading department store chains are able to contain strongest retail and service tenants. Consequently, most planned shopping centres in Taiwan still use the same operation pattern of department stores. Consumers can never distinguish the differences between a shopping centre and a department store. The data was collected during July 2006 to March 2007 from 8 urban areas in Taiwan, and included more than 12 large-scale shopping centres and 51 department stores. The detailed analysis focuses on the market positioning, tenant mix strategies, and operational cost structures. The results show the changing consumer behaviour and operational / managerial patterns of retail property in Taiwan that can give some information for recent inflow foreign investments.|
|An Analysis of UK Securitised Real Estate Returns: 1996-2006." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
The monthly returns on UK real estate companies, which in the future may become REITs, are analysed over the period September 1996 to July 2006. The results indicate that the risk premiums on the UK real estate companies are significantly related to the risk premium on the stock market and to the returns of mimicking portfolios for size and book-to-market equity on common stocks. Macro factors have low explanatory power. Real estate specific factors, like real estate dividends and market cap, are found necessary to describe real estate returns in addition to the three stock market factors. The results also show that real estate has outperformed the stock market in the analysed time period with 9.11 %, due to the high returns of the real estate companies in the past five years. The risk attitude among investors is found important in explaining the reason for this high difference in performance. In addition, the results show that the office sector has outperformed the other commercial sectors in the analysed time period.
|An Appraisal Based Residential Property Index." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Appraisal-based indices for commercial property have been well established for many years, yet it is only in relatively recent times that serious proposals for transaction-based commercial property indices have been put forward. In contrast, in the residential property market, transaction-based property indices have been almost universally accepted; despite their well documented problems. The paper considers existing approaches to measuring movements in the residential property market, issues surrounding index construction and includes a review of the relevant literature. Based on data provided by the Australian Valuation Office, the paper considers the development of an appraisal-based residential property index and discusses its applicability and performance in relation to a number of transaction-based indices used in Australia.
|An Econometric Analysis of the Determinants of Takeovers and Mergers for the UK Real Estate Market." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The aim of this paper is to empirically identify the factors which are important in explaining takeover activity in the UK real estate market over the past 20 years. We adopt a dynamic duration analysis which allows to model the probability of mergers and acquisitions (M & A) as a function of both macroeconomic variables (inflation, interest rates etc) and company financial ratios. The inclusion of time-varying macroeconomic variables marks a departure from most previous studies of company acquisitions. The analysis is based on a unique panel data set collected from Thompsonís DataStream (total number of 139 companies), for the period 1980 to 2001. The findings suggest that the most important determinants of the takeover activity in the UK real estate market are company liquidity, profitability and debt coverage as well as financial market volatility, interest rates, current account and the economic cycle. The latter provides evidence that the macro-economy crucially affects the probability of mergers and acquisitions for the real estate industry in the UK. This paper represents our effort to build on the existing M & A literature and develop an early-warning system able to detect companies being a subject of a takeover bid. This will be useful for the industry professionals, regulatory authorities, shareholders and investors in their attempt to maximize their wealth.|
|An Empirical Analysis of Structuring Commercial Mortgage Backed Securities: An Australian Experience." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|An Estimate of the Land Incidence on a Property Value." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
An estimate of the land incidence on a property value has scarce scientific significance in valuation assessments. In fact, the Italian appraisal tradition considers a property as a whole due to the close complementarity existing between its parts. However, the concept of ìcomplementary valueî is wellñknown in investments evaluations, where the complementary ratio indicates the incidence of the land cost on the development total costs and expected yields. The component approach has become of active interest in Italy as a consequence of the harmonization process undertaken by the EU through International Accounting Standards. Companies involved in IAS accounting have to break up their instrumental tangible assets (IAS 16) in accordance with their respective useful existence and incidence cost on the total value, revaluing them at a fair value, in place of their historic cost, in order to attribute the Income Statement the sole long-term running expenses inherent to the buildings. The non depreciable land cannot be amortized. This study intends to individualize a methodological approach to the land incidence estimation. With respect to its application, especially within the Italian framework, this operation poses many transversal issues to the accounting, estimate and fiscal disciplines. This paper proposes a critical analysis of the EVS 2003 evaluation criteria, underlining how the assets value, far from being allocated through a market oriented approach, is rather inspired by income capitalization or mixed techniques. The aim of the research is to show, by way of an example, the caseñstudy of Bologna Expo District.
|An International Comparison of Publicly Listed Property Companies: Does Tax Transparency Pay?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Tax transparency for publicly quoted property companies is a hot topic with international property investors. Among the main reasons to promote tax transparent vehicles are the claims that tax transparency improves equity securitization as well as performance. However, there are large differences between tax transparent property vehicles around the world investors have to both acknowledge and appreciate. This paper identifies the differences between tax transparent structures and investigates how these differences might explain performance behaviour of tax transparent companies. The evidence suggests that REITs do outperform tax paying companies, and that this is partly the result from limitations REITs have to their activities.|
|An Investigation of the Incidence of National Non Domestic Rates in the UK." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper relates to the study of National Non Domestic Rates (NNDR), a property tax related to the rateable value of buildings not used for domestic purposes. Rateable values are reviewed every five years while the NNDR multiplier is adjusted annually in line with the RPI. The research specifically relates to analysis of the incidence of the NNDR tax, ie who ultimately pays the tax - the landlord or the tenant. The work undertaken set out to answer the following questions: 1 Is there evidence that rents move in response to a change in NNDR? 2 What is the time period of adjustment for rents following changes to NNDR? 3 Are there regional/sectoral effects in the relationship between rents and NNDR? Enterprise Zones are at the core of the empirical analysis because they were subject to full NNDR relief, along with other benefits. This means that they can act as a useful control group against which to assess properties with similar characteristics in nearby areas receiving no relief. Due to a lack of rental data for Enterprise Zones during their designation period, the main focus is on the period of adjustment once an area ceased to have Enterprise Zone status.|
|Analysis of Housing Security Policy for Rural Immigrant Workers in Chinese Cities." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The purpose of the paper is to analyze the housing security policy for rural immigrant workers in Chinese cities and its performance, to contribute the policy frame for solving the housing problems of immigrant workers. Investigation method and public policy analyses are jointly applied in study. Based on the investigation on housing status of rural immigrant workers in Chinese cities, it will check the performance of current housing policies, including affordable housing policy, very low rent housing policy, public accumulation fund policy. The orientation of rural immigrant workers in cities, the social security system and the housing supply policies related to them, will be found to be the primary factors influenced government policy. It emphasizes that the housing policy should be set up on the measures of housing supply and demand of rural immigrant workers in Chinese cities. And it will try to construct the countermeasure system that produced by theoretical model. The result shows that the housing demand of immigrant workers should be considering with the supply and security system of urban residents' housing together. Accordingly, the proper measures the government should take focus on the construction of effective institutional arrangement of distribution, so as to prompt the housing policy to achieve its maximal economic and societal effect using the market mechanism.|
|Application of the Rough Sets Theory and The Fuzzy Sets Theory in Land Management." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper presents a simplified way of application of rough set data analysis in decision-making process concerning the use of real estates. The results will be presented based on the example of real estates at the disposal of local communal government.In the second part of this paper an object of research was the area of the fringe area of the city and the village and parameters characterizing it, definite on the ground analyses of current forms of the land use with the utilization of foundations of the fuzzy sets theory.|
|Are Valuations Representative of Housing Prices in the Market?: Evidence from the Spanish Market." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper is concerned with the variation between house price and valuation in Spain. Spanish regulation requires valuation companies to estimate price-trends in order to avoid speculation and adjust values to the real price. As this information is not widely available, companies have to build their own data series. This paper uses information from valuations of houses by TABIMED, a medium-high sized Spanish valuation company. The analysis is based on valuation evidence from 2005 and the first half of 2006 compared with the official transaction database to estimate the extent to which valuations are representative of prices. Analysis is at the city level to allow a more detailed assessment of the main housing characteristics that affect price and transactions. A pseudo-panel is constructed to explore the relationships between housing features, transactions and prices providing a tool to identify those locations where valuations provide a representative sample to estimate prices and housing features.|
|Asset Allocatorsí Attitude Towards Real Estate and Alternative Investment Classes." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
This paper presents information on institutional investorsí and investment consultantsí attitudes towards and their performance assumptions for the alternative asset classes, property, and the mainstream markets. It also gives estimates of UK institutional exposures to these asset classes. Much of the analysis is based on a series of interviews and the first section outlines the methodology in this respect. To set the context for the remainder of the paper, this is followed by a brief introduction to investment decision making in the institutional market, and after this, a brief discussion of the asset classes which investors and consultants see as distinct. The rest of the paper covers the substantive issues. Institutional investor exposures and trends are detailed. This draws on both the discussions with investors and consultants, information specially provided by the WM Company, and published reports and surveys. The prospective performance assumptions are outlined and the divergences from the historic outturns and between respondents explored. Finally, the paper considers the allocations implied by these views and contrasts them with those indicated by the historic data and current institutional allocations.
|Asymmetric Betaís in Bull and Bear Markets: Evidence from US Equity REITs." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
The purpose of this paper is to examine the stability of the beta coefficient for US equity REITs over bull and bear market conditions. In particular, we assess whether and to what extent the implied relationship between beta and returns can be established in up and down market conditions using weekly and monthly US equity REITs returns under different model specifications. Both the equity REITs index and US stock market indices are used as benchmarks. Our results bear significant investment implications for the accurate measurement of US equity REITs risk.
|Automated Valuation Models in the Mortgaging Industry." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The banking industry finds it more and more difficult to achieve good returns in the mortgaging sector. Credit institutions are seeking to lower there costs and they find that the workflow of the automobile industry is not very different from the workflow in the banking industry. This approach also affects the way real estate valuations are undertaken. First in America and now also in Europe, some institutions use real estate mass appraisals for the valuation of the assets. The Presentation gives an introduction to mass appraisals, addresses different techniques and gives an overview of the adoption of mass appraisal in Europe.|
|Behavioural Biases in the Property Market: Reversal of the Anchoring Effect." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|Best Practice for Computer Aided Facility Management - Market Survey." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Since the 1990s Computer Aided Facility Management (CAFM) has been providing efficient IT tools for the illustration, evaluation and controlling of Facility Management structures and processes. In these years numerous software systems with various systematic approaches, functions and varying success have been established on the market. Despite the multitude of suppliers and users in the different branches there is still insecurity concerning the procedures and achievable effects. This is closely related to the lack of well documented, transparent and successful case studies. In addition little is known about how CAFM is implemented successfully and the factors leading to success. From the economic point of view it is very important to support this process in order to avoid wrong decisions and unnecessary investments. Especially implementation strategies and formulae for success are of great interest. This paper presents the first comparative analysis of the CAFM sections in Germany, Austria and Switzerland. Due to the geographical location of the project partners the entire German speaking area could be covered and thus the results of the analysis reflect the state of the art of CAFM implementation and use in the German speaking area. The study of successful CAFM projects in companies and public institutions should make the know-how and practical experience publicly available. It presents current trends and technologies and provides recommendations for the successful CAFM implementation. This contribution addresses users, software developers, implementation partners, consultants, service providers, students and academics as well as decision makers in the field of CAFM.|
|Beyond Index-Based Hedging: Can Real Estate Trigger a New Breed of Derivatives." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||As index-based real estate derivatives are being introduced in Europe and the US, this paper questions the validity of these instruments for hedging risks involved in commercial real estate markets. It first examines the concept of index-based derivatives in the broader context of the history of derivatives and shows that this recent concept may not be appropriate for intrinsically heterogeneous assets such as real estate. Based on an innovative framework drawn from the field of biomedical sciences, it then considers several alternatives and concludes by proposing the establishment of a radically new breed of derivatives market that would enable effective hedging of commercial real estate assets.|
|Brick by Brick: Performance Analysis of the Dutch Construction Sector." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Understanding of one of the major building blocks of real estate development is at least partial. How do firms in the construction sector perform? Does the relative performance change over the business cycle? Do differences in performance relate to observable characteristics? Understanding the performance within the construction industry is of importance in advising both policy makers and managing boards how to boost productive performance. Also, with a better understanding one would better understand real estate fundamentals across regions over time. We propose unlike neoclassical theory of the firm that firms not necessarily operate fully efficiently due to organizational or market failures like perverse incentives, hidden actions, imperfect information, strategic behaviour and moral hazard. Subsequently we formulate a nonparametric efficiency framework DEA in which production is related to inputs used in the production process. We apply the framework to a micro sample of Dutch firms in the Construction Industry to calculate the performance within the sample over various years. As such we would like to get a better understanding of the real estate market building on contributions of others; brick by brick.|
|Can Government School Zonings Impact on Residential Property Prices?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||An increasing aspect of education in New Zealand and Australia is the high cost of private school education and a trend for students to complete their secondary school education in high performing government high schools. While entry to some government high schools is selective and based on academic performance in primary school, there are a number of State schools that have gained popularity due to the studentsí results in public exams. These schools are zoned base, with only students living in those specified zones being able to attend that particular school. With the increasing trend for parents to enrol their children in the better schools, there have been numerous cases of false addresses being given for enrolment purposes, families buying or renting houses in specific areas to ensure they are in the correct zone for their childrenís high school education. This paper analyses the residential property markets in several school zone locations in Christchurch, where the High school is ranked as a top performing school and has a high enrolment demand. Property within and just outside these school zones are compared to determine the influence of high school boundaries on residential house prices.|
|Can Real Estate Investors Trade on Past Performance ?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||A number of studies of commercial real estate markets find evidence of persistence in returns, which suggests that a profitable trading rule could be developed that trades on past performance. This paper tests this proposition by analysing whether an investor can achieve higher returns than the market from buying the property fund that was the top performer in the previous year using annual returns over the period from 1990 to 2006. The results indicate that buying last yearís winner may be a rule-of-thumb that outperforms the market, even after transaction costs.|
|Cashing in on the Green Machine: are Developers Missing Out?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||A visit to the local DIY store might encourage you to bring home more than just a new drill or a couple of rolls of wallpaper since the latest ëmust-haveí item now being marketing is your very own wind turbine and solar panel. For the bargain price of £3,000, you can have two solar panels (excluding installation) and a wind turbine fitted by an approved engineer. The promise to reduce electricity bills by up to 30 per cent and provide 50 per cent of your hot water needs whilst doing your bit to save the planet, is certainly very appealing, particularly at a time when energy costs are rising. If consumer demand is such that DIY stores are now stocking these products at relatively affordable prices, why are developers reluctant to install wind turbines and solar panels as standard features on new homes or commercial buildings? One suggestion is that this type of renewable energy technology (particularly wind turbines) is largely ineffective and only purchased by the middle classes who wish to be seen to be green. However, there is clearly a market for this technology which residential developers in particular are missing out on. This report investigates the apparent reluctance of developer to embrace this technology and contrasts this with public attitudes towards producing their own green electricity by installing solar panels and wind turbines on their property.|
|Challenges and Potentials of Bundling Real Estate Functions in German Companies." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
After a primary intensive debate in the 90th, discussions about Corporate Real Estate Management (CREM) issues - except of the introduction of REITs - have largely disrupted in Germany. Moreover the ongoing professionalizing process of real estate functions in German companies came largely to halt. In contrast a lot of CRE Managers still assume considerable potentials in raising efficiency. The prerequisite of realizing these potentials is seen in widening the mandate of CRE units onto all real estate functions and corporate property.The aim of this paper is to analyze the main drivers, perspectives, and results of bundling real estate functions in one centralized CREM unit. Via expert interviews in twelve chosen best-practice companies, mainly from the industrial sector, the developments of CREM in Germany over the past 15 years are compared. The study shows the main causes for bundling real estate functions, the primary prospected potentials, and the conversion process from a decentralized facilities caretaker to a centralized real estate service provider. Furthermore resistances of business units CREM has been faced with during the bundling process and how to solve them are emphasized. The main achievements and average savings in occupancy costs as a result of bundled real estate functions, untapped potentials, and measures to be taken into action to tap these potentials are presented, too. Additionally the organizational implementation of CREM units within the company is shown. An outlook on further steps to be taken to fulfil the requirements and needs of both shareholders and occupiers is given.
|Changes and Modifications in Residential Neighbourhoods as a Factor of Housing Pricing: Jerusalem and Haifa as Case Studies." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Households may undertake housing changes and modifications (HCMs) for two basic reasons ñ increasing property value and gaining personal utility. In environmentally unfavourable or physically deteriorated neighbourhoods, in which no substantial price gain can be expected, HCMs may be motivated mainly by improving personal utility, rather than by maximizing return on HCMs. As a result, in such neighbourhoods relatively little accumulation of HCMs may occur. To verify this hypothesis, eight residential neighbourhoods in two large cities of Israel ñ Jerusalem and Haifa, were analyzed. The incidence of HCMs was found to be related to neighbourhood and building characteristics, while the amount of accumulated post-occupancy HCMs helped to explain the variation of selling prices of apartments and houses.|
|Chasing the Market: Housing Affordability, Home Ownership and the Private Rental." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Economic liberalisation of the economy in the 1980s the New Zealand housing market has undergone significant transformations. Since the early 1990s home ownership in New Zealand has been in decline and the role of the private rental market has become increasingly significant, particularly in the Auckland region. Rapid house price inflation post-2000 has adversely affected first-time buyers and there is evidence that the traditional ëtransitionalí role of the private rental market is changing, as the rental market increasingly incorporates older and wealthier households. This paper examines issues relating to house prices and housing affordability in Auckland and reflects on the long term economic and policy implications of the rising importance of the private rental market in the housing system.|
|Co-operative Privatisation Models in the German Housing Industry." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Since 1997 about one million tenements in Germany have changed hands. Additionally approximately one million transactions will be carried out until 2010. The public interest in the processes of these substantial transactions as well as in the models they follow is extremely high at the moment as many German towns (e.g. Freiburg) use or intend to use those transactions as an instrument for selling their assets primarily to private equity funds in order to achieve a budget consolidation. The question whether housing co-operatives could represent a socially acceptable alternative form of privatisation is currently seriously discussed in the German public, politics and academia. The paper discusses this possibility. It consists of two parts. The first part includes a theoretical examination of the nature of co-operative property. It deals with a question that is of basic relevance for regulatory and housing policy: Can the allocation of property rights in a co-operative be assumed as a form of private ownership? The second part of the paper examines different examples of co-operative privatisation models in Germany that were currently implemented. The types of models are clustered and factors are analysed determining successful or unsuccessful co-operative privatisation models. In conclusion the paper provides a theoretically based contribution to a current highly sensitive public topic of housing policy in international real estate.|
|Co-operative Privatisation Models in the German Housing Industry." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|Commercial Real Estate Investment in New Zealand." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||New Zealand presents a number of investment opportunities for commercial real estate investment by UK and Europe based funds, corporates and individuals. This paper looks at current market trends in NZ commercial property real estate market (including REITS and fractional ownership schemes) investment requirements and the statutory regime taxation regime applying to real estate investment in New Zealand generally|
|Commercial Real Estate Return Cycles: Do Capital Flows Matter?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
This paper examines the short- and long-run dynamics among institutional capital flows and returns in private real estate markets. The main tool of analysis we employ is a vector autoregressive (VAR) regression model in which both institutional capital flows and returns are specified as endogenous variables in a two equation simultaneous system and in which we also control for various financial and economic variables. When aggregating across U.S. CBSAs and property types, we find some evidence that both lagged NCREIF returns and lagged NCREIF flows significantly influence current returns. However, these aggregate results mask significant cross-sectional variation across different metropolitan areas and property types. In particular, we provide evidence that our aggregate results are driven by a limited number of large CBSAs. We find no evidence that returns are predictive of future NPI capital flows. We also document that institutional capital are not generally predictive of relative future capital flows.
|Communicative Planning for Sustainable Development: The Inner Logic of the Coase Theorem and a Coasian Planning Research Agenda." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|Conditional Correlations and Real Estate Investment Trusts." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
The paper studies the conditional risk premia and volatilities in the Real Estate Investment Trust sector. In particular, the conditional correlations of REITs are estimated against a variety of equity and bond series. The paper builds upon recent work in the REIT literature to have examined the dynamics of the sector. A growing number of papers have examined the volatility characteristics of the sector. The data used in this paper consists of daily returns for the period January 1 1990 through December 30 2005 totalling 4175 observations. During this time the popularity of REITS has expanded dramatically with massive growth in investor awareness and interest focusing in on the return and volatility characteristics of the sector. The analysis is conducted using a bivariate GARCH framework. The risk premia for REITs are estimated and the conditional correlations against a variety of equity and bond sectors. Domestic equity sectors representing large cap, small cap, value and growth stocks are analyzed together with international equity markets. In relation to bonds both the Treasury and corporate markets are analyzed, with a variety of maturities analysed.
|Conditional Distribution of Real Estate Returns." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Several empirical studies have examined the volatility of either the components or the whole of real estate returns of different sectors, using data sets from a variety of sources. A number of studies looked in detail into the unconditional distributions of returns, such as Young et al (2006), other studies attempted to employ more sophisticated quantitative techniques attempting to support stochastic conditional distributions, such as Patel and Sing (2000), and Fourt et al (2006) looked into asset specific distributions using a large data set. This paper examines separately the stochastic distribution of real estate assets from the distribution of market aggregates, proposing a theoretical explanation for the link between the two. The conditional empirical distribution of each kind of capital returns is then derived by analysing the residuals of a simple first order autoregressive deterministic structure, which may or may not be complemented by higher moment conditionality GARCH family of models. The study examines capital returns of a range of real estate sectors, using both established market indices and transaction based indices that are developed for the needs of the study, and discusses the derived conditional distributions.
|Continental Factors Revisited: Evidence from International Property Shares." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Given the local character of real estate market, real estate investments have always been identified as an opportunity for diversifying internationally. Low international coherence can reduce the risk of both private and professional multi asset investment portfolios. Early research confirmed, showing that US investors would greatly benefit from spreading their real estate portfolios abroad. At the same time Eicholtz et al. (1996) showed that real estate returns were driven by continental factors. This subject is relevant for determining the country allocation of international real estate portfolios. Since, if returns are driven by a continental factor, investors should look for diversification opportunities outside their own continent. Over the last decade listed real estate markets have matured internationally, and many of the market dynamics reported in the past have changed. This paper will add to the existing literature by explicitly considering potential time variations in international correlations. In order to assess the effect of market maturity, liquidity and institutional involvement an international scope grants possibilities for new and valuable insights in the matter. Therefore we will study monthly total returns of all real estate shares traded on the twenty most prominent financial markets in the world. We analyze a period that dates back to 1985 and we will explicitly focus on variations over time. For this project we will employ the unique GPR General Quoted Database which offers us complete market coverage, which is free of survivorship bias.|
|Continuous Education in Real Estate." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||We will examine the ways in which university and industry are reacting to the demands for continuous education as a key issue for Real Estate professionals development. The focus will be on a key issues and problems encountered in Europe and Slovenia. New model, of lifelong learning in the context of university education which has been developed at the University of Ljubljana, will be presented. The aim of the model is to fulfil the needs of professional development in a contemporary society. The model is based on the computer supported collaborative learning, supporting the new organization of teaching and learning with the ICT.|
|Controlling for Transactions Bias in Regional House Price Indices." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Transactions bias arises because properties that trade are not a random sample of the total housing stock. Price indices are potentially susceptible to this bias because they are typically based on transactions data. Existing approaches to this problem have relied on Heckman-type correction methods where a binary probit regression is used to capture the differences between properties that sell and those that do not sell in a given period. However, this approach can only be applied where there is reliable data on the whole housing stock. In many countries ñ such as the UK ñ no such data exists and so there is little prospect of correcting for transactions bias in any of the regularly updated mainstream house price indices. This paper offers an alternative approach based on information at postcode sector level. The probability of a property transacting is modelled by applying fractional probit regression (FPR) to the proportion of properties that sell in each postcode sector. Transactions data on 1.4 million house sales distributed across 1,200 post code sectors in the South East of England over the period 1996 to 2003 are used to create a correction term for in a simple monthly hedonic house price regression. Corrected and uncorrected price indices are compared.|
|Corporate Governance and Performance in the Market for Corporate Control: The Case of REITs." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
We examine 111 mergers and acquisitions by public U.S. Real Estate Investment Trusts (REITs) 1997-2005. We find that acquirer abnormal shareholder returns are significantly positive for mergers with private targets and significantly negative for public targets, a result that is consistent with findings for conventional firms. We examine the relationship between acquirer corporate governance and abnormal returns. Shareholder returns are lower for REITs wih larger and staggered boards, longer CEO tenure, lower percentage ownership by their CEO and management and when block holders are present. This is consistent with recent evidence form the conventional financial theory. Returns are positively related to the firm's operating performance prior to the merger announcement and negatively related to the leverage of the acquirer.
|Corporate Governance and the Valuation of Listed Real Estate Companies." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In a setting of intense competition for international capital companies diligently have to respond to an increasing demand by investors for higher transparency and more effective mechanisms of corporate control. In this context the term ìcorporate governanceî has attracted major attention in the professional sphere and across different areas of academic research. From a theoretical as well as from a professional perspective the most important issue with respect to corporate governance is whether it is rewarded by the capital market. Using corporate governance data of a leading database, this study empirically investigates the impact of corporate governance on the valuation of publicly traded real estate companies for five major real estate capital markets worldwide.|
|Corporate Real Estate Practice in Australia." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper will investigate the corporate real estate practices of some 30 major corporations in Australia. It is a preliminary research document that will attempt to study such areas as, the amount of CRE shown on balance sheets, the relationship of those holdings to overall assets, as well other new and innovative ways of assessing CRE performance (from the balance sheet) and its relationship to company performance. To enable this research to be undertaken the various corporations will also be investigated to see if they actually have CRE departments, what staffing levels are in the CRE departments, (if any) what outsourcing is occurring, what benchmarking measures are in place to assess the performance of their CRE, if ëgain shareí practices are in operation, if flexible CRE practices are used and if CRE assets are operated as cost or profit centres. The preliminary conclusions indicate that there is a great disparity between corporations. This may indicate that certain classes/types of companies do not need the CRE assets that others do. It may also indicate, as previously supported by other research, that some companies fail to capitalize on the potential of their CRE assets to increase overall return and in the long run increase shareholder value.|
|Correlation between Socio-Economic Trends and Real Estate Dynamics in the Context of the Urban Regeneration of the Municipality of Gangi." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
"Over the last decades the municipality of Gangi experienced the lost of population due to the strong emigration of its inhabitants towards more developed areas such as the North of Italy. Gangi is the last town of Palermo county, located 120 Km away; it rises on the Mount Marone to an altitude of 1011 meters on the sea level. To the visitor's eyes it is occurs in all its exceptionality of ""Stone Cone"" of houses leaned to close to each other, compact and chromatically similar, separated by two great valleys, in which the rivers Gangi and RainÚ flow and with an evocative scene in the background, the majestic Etna. Gangi is an historic municipality: the town delineates an increasing organization from mount to valley: the higher part, inside the three hundred town-walls, encloses the historical centre and it is characterised by narrow lanes tightened in ancient cobblestone paving. The lower part, that is expanding, is characterized by residential constructions. This trend affected the real estate market generating vacant spaces and a downward of prices. Currently, the Local Public Authorities start to promote a large project of urban regeneration intended to settle new functions able to attract both tourism and inhabitants. This Paper aims at highlight the different scenarios able to change the current situation and to quantify the effects in terms of price growth, change of population structure and labour market."
|Covenant Strength and the Initial Yield: An Explicit and Calibrated Risk?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Under the traditional method of valuation, risk is implicit within the initial yield which is used to capitalise the net income into perpetuity. The yield is derived from the risk free rate, usually long-dated gilts, plus a risk premium (Hoesli and MacGregor, 2000). Where the risks are seen to be high, a higher risk premium should be added. Individual differences in the investments characteristics, such as covenant strength, are taken into account by subjective yield adjustments. The initial yield is obtained from sales comparables, with potentially only limited knowledge of the fine details associated with the transaction, such as the covenant strength default rating. This paper considers whether covenant strength risk is explicitly accounted for in the selection of the initial yield when valuing a commercial property investment, and if so, whether the associated risk premium can be directly calibrated to the credit score. The research extends previous work by the authors on Property Risk Scoring, which involves the analysis and scoring of the total risk of the property asset (Hutchison et al. 2005). his paper presents analysis of ICC credit scores of the top 25 retailers in the UK over the period 2002 to 2006, plus a case study approach to the covenant strength variability of two shopping centres to illustrate the key issues in calibrating the covenant strength risk premium when a composite initial yield is used. The paper also considers the manner in which covenant strength risk is reported to clients.
|Creative Solutions Needed ! The Changing Appraisal Market." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||"The residential appraisal community in the US has become unable to respond to their clients needs in terms of fees and speed of delivery, and is experiencing loss of market share to more abbreviated appraisal products as well as automated valuation models. There needs to be a change in the way professional valuers are approaching their market. The old methods and attitudes are no longer what their clients need to stay competitive, particularly in a down market where lenders are competing for a much smaller pool of borrowers. This paper examines a case study of a company based in Calgary Canada that has expanded into the US marketing to provide appraisers with new tools to compete with instant value AVMs through the use of technology and innovative techniques. This company has devised a method of dividing up markets into ""zones"" and through mass appraisal methodology, provides the zone appraiser with the ability to value and photograph every property in advance - known as ""preappraising"". In addition, the system allows for major database improvement over existing public records and provides a new source of income to the appraiser through marketing of the photograph and data itself. This paper reviews this Preappraisal concept in a case study format and further discusses the market needs for revamping what the appraisal industry provides to their mortgage lender client base."|
|Critically Evaluation the Interrelationship Between Population Migration and Housing Markets in the UK." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|Cross Market Dynamics of REIT Markets." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The popularity of REIT in both the developed and emerging markets of the world attests to the significance of REIT in worldís economies and investment choices. The relative ease with which investors can indirectly invest in real property is transforming portfolio asset allocation. While the place of REIT in a mixed asset portfolio is of interest to investors, it is equally important for investors to know the cross market dynamics of the REIT markets so that they can make informed investment decisions especially with regard to diversifying their portfolios. Therefore, this paper examines the diversification benefits from investing in the sampled REIT markets of US, Canada, Belgium, South Africa, New Zealand, Australia, Hong Kong, Japan, South Korea, Malaysia and Singapore from 1987 to 2006. The focus is on the diversification benefits from extending Singapore REIT portfolio into the sampled REIT markets. Co-integration methodology is used to analyze both long and short term dynamics of the sampled markets. This is followed by F-test to ascertain the statistical significance of any improvement in performance resulting from extending a Singapore REIT portfolio into the REIT markets. The results show that Singapore REIT market is not co-integrated, in the long term, with any of the REIT markets except Canada. Furthermore there is no evidence of Granger causality between Singapore and the other markets (except Japan) over the short term. These findings imply apparent diversification benefits from extending Singapore REIT portfolio into the sampled REIT markets. The diversification benefits are found to be statistically significant.|
|Customer Relationship Management of German Real Estate Companies - Results of an Empirical Study." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The conditions of the residential or commercial real estate rental market in Germany has been changed in the last years for the benefit of the tenants. This causes new challenges for real estate companies with rental core business. They have to react with new sales and marketing strategies, which focus more than up to now on the customer instead on the property itself. After all, the risk/return-ratio of real estate investments notably depends on the companiesí abilities concerning acquisition and customer relationship. A company should therefore aim at a high loyalty of the customers with a high sustainable customer value. To realise this, a lot of information about the tenants are necessary. Customer relationship management (CRM) is the instrument to get and manage this information. The successful application in other lines of businesses shows that CRM could generate competitive advantage for the respective company. Therefore the aim of the following research is the finding of the CRM usage in real estate companies in Germany. The results of a survey records the customer orientation of real estate companies and provides the empirical database for the analysis about the strengths and weaknesses of customer relationship setting of property companies. For this purpose 234 interviews with managers were realised. The standardised questionnaire contained about 140 questions, which comprise thematically the whole customer lifecycle from the acquisition to customer win-back. The results of the data analysis show that the attended companies have accumulated needs in terms of customer orientation and customer relationship management.|
|Cutting the Carbs: Optimum Measures to Reduce Emissions in the Existing Office Stock." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The conclusions of the Stern Report (HMSO, 2006) made clear the increasingly stark choices facing mankind. If stringent action to reduce carbon emissions is not taken within the ten to fifteen year period between 2016 and 2021, the coming generations are locked into climate disaster (HMSO, 2006). The report also made clear the economic and social consequences for mankind globally of limited action on climate change. Finally the governments of nations like Australia and the US who had vigorously asserted that scientific research on climate change was flawed and unreliable, softened their stance and bowed to the overwhelming evidence on climate change and global warming. Australian Prime Minister Howard agreed to negotiate on carbon trading in November 2006 and this marked a major shift in environmental policy. As the political will to act now appears to be in place, the property profession needs to be advising clients how to reduce property related carbon emissions. This paper highlights the degree of measures typically required to the Melbourne CBD office building stock, over a 15 year time frame to 2020 to deliver the level of reductions noted by Stern (2006).|
|Data Dilemmas in European Real Estate Markets." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Whilst the preliminary nature of and subsequent revisions to estimates of real output provide a source of data uncertainty to macro-economic forecasters, many macro-economic data (e.g. exchange rates, interest rates and commodity prices) are easily available and not subject to measurement error. In contrast, real estate forecasters are faced with substantial hindsight uncertainty. Hendry and Clements (2003, 303) identify two fundamental sources of forecast uncertainty stating that ìall econometric models are mis-specified, and all economies have been subject to unanticipated shiftsî. This paper focuses on the contribution of data uncertainty to model mis-specification and consequent forecast uncertainty. Using data provided by three major real estate advisory firms, we investigate the level and pattern of variation in the measurement of historic real estate values and market indicators for the main European office centres. We investigate the ways in which the choice of historic time series can influence: i. model specification, ii. estimation of the coefficients of the explanatory terms and iii. the level of forecast disagreement.
|Demand for University Student Housing: An Empirical Analysis." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
This paper provides insight to understanding the factors impacting studentís decision to live on-campus and the universityís concomitant decision to build on-campus housing. We examine the relationship between the percentage of students living on-campus and a number of factors, including school ranking, cost of off-campus living, and percentage of international and graduate students. The results indicate that there is a significant positive relationship between the percentage of students living on campus and the cost of off-campus living, school ranking, the percentage of international students, the type of school (i.e. public vs. private), the amount of on-campus security provided and the cost of tuition. The university has a choice between building a new dormitory, leasing, buying an existing building, or not providing other campus housing. We further find a relationship between the factors influencing the on-campus housing construction decision by a university and the factors influencing studentís decision to live on-campus.
|Demand vs Consumption - Analysing the Energy Certification of Buildings." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
The Directive 2002/91/EC of the European Parliament and of the Council of 16 December 2002 (Energy Performance of Buildings Directive, EPD) requires member states to introduce an energy certification in order to reduce energy consumption in buildings. This new directive should help reveal saving potentials in real estate in order to achieve the aim of the Kyoto Protocol. It will surely set off an impulse for energy efficient restructuring of buildings. The transparency concerning energy consumption of buildings will inevitably apply to all property transactions and lease prices of buildings. In some EU member states the question of how the benchmark for heating energy should be calculated is being discussed: On the one hand it is possible to calculate the theoretic demand for energy by using physical and geographical characteristics of buildings. On the other hand it is possible to determine real energy consumption by collecting the annual demand for heating energy. The comparison of both approaches shows that the results differ fundamentally in many cases - differences of over 60% can be observed. In face of the fact that the two approaches lead to totally different results, this ìgapî is analysed in this contribution. Therefore, the annual heating energy consumption of 50 buildings was collected. Simultaneously the demand-orientated calculation was carried out. Based on deductive hypothesis testing, influencing factors like habits of tenants, micro location factors or physical building attributes were analysed to identify systematic differences between the demand-orientated and the consumption-orientated approaches.
|Demographic Change and the Demand for Housing: British Evidence." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|Determinants of Land Prices in Istanbul." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Istanbul is the largest city in Turkey and occupies a very strategic location between Asia and Europe, thus it has a very dynamic real estate market. The 1980s witnessed multi-centre development of the city with construction of peripheral highways and globalization playing an important role in the changes to the real estate market. This paper investigates the factors which effected real estate tax based land prices in Istanbul in 2002. Regression analysis is used for the investigation. According to the results of the analysis, the variables are ranked with respect to their importance as: Building coverage ratio, distance to the station, floor area ratio, distance to the sea shore, distance to the CBD, net population density, distance to the sub-centre, distance to industry and distance to the hospitals. The results of the study can be useful for the real estate investors, urban planners, tax assessors and policy makers. Investigation of the factors which effect land prices by the use of a time series analysis is suggested for further research.|
|Determinants of Shopping Center Rents in Istanbul." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Istanbul is the greatest metropolitan city of Turkey and since the first shopping centre in Istanbul (1988), the number of shopping centres rapidly increased. Today, there are 127 shopping centres in Turkey and 41 of them are in Istanbul. Also, among the 100 shopping centres which have been planning in Turkey, the 45 of them are in Istanbul and 35 of them are still under construction (AMPD, 2007). In this context, this study investigates the spatial distribution of shopping centres and rent values in the metropolitan city of Istanbul, Turkey. By this way, we aimed to find out the determinants of shopping centre rents which cause to differences in the city. For this purpose, the standard multiple linear regression procedure is used and the variables for the rent determinants are chosen according to literature review. The results indicate the shopping centresí rent determinants for Istanbul city. Thus, the spatial distribution of shopping centres with different rent values also will show the urban dynamics of the city. These findings can be helpful to developers, investors, and policy makers in dealing with this issue.|
|Determination of the Value of Property Investments by Means of the Performance Potential and Risk-Return Improvement Ratio." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||One point of criticism regarding the use of the standard deviation as a measure for risk is that it considers all deviations from the mean return level as risk factors. In this manner, positive deviations are also considered as risks, while actually these deviations offer opportunities. These opportunities must be taken into account throughout the investment decision process. Consequently, development of an effective Potential ratio is considered essential. The Upside Potential ratio of Sortino does not suffice, because it is based on the Minimal Accepted Return (MAR), which has no direct relation with the set targets for the management involved, i.e. the Target Return or T(R). For that reason, the Performance Potential ratio has been developed, which provides an outline of out-performing returns. Nevertheless, the full extent of investment performance is still not comprised completely with this analysis. After all, the balance between risk and return is the starting point of every investment. The added value of an investment is linked to the specific risk-return profile. Consider the following case, two investment options with more or less the same return, but with a different risk level. The investment option with the lowest risk level is preferred and adds more value. Therefore performance is not always a matter of higher returns. The Return/Risk Improvement ratio has been developed to enhance the insight into the added value of an investment. This paper describes the theoretical framework on which the two ratios are based and presents and explains the newly developed ratios.|
|Developer Activity on Housing Markets in Poland." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In article author concentrates on the housing situation in Poland and the importance of developers in this sector. Presently developers are very important investor on residential real estate market. But very often their service is far from professionalism. Especially that the demand on apartments is the supply over. So that presenting the popular model of developer activity on the polish market is the main purpose of article.|
|Developerís Perceptions of the Market, the Market Players and Market Factors." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Literature has identified over 100 variables that determine property prices, against a predominant belief that major property price determinants are ìlocation, location, locationî. Behavioural school of thought in valuation believes that practitioners / academics should reflect market behaviour, but there is little research into how market players perceive those factors. This research investigates developersí perceptions of the market, the market factors and the market players. Findings come from 27 in-depth interviews of professionals representing 21 developers in the immature Beijing market and mature Hong Kong market. It reveals location, social class, economy and distance to transport are common major price determinants to the developers from both mature and immature markets, while in total 48 factors are suggested as the top 5 price determinants. One significant finding is that developers consider factors in groups under broad-term that not only include various factors but have differing definitions between developers. Over 20 board-term factors are suggested to constitute the term location, including nearly all financial, environmental and property factors; raising the question of whether developers have given too broad a definition to location. This questions developersí belief that professionals share same opinions. Unexpected factors are revealed as Hong Kong developers believe their reputation is a major price determinant and they have great influence on the market, price and owners; while Beijing developers believe owners are immature, have no opinions of their own but have opinions come from developers; showing a different yet similar common confidence that might not be supported by sales phenomenon.|
|Development of an Office Rent Prediction Model for Istanbul." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Research on hedonic office rent prediction is well established and numerous regression models have developed by various researchers. Proposed regression models incorporate linear or log-linear solution procedures or, in some research work, both. Mostly, comparisons between linear and log-linear models indicate a slight improvement in the explanatory powers of the log-linear representation, though the improvements are rather trivial [1, 2]. Some models prefer change in rent, as the dependent variable, while others specify the rent value itself, by making use of asking rent, contract rent or effective rent data. The sample data is, asking rents, as they may be obtained from ads or real estate firm reports, cannot produce reliable results. Instead, the use of contract rent, or even more appropriately, the use of effective contract rent, considering the leasing terms and concessions, is imperative for modelling more accurate rent predictions [3, 4, and 5]. However this necessity brings about the difficulty in obtaining sufficient undisclosed contract data from real estate firms . The aim of this paper is to examine problem with constructing an office rent prediction model for Istanbul. For this purpose, a proposed regression model will be constructed with using contract data and asking data between 2000-2006. The proposed models will also incorporate the linear and log-linear solution and will investigate a whole range of parameters, classified as econometric, contract, building and location. The study was conducted as part of research for developing a viable office rent prediction model for Istanbul.|
|Devising Pricing Models for Social Rented Housing: Comparing Experiences in Northern Ireland and Scotland." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Social housing in the UK is under increasing pressure to reform its archaic pricing systems that provide tenants with below market rents but in an incoherent and often ad hoc and unsystematic manner. English social housing is now well into a long term experiment to provide both convergence and a national rent structure. Scotland is now undertaking a thorough-going review as is the case in Northern Ireland. The process of reform is one fraught with difficulty. The paper looks at two detailed case studies: Glasgow Housing Association, the largest RSL in the UK; and the very different circumstances prevailing in Northern Ireland. The paper is organised as follows. The first main section looks at the policy context and asks where these pressures for reform have come from? The section also briefly reviews recent policy research in this area. The second section asks what principles might shape rent reform in the social sector. The third main section focuses on Northern Ireland. How are rents set across the province; what are the growing internal and external pressures for reform? What types of reform have been considered and why has the favoured version emerged and what are its strengths and weaknesses? The penultimate section looks in detail at rent restructuring in Glasgow as a result of a transfer pledge made by Glasgow Housing Association. It asks the same questions but notes the very different circumstances applying in Glasgow. The final section concludes the paper by asking what wider lessons emerge from the case studies.|
|Dimensions of Value Creation in Real Estate Development." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
The traditional method of developing existing office buildings has been to make improvements through renovations and refurbishments. If the focus is merely on improving the office buildings through technological changes many cost-effective and important ways of adding value are overlooked. On the other hand, understanding what the end-user organizations and individuals value in the premises helps real estate development actors in carrying out well-targeted development projects and hence achieving improved user-satisfaction. The aim of this paper is to present the perceived value adding elements in office building environment as observed by the end-user. The basic insight into the phenomenon was acquired though a literary review, which was followed by 20 in-depth interviews in 15 organizations. After analyzing the results, a model for tenant value creation was created. The interviews revealed seven dimensions along which the end-users value their premises: location; services; technical and financial functionality; image factors; tenant mix; customer relationship factors; and space related issues. These may be further divided into second order attributes, as is done in the paper. The model will increase the understanding of real estate property owners and developers on value creation and in developing new and existing properties to suit ever better to the customer demands.
|Distribution of Local House Prices in Istanbul: Interaction between Public Investments and Urban Regeneration." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
In this paper the factors that are affecting the local house market in the sub districts of Istanbul metropolitan area are studied. 5 sub-districts that surrounds the historical peninsula around the Golden Horn selected in order to examine the house price distribution that are mostly surrounded by regenerated public spaces. 20 years ago Istanbul metropolitan municipality started to decentralise the industrial areas around the Golden Horn. Public investments on the decentralisation and environmental cleaning processes cost more than 650 Million $ on last 10 years. Data collected from the local real estate brokers and Internet listing services. The findings are slightly significant in the housing attributes than to the surrounding amenities. In the historical parts values are highly affected by UNESCO conservation projects and foreign buyers that lift up the market without any significance on our model; like proximity to public open space, water bodies or green spaces. Housing values are affected mostly by age and proximity to conservation sites. Model also explains price difference between the shorelines of Golden Horn. Docks and Military Bases occupy larger proportion on the northern parts of study area surrounded by illegal settlements. Istanbul Metropolitan Municipality plan to start a new PPP Urban Regeneration Projects in our study area. Findings of our research suggests and supports the location of regeneration areas could provide benefits to citizens and perform better tax income revenue to the municipality as well.
|Distribution of Owner-Occupiers Housing Wealth, Debt and Interest Expenditure Ratios as Financial Soundness Indicators." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The dramatic increases in Danish housing prices from 2003 to 2006 cannot be explained satisfactorily by ìfundamentalsî but only by using special bubble criteria. The paper presents a topical analysis of the financial stability of owner-occupiers in the nation with the highest household debt/GDP, highest total liabilities/net wealth and highest mortgage debt/net non-financial wealth ratios among 15 OECD countries using micro data for the Danish owner-occupier families. A primary objective of the paper is to use of the distribution of tax statistics at the micro level to analyze the owner-occupiersí capital structure and interest payments. In a financial soundness perspective macro data are of limited importance as express only total and average changes. Distributional data at the micro level, formed at the family (household) level, are important for recognizing changes in the financial soundness of the nation. The data are used to estimate different important financial indicators. The result is that the financial soundness of Danish owner-occupiers, measured as net liability housing wealth ratios, has not improved since the owner-occupation crisis in the years 1987-1993. Furthermore, their housing wealth/income and net liability/income ratios have increased since 1993 just as in the other OECD countries; on the contrary, net interest expenditure/income ratios have been reduced in a before-tax but not in an after-tax perspective. The substantial heterogeneity of the families is considerably reduced by adjusting for age as a proxy for the life cycle. Moreover, the income variation is also reduced considerably within the age group.|
|Diversification in UK Property Portfolios." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
The issue of diversification in direct real estate investment portfolios has been one of the most widely studied topics in academic and practitioner literature. Most work, however, has been done using mean returns and risks for broad market segments as inputs asset allocation models, or in a few cases using data from small sets of individual properties. This paper reports results from a comprehensive testing of asset allocation modelling drawing on records of 10,000+ UK properties tracked by Investment Property Databank. It provides for the first time robust estimates of the diversification gains attainable given return, risk and cross-correlations across individual properties actually available to fund managers. The discussion of results covers implications for the number of assets and amount of money needed to construct ìbalancedî portfolios by direct investment, or via indirect specialist vehicles.
|Do Current Yields Represent Fair Value?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper assesses the current level of yields across the UK property sectors. It discusses some of the macroeconomic issues that have impacted on yield pricing in recent years and assesses future economic prospects. It highlights some of the dynamics to be considered when pricing or forecasting yields in todayís market. Utilising the basic dividend growth model approach, it analyses the growth in actual rent passing, as opposed to estimated rental value growth, to suggest whether certain property types may be mis-priced at the present time. It also extends this analysis to the current pricing of property company shares.|
|Do Investors Actually Gain from a Lower Auction Price for Foreclosed Properties." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Numerous studies have shown that the auction price of foreclosed properties is significantly lower than that if sold in a normal market. A recent study on Taipei real estate market suggests a figure of 17.2% to 20% for this price difference. Other studies also repeatedly point out the very high proportion of investors in bidding for the foreclosed properties. The two phenomena put together raise an ignored but we believe an interesting question- does the lower auction price provide investors an opportunity to earn a higher profit than investing in the normal properties? Most attention has been paid to the price difference at the time when properties are auctioned, but little attention to its consequences after auction. Investors will after all sell those auctioned properties later in a normal market. Datasets of property sales both in auction and normal markets are utilized. Properties that were auctioned and later sold in the normal market are identified, along with properties that were sold twice in the normal market during the record period. In view of the investment nature of foreclosed properties, the redecoration costs and relevant legal expenses before resale are considered. We find that the rate of return in investing between foreclosed and normal properties is different but only marginally, at around 2.5%. This result seems to be in conflict with the widespread view that investment on foreclosed properties often commands a substantial higher profit due to their lower price.|
|Do Real Estate Loans Affect Economic Activity?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Real estate, especially housing, has an important share in the nationís wealth. For example, real estate constitutes 48.8% of total wealth in the world in 1991. Moreover, housing construction and its financing are two important factors that affect economic development in developed and developing countries. Although the mortgage system has been developing in the 1980s and 1990s in the developing economies, the impact of mortgage credits on the economy has been ignored in the literature. The only study by Erbas and Nothaft (2005), analyzes how mortgage credits affect Mexican and Turkish economies with simulation analysis by using the U.S. housing and mortgage market parameters. They find that mortgage loans will not affect the economic growth over ten year period and explain this finding with crowing out effect. In this paper, we try to close this gap in the literature and study the impact of real estate loans on economic development at province level in Turkey. Considering the unavailability of mortgage financing in Turkey, banks play a major role in growth by providing funds to households and businesses that need financing to purchase real estate. In the analysis, economic development at the province level is measured by several variables, including the GDP growth rate, the new construction of residential buildings and commercial buildings, and rents. The unavailability of house value index restricts us to estimate the impact of these loans on house values. The sample covers 67 provinces in Turkey and the period between 1990 and 2006 is analyzed.
|Does the Diversification Benefit of Real Estate Stocks Change over Time: An International Analysis." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper studies the time variation of the correlation between real estate stocks and the stock market and the implications for portfolio management. Monthly correlation series are estimated from daily returns for 14 American, Asian, and European countries/areas over 1990 to 2005 and strong evidence is found that the correlations vary across time. We also find that the correlation significantly relates to financial market conditionsñreturns and volatility in real estate, stock and bond marketsñand that the correlation is predictable. Based on analysis in the mean-variance framework, we show that the economic well-being of investors from taking into account the time varying correlation is affected significantly.|
|Dutch Local Governmentís Property Portfolios." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The ROZ/IPD Property index is established in 1994 to publicize an independent index on directly held real estate in the Netherlands. Since 2006 the ROZ Property index measures the characteristics on local government owned real estate in the Netherlands. The ROZ municipal benchmark measures characteristics on the portfolio size and expenses and income, in 8 large cities. Local government real estate portfolios consists out of buildings like town halls, schools, theatres, fire stations, community and sports centres. An outdated survey indicate a total value of Ä 30 to Ä 50 billion for the whole public sector real estate portfolio. The Dutch Statistical Office also carried out a survey on the Dutch balance sheets of municipalities and determined the book value of municipal owned buildings Ä 9,5 billion at the end of 2002. However, the book value isnít based on market value. The authors carried out a survey on the size of the municipalities real estate portfolios. The survey is based on three different approaches. The first is a literature review based on the annual reports of municipalities. Secondly an inquiry held by the ROZ jointly with Vastgoedmarkt, a Dutch Real Estate Journal. The last approach is more detailed information from the participants of the ROZ Real Estate Benchmark for municipalities. The paper will give an indication of the total real estate portfolios by size (area) and value. If possible the total universe will be split down by type of building and type of use by the local government.|
|Economical and Social Prepayment Models for Residential Mortgages in the Netherlands." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Accurate prepayment models are critical to the valuation of MBS (mortgage backed securities). They also play an important role in the efficient hedging of interest rate risk associated with mortgage funding. We have developed prepayment models using logistic regression for Dutch mortgage loans. We distinguish two types of prepayment: economical prepayment (prepayment without selling the house) and social prepayment (prepayment with selling the house). Prepayment caused by default is included into social prepayment. Using more than 100,000 loan parts and more than 3 million data observations between March 1999 and December 2005, the prepayment probabilities are estimated on an individual loan part level. In the chosen data period, the interest rate dropped to a historical low level not seen since 1960. The models have been validated by backtesting them against historical CPR (constant prepayment rate). The prepayment behaviour in the Netherlands shows unique characteristics comparing to other countries due to the existence of prepayment penalty and tax deduction on penalty interest in the Netherlands. In addition to refinancing incentive, market interest rate, LTV (loan to value), age of borrower, seasoning, seasonality and property type, we found that months-in-arrear and time-on-job are important predictors for prepayment. Furthermore, variables influence the two types of prepayment in distinctive ways and have different relative importance for the two types of prepayments. A previous reported December effect is found to be only relevant to economical prepayment while the time-on-job variable is found to be only relevant to social prepayment.|
|Elderly Households and Housing Wealth in Japan." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Households, during their lifecycle, make important decisions regarding their housing consumption. Lifecycle consumption theory suggests that these choices in relation to tenure, size and location of the dwelling unit are made in response to the lifetime wealth maximization by households suggesting a dynamic process whereby householdsí would continually evaluate their housing consumption and investment. More than 85% households over 65 years of age in Japan are homeowners. How elderly households treat housing equity and what they intend to do with this wealth, is an important policy and welfare question. The literature on the extent of adjustment in housing wealth of elderly homeowners in Japan is limited. Most of the research to date finds that elderly homeowners do not appear to be tapping into their housing equity to support non-housing consumption in retirement probably because elderly households have objectives other than non-housing consumption while investing in housing. Research from other countries (like UK) indicates that most elderly households are rationally willing to use some of their lifetime assets to meet needs in later life. There is, however, only limited evidence of systematic withdrawal of housing equity to supplement non-housing consumption. This raises an important policy question: If households do not tap into their housing equity to support their non-housing consumption post retirement, are policies aimed at facilitating homeownership achieving desired welfare outcomes? It is crucial, therefore, to understand the housing investment objectives and housing consumption behaviour of elderly households in Japan.|
|Employing Ethical Analysis to Residential Rental Regulation: How Fair are they for all Parties Involved?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Regulation of the residential real estate market is in general enacted to provide social benefits to the tenant, who is perceived to be the weaker partner in the landlord-tenant relationship. Academic literature has been able to document and quantify economic gains for the tenants. An alternative way of looking at this is offered by applying the growing body of ethical reasoning literature. This provides us with a better sense of the pros and cons of the regulation beyond pure economic gains. Two types of regulation in three different countries (Germany, the Netherlands, and the USA) will be analyzed using this methodology. The two types of regulation are Rent Control and Housing Quality Standards. The outcome of the analysis results in a new way of evaluating Rent Control and Housing Quality Standards and this will lead to recommendations regarding their usefulness in the three aforementioned countries.
|Empty Housing and Disurbanisation in Wallonia." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The aim of the communication is to precise why the issue of empty housing is a serious problem in the main cities of Wallonia (Belgium) and why an increasing number of urban owners are neglecting their property assets. This reflection is based on three surveys where various kinds of owners have been questioned: a first group of people representative of all the owners active on the residential locative market, a second group based on a sample of residential empty buildings and a third group based on a sample of commercial buildings with empty floors. The surveys analysis demonstrates that the empty housing situation is related to problems deeply rooted in the Belgian society. In this country, council housing for rent is scarce and home-ownership has always been the pillar of the housing policy. In the last decades, this persistent policy has contributed to a decrease of the profitability of the rental investments as it has economically contracted the locative market to the weakest populations. The widening of the local housing markets and the intense residential suburbanisation are other key explanations of the empty housing problems. Indeed, in a context of demographic stagnation, such evolutions have generated urban depopulation as well as investment apprehensions for the central urban fabrics.|
|Engineering the Housing Policy for Political and Economic Sustainability: A Case Study of Low Cost Housing Policy in Malaysia." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Please enter your abstract text here.The commitment of the state to housing policy has been argued as sometimes goes beyond the generality of the need for decent housing for all households. Pluralist theories of housing provision have popularised the view that housing policy is a relatively straightforward response to the needs of consumers. Current thinking suggests a stronger focus should be based upon understanding of the developmental dialectic between three factors i.e., economic, social and political. Drawing upon a case study of low cost housing policy in Malaysia, this study seeks to examine the evolution of the policy formulated by the state at the national level. It demonstrates that housing policy in Malaysia has undergone a cycle of changes from provider to enabler and back to provider in meeting the housing needs of low income people. However, the state now plays both the role as enabler and provider but with overwhelming political influence on this social policy. Yet, the key aim of this housing policy for low income people remains the same i.e., to achieve the political stability among the multi-ethnic society and to maintain the countryís economic growth. The study concludes that the implementation of housing policy in Malaysia presents a remarkable example of authoritative political influence. Housing in Malaysia serves as part of the governmentís political strategy to achieve both social and economic goals. Thus, this witnessed the state as using low cost housing as a mean of achieving social cohesion and revitalising the economic condition of the country.|
|Engineering the Housing Policy for Political and Economic Sustainability: A Case Study of Low Cost Housing Policy in Malaysia." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|Estimating the Distributional Effects of Imputed Rents in Greece." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The usual practice in empirical distributional studies is to use distributions of disposable income. However, a householdís command over resources is determined not only by its spending power over commodities it can buy but also on resources available to the household members either in the form of private non-cash incomes or in the form of in-kind welfare state provisions. In most societies, the most important private non-cash income component is the imputed rent enjoyed by the home-owning households. From this point of view, Greece is a very interesting case. Not only is home ownership widespread, but it is also most prevalent amongst the poorest segments of the population, mainly in the form of outright home-ownership. The present paper derives estimates of imputed rents using two alternative approaches (based, respectively, on hedonic regression techniques and self-assessed imputed rents) and analyses the distributional effects of the inclusion of these estimates in the concept of resources used in distributional analysis, using the micro-data of the 2004/5 Household Budget Survey.. The results show that, irrespective of the imputation method employed, measured inequality and poverty decline markedly after the inclusion of imputed rents in the concept of resources. The main group whose relative position improves after the change in the concept of resources are the elderly, while the ìlosersî can be found mostly amongst households with children.|
|Estonian Housing Market Analysis: Quantitative and Qualitative Insights." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Fast development of the real estate market and impacts of crashes and real estate value on the economy and consumption, and ways how to mitigate them have become topical issues in Estonia since the residential as well as housing loans markets were, as a result a fast economic growth, overheated by 2006. The article seeks to analyse development of the housing market in Estonia, evaluate the current situation and prognosticate potential development trends using both quantitative and quantitative methods of research. Economic indicators that show the possibility of a boom in the Estonian housing market are fast economic and loan volume growth, liberal loan conditions, taking larger credit risks, low interest rates, overpriced properties and positive expectations for the future. To evaluate the market situation we have used analysis of market trends, regression and SWOT analyses. The qualitative analysis for the study of property markets focuses on actors' perceptions and understandings of property values. The (potential) residents' preferences are assessed against their capacity to construct individual strategies based on the synthesis of multifaceted species of capital at their disposal obtained in fields of their conduct. The qualitative study enables to observe individuals' experiences over extended periods of time by combining the analysis with processes at the market and in the society at large.
|European Infrastructure Markets: The Emergence of an Alternative Asset Class." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||"Infrastructure Investing has emerged to be one of most significant and fastest growing asset classes of recent years. Although a number of investors, including the Australian and Canadian pension funds, have been investing in infrastructure for many years, it is only over the past two years or so that there has been more widespread interest in infrastructure investing. This surge of interest has occurred for two distinct reasons. First, attractive market fundamentals, with strong demand for the use of infrastructure assets, and a general shortage of supply. At the same time many governments across the world face financial difficulties which are forcing them to raise infrastructure capital from the private-sector. Second, the behavior of the asset class, or the performance characteristics of infrastructure assets themselves. Such assets tend to have a high yield, steady growth in income and a low volatility. They also tend to have a very long duration, generally with a minimum of 30 years, but often 60 to 100 years, and they provide significant diversification benefits relative to bond and equity assets. Although the asset class has grown dramatically in recent years, it remains ""emergent"" and, as such, is subject to the risks and opportunities associated with the emergence of any new asset class. Investors starting to become familiar with the asset class need to understand precisely what it is and how it behaves. Is it, for instance, more like fixed income, private equity, real estate, or none of these? It is within this context that this paper explores a number of dimensions associated with the emergence of the asset class within Europe. Key issues include precise definitions of the types of asset that comprise infrastructure, the existing and potential size of the market, behavior characteristics and assessments of the relative attractiveness of the market across Europe."|
|Evaluating Operating Characteristics in Commercial Real Estate Lease Contracts: Gross Lease vs. Net Lease." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|Examining Affordability Issues in Northern Ireland." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
The paper explores the relationship between house price growth, income levels, investor activity and the effects on entrants to the housing market. It concentrates on the area of first time buyers to the market and the issues of affordability which are now becoming increasingly apparent in Northern Ireland. House prices in Northern Ireland have experienced unprecedented growth particularly in the last 12 months (37% in 2006 alone according to the University of Ulster Quarterly House Price Index, March 2007). The rates of increase are currently amongst the highest in Europe when considering the RICS European Housing Review 2007 published in February 2007. This paper examines the impact on first time buyers where the pressure is most acute as the average income in Northern Ireland is historically lower than the rest of the UK and has not increased substantially despite rising house prices. Using twenty years of house price data from the Quarterly House Price Index and mortgage data for first time buyers from CML the effects on entrants to the market are analysed. The increasing affordability issue is examined in more depth using an affordability model developed by the University of Ulster in association with the Northern Ireland Housing Executive. The results from the affordability index are presented using GIS mapping techniques to show the geographical areas where the effects of affordability are most apparent. The paper concludes with a summary of possible policy recommendations to alleviate the pressure currently experienced by first time buyer market.
|Exogeneities and Endogeneities of Urban Commercial Property Yield Cycles." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
The paper begins by reviewing a stylised urban commercial property yield cycle. It then considers endogenous and particularly exogenous influences on the cycle including the role of macroeconomic factors such as interest rate changes and the property investment climate. A central issue that is addressed is the efficiency of the commercial property market in responding to fundamental variables. The focus of the research is on the differentials between cities in terms of yield levels and cycles. The empirical analysis compares the experience of the major provincial cities of the UK based on yields, equivalent yields and trends in investment funding from the IPD database.
|Exploring Property Securitisation in Malaysia." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|Factorial Design Analysis of the Relative Efficiency of Ghana Land Policies." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Land markets are imperfect; they are often intervened by their host governments using the instrument of laws and regulations with the view, either to cure their imperfections or to prop them up. These policies may or may not yield the expected dividend. The trouble is, because the dividend yields of policies are not readily obvious, it is critical for them to be carefully gauged and regularly monitored. For the developing world, owing particularly to the generally high levels of noises in the available data, there are often fundamental difficulties in appraising the actual magnitude of dividends associated with particular property related policies. And very little studies are occurring in this area. Factorial designed statistical technique is employed in this study to analyse empirical data gathered in Ghana with the view to gauging the benefits that existing land policies in that country are respectively yielding. What emerges from this study is that, all the different strands of land policies in Ghana are producing positive benefits. The magnitude and significance of these benefits however vary with the policy type. Government compulsory purchase and compensation policies that have been used to acquire lands and distributed to private developers were found to be the most beneficial. The relatively high infrastructural investments and professional management in the areas so affected by this particular genre of land policy possibly account for this considerable benefits they are yielding. Land titling laws and regulations, in contrast, were found, rather surprisingly, to be offering insignificant benefits. Also, interactions among the various types of policies were unexpectedly found to be offering no real benefits at all with the effect that formalising land rights under more than one land policy type leads necessarily to extra costs without associated extra benefits. These results draw attention to the need to rethink the existing land titling arrangements in particular and governmentís infrastructure investments in general with the view to introducing a more beneficial alternative for the formalisation of land rights as well as balanced platform for all policies to contribute their optimal.
|Financial Development and Property Valuation." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper models the agency theoretic perspective of risk averse investors and financiers (under symmetric information) to demonstrate the increase in pareto-efficiency as financial architecture advances from a bank to capital markets. This is attributed to the reduction in agency costs leading to an increase in the value of property. Our results predict that an optimal financial system will configure itself skewed towards capital markets irrespective of the source of its origination (from specialized banking system or universal banking system). We also rationalize the co-existence of banks and capital markets in a well-developed financial system.|
|Financial Sector Development in Macedonia as a County in Transition." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||One of the three priority areas that FYR Macedonia needs to focus on, is to sustain reforms in the public enterprise, financial, and public sectors. FYR Macedonia is making steady progress in its transition towards a market economy, but political uncertainty, slow structural reforms, bureaucracy and corruption are preventing stronger growth potential. After a decade of transition, maintaining financial stability and reducing the vulnerability of the financial system remain key challenge. On the other hand, structural reforms have already contributed to an improved business environment, but further actions will enhance competitiveness and help prepare for eventual EU accession. The country's progress in the accession process would depend on individual performance. The European Commission has urged Western Balkan countries to take significant measures that would bring them closer, where Macedonia was criticized for a slowdown in reforms. This paper will analyze the banking sector in FYROM compared to that of advanced industrial countries. While banks have evolved gradually to become the main source of external finance for the real economy, securities markets have grown at a more modest place. The improvements in the areas of formal exchanges and transparency will be analyzed. The comparison between the development of the fixed income markets and the stock market is given for Macedonia. Since progress in pension reforms and rapid growth of the insurance markets in Macedonia can support the development of domestic institutional investors in the coming years, in this paper are elaborated some suggestion methods for public sector downsizing in Macedonia.|
|Forecasting Regional House Prices - An Approach Based on Structural Modelling of Housing Markets." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||We propose forecasts of regional and local house prices based on estimates of a structural model that has several distinctive features. First, we model not only the endogenous relationship between housing prices and demand, but also microeconomic features of the market ñ in particular, the nature of search, bargaining and price formation. In other words, the wedge between supply and demand is identified by variation in degree-of-overpricing, over both space and time. Therefore, our model incorporates three structural relationships ñ for housing prices, demand and degree-of-overpricing. Second, we incorporate an additional feature of the microeconomic structure of housing markets, by including time on the market as a leading indicator for prices. Third, we allow for arbitrary spatial interaction between house prices in different regions as well as complete spatial heterogeneity in the description of the structural relationships. The above three features are in addition to explicit consideration of temporal variation in housing prices, which is standard in previous work. We use our model to forecast housing prices across boroughs in Greater London and counties in the North West of England. Our empirical exercise demonstrates the strength of the approach in terms of improved forecast performance.|
|Frame Independence and the Property Professionals." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Over the last half a century, capital market theory has developed to help investors and their advisers to quantify risk. Traditional capital market theories, such as Capital Asset Pricing Model (CAPM), have been based on the premise that investors act rationally. In terms of the definition of rationality, existing studies suggest that rational people would behave consistently and coherently under different circumstances or their behaviours do not relevant to frames, i.e. the form used to describe a decision question (Shefrin 2002). However, psychologists have identified that individualís choices often stray from rational decisions and can, therefore, be inconsistent under different situations (Tversky & Kahneman 1981). In an effort to understand individualsí decision making processes especially under different circumstances of uncertainty, several descriptive models, such as the prospect theory, have been introduced. Based on a research study using the same type of questions presented in Kahneman & Tversky (1979), questionnaires for this paper were sent out to property professionals in both China and the UK in 2005. With a relatively high response rate, this study was able to investigate the level of frame dependence among property professionals in both countries, and further identify whether there was any significant difference between experiences in an emerging market as opposed to a mature market context. The paper also examines factors that might cause such effects if they exist. The findings from this paper thus may help to provide a better understanding of property professionalsí decision making processes in both China and the UK.|
|Function-Form-Finance-Future." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|Geographical Externalities of Local Real Estate Markets." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Despite the recent trend of offshoring branches of UK services industry to remote locations urban theory has yet to enlist a theory of industrial rents that formally takes the properties of substitution between locations into account. This study elaborates on the Fujita, Krugman and Venables model in order to develop theoretical foundations for a pricing theory of contemporary commercial real estate markets, with a focus on offices and services industry which can also extend to include industrial space. It proposes a model that considers location pricing and allocation in an effort to increase the spatial organisation of multinational services firms. Commercial property markets are assumed to be imperfect substitutes in firmsí decision to locate, which on their own turn provide access to labour of differentiated quality. This paper develops empirical evidence in support of a competitive open market price framework of a Dizit-Stiglitz imperfect substitution of alternative office locations in the production of national services industry. It employs panel data methods for the simultaneous estimation of local market rent structures, which include a complex of spillover effects from all other parts of the national market. The estimations are based on time series for 48 UK office centres of locally adjusted estimates of tenancy demand and supply proxies and considers influences from the entity of UK regions and include a variety of deterministic and stochastic structural variability tests. The estimated structures are subjected to multivariate co-integration tests for an examination of the stability of structural differentials.|
|German Open Ended Funds: Was there a Valuation Problem?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||At the end of 2005 German open ended funds were subject to heavy withdrawals and a number of funds either suspended dealings or were supported by the parent bank. Fund units are priced by the fund managers based on the asset values of the properties in the funds. The main selling platform of those units is based on a clear commitment to offer a product that has very low risk and volatility. The BVI (German Open Ended Fund representative body) ìsalesî document is sub titled ìAn investment in solid valueî and is packed full of statements like ìa low volatility alternativeî, ìsteady growth in value at a low riskî and ìstable profitability and the absence of wrenching moves in market priceî. How is that low volatility policy delivered within a property fund? One suspicion is that the valuations in Germany are subject to even greater smoothing than in other parts of the world and this paper explores that suspicion and develops a set of questions for the German real estate valuation industry to address.|
|Globalisation or Localisation of Property Consultants Services." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||International property consultants are essential part of the developing trans-national property market. One of the fields institutional evolution of the property markets is seen are structural changes and scope modification of professional services. There are questions about globalization or/and globalisation of services offered by property consultants - if the international companies adjust to local needs and customs or introduce only international standards. How effective are their strategies? There are also questions about the local playersí institutional changes as results of global players influence. Author tries to evaluate the maturity and standardization of services on the Polish property market.|
|Green Values and the UK Residential Market: The Impact of Energy Performance Certificates on Property Value." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In recent years there has been increased speculation amongst the UK surveying profession regarding the link that exists between market value and environmental performance. Practitioners and academics alike have discussed a positive relationship between value and energy efficiency, alongside other green practices. However, there is a lack of strong evidence that quantifies the financial gain that can be achieved from high environmental performance within the residential sector. Recent research undertaken at the College of Estate Management has shown that investment in eco-friendly innovation could be fully justified since house purchasers have demonstrated a willingness to pay more for energy efficient homes, some by as much as £15,000. From June 2007 the energy rating will become an essential part of the house buying process, via the introduction of Energy Performance Certificates (EPCs) with the ideal that the homeowner is presented with enough information to decide on cost-effective solutions when investing in energy efficiency. As an EPC will disclose new environmental information related to the house purchase before a sale is agreed, property values will undoubtedly be questioned. The research aims to examine how information presented in EPCs will impact upon householder attitudes towards environmental performance. The survey results and statistical analyses presented here indicate that EPCs are likely to provide a useful mechanism for improving the environmental performance of UK residential property. Its introduction is likely to raise public awareness to residential energy saving. Evidence also suggests a positive relationship between energy efficient ratings and attainable market values.|
|Growth Strategies in the Dutch Real Estate Industry." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The European real estate industry is still growing fast, both in terms of employment and output. This rapid expansion takes place with new concepts but also in new areas, often across borders. The aim of this paper is to examine the growth strategies of three types of players on the Dutch real estate market, i.e. developers, investors and brokers. Ansoff (1973) distinguishes four growth strategies: market penetration, diversification, market development and product development. One of the main questions to be answered in this paper is what growth strategy (if any) is chosen by the key players in the Dutch real estate sector. More importantly, what are the key drivers behind the chosen growth strategies and how are these strategies implemented. In order to answer these and other questions, per category board members of the 15 largest Dutch companies have been interviewed. The results of these interviews have been analyzed and linked to some important background characteristics of the companies involved, such as portfolio composition, market focus and type of affiliation. One of the results of our analysis is that internationalization is the dominant growth strategy of the investors whereas among developers and brokers no dominant strategy was found.|
|Hedonic Office Rent Indices for Finnish Real Estate Markets." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Hedonic regression models are commonly used tools in attempt to remove inherent heterogeneity in real estate market data. Our main objective is to develop hedonic time-series indices to be used in forecasting rent development in major Finnish regional markets. Another objective is to capture the development of appreciation for each explanatory variable in order to use that information to produce qualitative trend projections.Indices are constructed for 7 economic regions, which include 9 biggest cities in Finland. New leases data from KTI Finland is being used for modelling. The data comprises of c. 17,000 observations for period Sepí94-Augí06. Helsinki Metropolitan Area (HMA) is by far the biggest regional submarket with 11,000 observations. GIS software is being used for producing additional spatial variables. First approach is to create micro-indices for HMA and then theyíre aggregated into index for whole HMA region. Additionally cross-sectional location indices are created for HMA regional sub-markets. Cross-sectional coefficients are then used in foresight processes in order to extrapolate qualitative trends for real estate markets. Second approach is to create indices for each economic region both separately and by using panel estimation. Indices are tested for robustness and consistency.
|Herding and Measurement Problems Proposition of Dynamic Measure." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
The topic of interest in this study is herding behaviour in the stock market. We propose a new herd measure which is based on the cross-sectional dispersion of beta to detect the prevalence of herding phenomenon towards the market. The application of our new measure to TUNEDEX and BVMT indexes- as representatives of the Tunisian market- provide better results than those obtained by the cross-sectional stock priceís models developed by Christie and Huang (1995), Chang, Cheng and Khorana (2000) and Hwang and Salmon (2001, 2004). Moreover our findings show that the herd phenomenon consists of three essential components: constant term of herding which signals the existence of the phenomenon whatever the market conditions, the error term relative to the anticipations of the investors concerning the totality of assets, and the third component highlights that the current herding depends on the previous one.
|High Rise Ability." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In the Netherlands, the number of realized high-rise projects is limited. Research on investment costs of high-rise buildings is project based. The presented research is the integration and evaluation of known (European) researches into a cost model. The objective is to get a detailed estimation of building costs of high-rise office buildings in the initiative and early design phase, while limiting the number of required design parameters to those known at the initiative phase. The research started with a state-of-the-art literature review, and by interviewing experts working on high-rise projects and cost modelling. This resulted in an integrated model, which is now being evaluated in practice. The outcome will be a model that can be used for future design and construction initiatives. However, building costs are only part of the steering attributes for the developer. Their importance is relative to other conditions. The earning capacity of high rise office buildings is, compared to low-rise, bound to efficiency of floor plans: the ratio of gross floor area versus lettable floor area. At the same time costs of land are also very important. As is the case for rent levels the land costs are most of all depending on the location. These influences lead to designs in which high quality is needed in order to meet the high costs. Due to national legislation and other local influences the outcome is bound to the Dutch context. Extension to a European level can make local influences explicit and adaptable to other countries.|
|Home Ownership Risk, Market Conditions and Atypicality: An Analysis of Microdata." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In the UK, around 55% of householdsí net worth is in housing. More than 70% of households in the UK own a house and holding such a large amount of undiversified real asset poses risk. It is not always that a house would appreciate in value, though a housing investment has been recognised as a good hedge against inflation. This paper assesses the risks associated with housing investment by performing following tasks: (i) analyse the association of return on individual housing with sub-market return, overall Aberdeen housing return and Scotland housing return, (ii) analyse the role of atypicality of individual properties and bargaining power of sellers on housing returns, (iii) estimate the probability of loss and (iv) the role of bargaining power of sellers and atypicaility of properties in determining probability of loss. The data used for the analysis is the Aberdeen Solicitor and Property Centre (ASPC) transaction data for the period 1984 to 2002.|
|Hotel Investments in Germany: Influencing Factors on the Transaction of Hotel Properties." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In the last few years the investing activity of real estate investors in German hotel properties has increased strongly and the total financial value of transaction will probably rise in the future as well. Traditionally the German hotel investment market was dominated by domestic investors and fixed lease agreements between investors and operators. Especially due to the engagement of the foreign real estate investors variable contracts, like variable lease agreements or management contracts, are getting usual in the market. This makes a hotel to a more risky investment for the investors than in the past. Subsequently it is getting more and more important for investors to identify the most important factors influencing the transaction of hotel properties. The author conducted a study to identify the most important influencing factors and their corresponding weight on the transaction of 4-star-hotels in Germany. Therefore hotel consultants with appropriate transaction experience were interviewed. For the survey the software Expert Choice was applied. The software is based on the Analytic Hierarchy Process, a special value benefit analysis.|
|Housing Tenure and Residential Mobility in England." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper examines differences in the extent and patterns of residential mobility in England across tenures and implications of these differences for policy. Of particular relevance is the extent to which the high proportion of social housing results in lower overall mobility, which may have negative impact on the economy. Equally there may be costs of immobility relating to household choice and satisfaction as well as to the effective use of the stock and neighbourhood sustainability. In this paper Survey of English Housing data are used to examine the patterns and trends in residential mobility across different tenures. Logistic Regression Models identify factors which differentiate recent movers from those who want to move but have not been able to do so. The evidence shows that mobility is heavily concentrated among private tenants and those living with family or friend. Social tenants are actually more mobile than owner-occupiers, although their moves are generally short distance. Long distance moves are more likely to be by young and professional or skilled workers and take place for job related reasons. Short distance movers are more likely to be about improved quality of life, housing and amenity in the new neighbourhood. Social tenant movers are particularly likely to benefit from improved services in their new neighbourhood. The evidence suggests that the social costs of relative immobility in the social sector are quite low and that potential social benefits of mobility are associated with neighbourhood dynamics arising from ensuring greater social mix.|
|Housing Wealth, Credit Conditions and Consumption." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
There is widespread disagreement about the role of housing wealth in explaining consumption. Much of the empirical literature is marred by poor controls for the common drivers of house prices and consumption, including income, income growth expectations, interest rates, credit supply conditions, other assets and indicators of income uncertainty (such as changes in the unemployment rate). For instance, while the easing of credit supply conditions is usually followed by a house price boom, failure to control for the direct effect of credit liberalization on consumption can over-estimate the effect of housing wealth or collateral on consumption. This paper suggests an empirical model grounded in theory with more complete controls than hitherto used. It is applied to modeling consumption in the UK and South Africa. Both countries experienced substantial credit market liberalization and rising consumption to income ratios. However, South Africaís circumstances in the 1980s prevented an asset price boom, thus allowing the illumination of the direct role of credit liberalization. The paper incorporates methodological improvements in the measurement of credit conditions, and also clarifies the multi-faceted effects of credit liberalization on consumption.
|Housing, Time-to-Bulid and the Business Cycle." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper analyses the time-to-built (gestation lag) technology on a multi-sector growth model that includes a housing sector. Gestation lags are explicitly modelled for the real estate sector (developers) so as to investigate the dynamics of property investments as well as the dynamics of business cycles. I have two .nal-goods sectors in my model. A consumption (and business investment) good is produced in the .rst sector. The second sector produces residential structures which are combined with newly available land to establish the real estate good. I incorporate a time-to-built technology in the property sector to better account for stylized facts such as (i) Property investment co-moves with investment in business capital. (ii) Investment in real estate is twice as volatile as business investment. (iii) Residential investment is leading the business cycle. I calibrate the model to US and German data and use standard linearization methods to solve the model near the steady state. I use policy functions that were obtained from numerical solutions to perform Monte Carlo experiments to approximate moments of the system. I then compare the moments of artificial data with the moments of real world date. My initial results indicate that construction lags in the property sector helps to better match the stylized facts mentioned above.|
|Impact of Residential Mobility on Household Commuting Behaviour." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|Incentive Structures for Co-Operation Between the Public and Private Sector in Urban Development Contexts." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper aims to identify incentive structures for co-operations between the public and private sector in urban development as well as the economic reasons for such structures. The current and at the moment intense discussions taking place in Germany regarding Public Private Partnership (PPP) rotate around the areas of traffic construction as well as structural engineering projects. However there exist a great number of fields of operation for PPP. One study, from the German Institute of Urban Affairs, shows us great growth potential in the areas of urban development respectively urban renewal. In this context, PPP will be analysed from the point of view of new institutional economics as well as the game theory, this will help reveal uncertainties as well as identify problems in the complexity of building cooperation and through the design of incentive structures help to reduce and overcome same. Due to the complex social and economic problems within the scope of urban development, singular instance solutions will not lead to the desired result on the contrary what is required is more of an integrated strategically approach. This paper pursues the question, which elements of classic real estate development and the guideline and coordinating operations of the PPP Task Forces can and should be used in urban development respectively what modifications are required on said elements. Because of the essential implementation of economically and socially intricate projects in urban development, it is necessary to establish PPP as a central aspect in the discussion about administrative reform.|
|Indoor Air Quality and Property Productivity." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Environmental concerns have firmly put sustainable development on the research agenda of those who deal with the built environment. Many researchers have found that poor IAQ has negative impact on tenant-landlord relationships, workersí health and productivity, and building elements and systems. This implies that IAQ affects property productivity (i.e. rental/capital value of properties). While several people laud the virtues of sustainable development, most of them hesitate to commit themselves financially to sustainable development because of the uncertainty about the cost effectiveness of such developments. Therefore the paper is aimed at ascertaining the impact of IAQ on office rentals and the productivity of an industrial property in Singapore. The paper centres on office properties in the central business district of Singapore and an industrial property in a Science park in Singapore. The methodology includes the hedonic model, experiment (through measurement of IAQ levels) and two surveys (one each for the office and industrial properties respectively). The results of the hedonic model show a positive relationship, albeit statistically insignificant, between office rental value and IAQ. This is supported by the result of the survey. However, a cost benefit analysis reveals that investing in good IAQ is cost-effective and thus, increases the value of the properties in the sample.|
|Inequity of Property Assessment within and Between Valuation Zones." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||A sound property tax is based upon an accurate and fair valuation system. The property valuation system in Taiwan has over these years evolved into a sophisticated one. Accuracy and equity of this system has however up to date seldom been under scrutiny. To accomplish a speedy valuation for taxation purposes, all properties in Taiwan are assigned into a number of valuation zones. Properties in the same zone are similar in their value, site size and neighbourhood amenities. This paper sets up to examine the performance of property assessment in a selected group of valuation zones in Taipei City. The emphasis is placed upon the vertical inequity within a valuation zone and horizontal inequity among valuation zones. We also employ a well-established equalization procedure, Vertical Horizontal Appraisal Adjustment System, to correct for the identified inequity. In addition, the spatial element of assessment inequity is also looked into. Zones where properties are over- or under- assessed are often found to locate close to each other. Clustering of unfairly-assessed valuation zones itself represents another type of assessment inequity. We finally propose a number of potential explanations for the observed assessment inequity and possible cures.|
|Inflation Hedging Properties of REITs in Inflationary Economies An Application of a Markov Regime Switching Model." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
In this paper, we study the inflation-hedging properties of investments in REITs in Turkey between December 1999 and December 2006. Two main factors motivate the study. First, compared to their counterparts in developed capital markets, Turkish REITs have some important tax incentives as well as flexibility in managing their portfolios. In particular, the law, which governs Turkish REITs, does not impose any dividend payout requirements on them. Second, the Turkish economy provides a rare and good opportunity to test the hedging behaviour of real estate stocks in periods of both high and moderate inflation rates. Turkey has experienced a persistent hyperinflation between late 1970s and the early years of the 21st century, when the inflation has started to change its course for a rather rapidly, suddenly and substantially falling one. We examine the inflation-hedging effectiveness of Turkish REITs under measures of expected and unexpected inflation. Unlike the existing literature which commonly uses Fama Schwert (1977), Fama Gibbons (1982, 1984), and ARMA models to measure expected inflation, we use the Markov regime-switching model proposed by Hamilton (1989) to modelling inflation rate in Turkey. We use a non-linear filter proposed by Hamilton (1989) and then, we employ a smoothing algorithm developed by Kim (1994). Currently we are performing the empirical analysis and expect to report the results in our presentation. We believe this paper will offer the first evidence whether and how a REITís dividend policy may play a role in its inflation-hedging properties under two starkly different inflationary processes.
|Influencing Factors on the Performance of Direct Property Investments." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Unlike for other asset classes the performance of direct property has been researched only to a small extent, especially as single-property data are hardly available. This study for the first time investigates the performance of direct property in Germany based on single-property data. Aims of the research are the identification of relevant market and property related performance factors, which lead to conclusions about the optimal allocation and selection of property investments. Due to the known heterogeneity of property it is obvious that this can best be achieved through investigating single-property data, as in this study. Cross-sectional analyses include indicators for market attraction and for the relative market positioning of each property. Among these are socio-economic data, property market data and geo-coded single-property data. Performance data and tenancy data were obtained from IPD. The investigated sample comprises 662 office properties, 184 retail properties and 585 residential properties, all of which were geo-coded and equipped with distance and driving times to local POI. Regression analyses were conducted with Total Return, Net Income Return and Capital Growth as independent variables. The results show that differences in the performance to a large extent depend on property management abilities. Micro-location particularly affects the performance of retail properties while socio-economic macro-location factors especially matter to residential properties. The valuation yield, as expected, is of major importance for property performance. Capital Growth and Net Income Return are largely affected by a different set of factors, while deviations between Total Returns mainly stem from the Capital Growth component.
|Information and Communication Technology: A Survey among Appraisers and Valuerís in Malaysia." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper attempts to investigate the current implementation of ICT tools within the appraisers and valuers profession in Malaysia. Despite tremendous developments of ICT in Malaysia, it begets the question as to how far it has been used in the real estate profession especially among valuers and appraisers in the country. This survey encompasses each of ICT applications; hardware namely equipment and facilities; software namely equipment, operating systems, office productivity, software packages; ICT applications namely applications used in handling daily chores, document handling systems and personal experiences and opinions. In this survey, a posting and web based questionnaire was used to capture field data of ICT implementation. It is envisaged that this survey would yield beneficial results for the betterment of the real estate industry in Malaysia at large. Furthermore, it is felt that it can contribute significantly towards generating quality valuation reports by the aforesaid professional practitioners.|
|Information Inefficiencies in Real Estate Markets." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Since Eugene Famaís seminal contribution in 1970 it is a hotly debated question whether and in how far financial markets are information efficient and what lessons should be drawn for investment strategies. By now it seems established that capital market efficiency in its strong form does not hold. The weak and half strong form of information efficiency, however, is rarely questioned anymore. While it is also established that currency markets are the most efficient, real estate markets are said to be less efficient. We discuss the reasons for the low level of information efficiency on real estate markets. Using GDP and CPI expectations from Consensus Economics Surveys we are able to decompose fundamental determinants of rental growth in expected and unexpected parts. Using standard economic techniques we find that both components add to the explanation of rental growth in a sample of European countries. Furthermore, for some countries it can be shown that lagged GDP and CPI surprises are significant determinants of rental growth. Our results conflict with the assumption of information efficiency on real estate markets in its strong and half strong version.|
|Information Sources and Advice used by Small Business Tenants When Leasing Commercial Property." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Many small businesses lease commercial premises. The terms of a lease can affect the ability of the business to grow and adapt and have an impact on cashflow. Ensuring that they have the information with which to negotiate the best terms is part of the UK government policy focus on small businesses. Such information is most effectively disseminated through the sources of advice that small businesses use during the leasing process, therefore these sources of advice need identifying. An interview survey of small business tenants who have recently taken leases suggests that small businesses do not receive or seek out advice during the leasing process, nor do they see the need to be better informed. The only formal professional input is from solicitors but this is not until after the main commercial terms have been agreed. The landlordsí letting agents play a key, but ambiguous, role in providing information as well as advice. These results suggest that the only effective way of disseminating information could be via the letting agents, the very people with whom the tenants are negotiating.|
|Institutional Investments in Real Estate: Insights from Germany." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The paper analyses the characteristics of institutional investments in the German real estate market and refers to the study of ìInstitutional Investments in Real Estateî presented by Michael Truebestein and Wolfgang Schaefers at the 12th Annual European Real Estate Society Conference in Dublin (June 2005). In addition, the study identifies and evaluates current aspects and future trends in institutional investments in real estate ñ taking into account the specific institutional governance structure in Germany. More specifically, the paper will analyse general insights into the investment behaviour and investment criteria of German and international institutional investors in real estate as well as the volume of real estate investments. Thereafter, the study focuses on the behaviour of German institutional investors and their tendency to convert direct real estate assets into indirect real estate investments. This possible conversion is evaluated in regards to new investment forms such as real estate private equity/opportunity funds and fund of funds products as well as the likely introduction of real estate investment trusts (REITs) in Germany. In particular, the study focuses on the investment objectives in the different real estate markets as well as on the risk objectives and preferred vehicles and strategies for future investments in real estate. Finally the study will determine the importance of different valuation methods for real estate assets and conclude with a general outlook of future strategies and tendencies in institutional investments in real estate. The results of the paper are based on an empirical study, which will be performed by the author with questionnaires on 150 companies concerning real estate investment companies, insurance companies, pension funds and provision plan companies. Key words: institutional investments, real estate investments, investment behaviour|
|Integration of Sustainability Aspects into Property Valuation." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The actors in the fields of construction/building industry and real estate, banking and insurance as well as fund/stock management intensively deal with the subject what consequence a stronger consideration of principles of sustainable development will have on each particular core business. These actors furthermore deal with the question of how they can integrate sustainability aspects into their existing methods, tools and strategies. The paper illustrates the relevance of enhancing methods for property valuation and property rating for raising the demand for sustainable buildings. It describes the activities of several initiatives and projects, amongst others the Green Building Finance Consortiums, the UNEP Sustainable Building Construction Initiative (SBCI) and the UNEP FI Property Working Group (PWG), regarding the description of economic consequences of ecological benefits and the integration of sustainability aspects into property valuation methods. In the following the paper introduces and discusses a concept for describing and assessing an integrated building performance. Presently the basis for reporting and evaluating particularly the ecological quality of buildings is provided by European and international standardisation organisations. Most of these activities have not been noticed by the groups mentioned above up to now. Finally the paper presents existing methods and tools for assessing the contribution of buildings to a sustainable development, as well as some trends and problems which are identifiable at the moment in this field.|
|Interaction between the Housing Market and Civil Engineering Performance." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The aim of the paper is to investigate the relationship between the housing market and civil engineering performance. The problem of interaction of these two fields of activity is of great importance because of sudden and profound changes on the Polish housing market. The increasing demand generated by the rise in accessibility of mortgages and the inflow of finances from European Union initialized a wide range of new investment performances. An immense impact on the success of started and planned activities has a situation in the civil engineering sector. It implies that a description of the civil engineering sector is becoming an essential source of knowledge that would help to understand the essence of occurring processes in the housing sector. The view on the housing market by the prism of civil engineering enterprise could bear fruit especially in early diagnosis of coming changes on the real estate market.|
|Investigating the Assessment of Property Risk in Australian Commercial Mortgage Backed Securities." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In this paper we investigate the assessment of credit risk in Australian Commercial Mortgage-Backed Securities (CMBS). Adequate assessment of credit risk is critical to the success of CMBS issues. We follow Adair and Hutchinsonís (2005) segmentation of property risk in investigating how it has been assessed in Australian CMBSs which are primarily backed by direct property assets. Our analysis shows that investment quality risk, covenant strength risk, and depreciation and obsolescence risk are all well assessed in structuring CMBSs which is largely attributable to the dominance of issuers by Listed Property Trusts who legally have to report their activities and underlying collateral performance to regulatory regimes such as ASX/ASIC and their equity investors.|
|Investigation of Housing Price Levels in Urban Parts Having Different Life Quality Levels. The Case of Istanbul." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This study examines housing price differences in urban areas having different life quality levels. To display changing housing price levels in those urban parts is defined as the first aim of the study. In relation with this, to put forth whether there is always linear and positive correlation between housing price levels and quality life levels of the area where housing unit locates is the second aim of the study. The case area of the study is Istanbul which is the most populated and has the highest economic and service production level in Turkey. The household questionnaire was done by Greater Istanbul Municipality in between 2005 and 2006 and average housing price values in Istanbul are the data sources. To determine the life quality levels in counties is the first step. After grouping variables under five main fraction such as social, economic, and built environment and accessibility and satisfaction from the public services, principal component analysis is utilized for getting life quality levels in counties. Due to empirical analysis results, 32 counties is ranked. As related to the mentioned aim, housing price levels in those ranked counties is discussed in detail. Is housing price level convenience with life quality level? does Increasing life quality level also mean increasing housing price level? Is there a possibility that lower life quality level areas have higher housing price levels or vice versa? Do housing price levels significantly differ in different life quality level areas? All those questions response are got by applying independent sample test.|
|Investing in Europe: Diversification and Currency Issues in Cross-Border Real Estate Investment for UK Investors." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper looks at the optimal holding of European real estate for a UK institutional investor. It starts by making a set of assumptions about risk, correlations, and expected returns for UK and continental European real estate based on a combination of historical analysis and projection. Using these inputs, we compute risks, returns and Sharpe ratios for a range of blends of UK and non-UK exposure under a number of exchange rate assumptions. Although the case for investing in Europe is unclear when exchange rates are ignored, adding currencies produces quite different results. Whether hedged or unhedged, it is shown that under a conservative set of assumptions an investor could substantially improve their risk-adjusted return by taking significant exposure to continental Europe. The results also suggest that partial, rather than full, hedging of currency risk is likely to be the most efficient strategy. This material has been previously published as a white paper by JPMorgan Asset Management.|
|Investor Decision Making and Property Attributes." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|Is Residential Real Estate a Viable Asset Class for Institutional Investors?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The advent of futures contracts on residential housing indices has enabled the creation of synthetic investment positions in residential property, an asset class previously unattainable for institutional investors. To determine whether institutional investors have an incentive to utilize this method to invest in residential real estate, I examine the investment characteristics of the S&P/Case-Shiller Composite Home Price Index over the period 1987-2006. These investment characteristics will determine whether the futures contracts gain usage amongst investors and therefore, at least in part, whether these derivative contracts are successful in the long term. The results show that residential real estate is a low risk/low return type of investment, with risk adjusted performance lower than that of commercial real estate, but higher than most other asset classes. Residential real estate exhibits negative correlations with all other asset classes, making it excellent for diversification purposes. Within mean-variance efficient portfolios, residential property has large weightings in conservative up to mid-risk tolerance portfolios. More aggressive investors would not optimally invest in residential, although they would have a significant weighting on commercial property. However, if considered within an Asset Liability Management framework for a defined benefit pension plan, residential real estate plays little role in the optimal portfolio for any risk tolerance, although commercial real estate does. Overall, residential real estate has investment characteristics quite distinct from the commercial real estate in which institutions have traditionally invested, although the final weight in an optimal portfolio depends upon the objective and risk tolerance of the investor.|
|Is Taxation Waning Property Investment?: A Case Study." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Over the past quarter of a century, the level of taxation and other government charges from property has grown in Australia. The growth of property prices has led to more taxes, however the growth of income to the government has grown at a faster rate, partly because the rates have not been adjusted and because there have been new taxes introduced which impact on property. Early settlement in Australia had ìexcise and customs forms of taxesî, but no taxation on property whatsoever. Now, nearly two hundred years later there are over ten ways of taxing property in Australia, with property becoming a good source of revenue for all sectors of government. The revised NSW (state) budget papers for the 2005-2006 financial years showed that property continues to be the largest sector for tax revenue for the state government. Total property taxation accounted for 33.9% or $5,362 million of total State Government revenue ($15.8 billion). This included Stamp Duty ($3,100 million), Land Tax ($1,737 million), Mortgage Duty ($320 million), Leases ($68 million), Parking Space levy ($44 million) and the abolished Vendor Transfer Duty ($93million). In addition to state taxes, property in Australia is also subject to taxation, levies and fees in several ways at the local and federal government levels. This paper will trace the growth of taxation, levies and charges on property and show how the established and new taxes impact on property investment in Australia.|
|Knowledge Creation and Social Networks in the Built Environment." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Knowledge resides in many teams/parties who are involved in the creation or production process. Large engineering organisations within the industry play an important role for their contribution to innovation and creation of new knowledge. Firms driven by the desire to earn economic rent are motivated to devise effective strategies which enable them to increase their profitability as well as market share. ìCorporate entrepreneurs face a unique challenge in the development of opportunities with established firmsÖthey should take advantage of existing capabilities as well as stretch the organisation beyond the boundaries of its core competencesî (Floyd and Wooldridge, 1999). Sharing of knowledge can help reduce uncertainty arising form random acts of nature and unpredictable changes in consumerís preferences (Buckley and Carter, 2003). How companies generate knowledge and how they implement it through process reflects the tension between countervailing forces that, ìon the one hand, spark inventions, and on the other, introduce the structure that transforms those inventions into marketable productsî (Brown and Duguid, 2001). In this paper we offer the results of a study on the role of social networks in the creation of knowledge in the built environment. Our methodology enables us to reveal the structure and strength of organisational internal communication links and their role in the exchange, sharing and accumulation of knowledge in a built environment consultancy company. Using a social network analysis framework we demonstrate the extent of the inter and intra organisational knowledge exchange and their importance in the knowledge creation processes.|
|Land Acquisition in Development Projects: Investment Value and Risk." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Housing market in Poland is by far the most active field of real estate market in Poland in recent two years. The housing boom in polish major cities, similar in some aspects to situation in Ireland and Spain, brings several questions concerning market efficiency, and possible speculative bubble. In article we focus on land acquisition problem in development projects. We analyze relations between prices, market and investment values of land suitable for multifamily housing projects in major polish cities during 2004-2006 period. Later we discuss the problem of market efficiency of polish housing market and sources of potential investment risk. The empirical part of the paper is based on analysis of notary acts of market transaction of land suitable for development in Krakow. Other sources of data comprise the official statistics of housing development cost gathered by Central Statistical Office in Poland, and housing transaction data from primary market in Krakow. The main purpose of analysis is an assessment of efficiency and risk of typical housing projects.|
|Land Speculation and Local Development Process." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Most of the literature on property markets is written as though it were the very paradigm of a neoclassical perfect market. In practice, the market is imperfect, properties are heterogeneous, information and transaction costs are high. Land speculation is an intrinsic characteristic of land markets, but it is often omitted in economic approaches and is rarely placed in its geographical context. In this paper, we explore the spatial, economic and financial dimensions of land speculation by considering the existing planning regulations, land tenure system, and land transactions during a 30-year period, within the geographical context of a tourist agglomeration development process on the island of Rhodes, Greece. The main source of reliable quantitative data on land transactions is the local cadastre and the Property Tax Office. Land transactions in sub-periods of spatial development of the study area are presented on maps. Within the context of increasing demand for accommodation means, bank financing practices and State subsidies system favoured the creation of new enterprises, the accommodation supply and consequently the increase of land demand. Land property structures, urban planning regulations and land policy determined land supply. All the above factors have produced synergies that encouraged land speculation with ambivalent effects on local real estate markets, tourist activities and space.|
|Leasing Industrial Property in Northeast Ohio." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This study examines the leasing of industrial property in the Cleveland and Akron regions of Northeast Ohio for the time period 2000-2005. Ohio is a traditional manufacturing state that must cope with obsolete buildings, reduced manufacturing employment, reduced population, environmental contamination, and existing zoning for industrial property. It is similar to many other parts of the industrial world that have been affected by changes in the location of manufacturing jobs and reflects local responses to the new economic reality. The relative limited academic research on the industrial property market indicates that the market is segmented by use that includes manufacturing, warehouse, and flex buildings. Demand for this type of property is affected by access to transportation, proximity to end users or the source of goods for production, and population size. Additional drivers that have been found significant are infrastructure, government incentives, natural cost advantages, and size of buildings. Rental rates appear to be influenced by building characteristics, specific amenities of the area, and local supply and demand. An analysis of the two regions allows an overview of the changes in industrial property use, vacancies, and average rental rates. Results of this study indicate that vacancy rates are higher in Akron (11.18%) than Cleveland (10.71%), but rents are not statistically different for the general category of industrial property. When the data is divided into warehouse and flex space, there is a statistical difference in vacancy rates and rents by region and size of building.|
|Levels of Residential Satisfaction with Housing Location in Neighbourhoods South of Johannesburg Central Business District." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This study reports the results of a survey on current levels of satisfaction with housing location and also with desired housing location. The survey was conducted in Johannesburg, South Africa. Over 320 in-person interviews were performed by students at Wits University on African respondents in Soweto and nearby areas. The survey examines the satisfaction levels with current housing location characteristics for things of daily importance to the household, i.e. food shopping, schools, transportation versus ideal housing location in regards to the same items. Despite the perceived issues with the location of these residential areas in the Johannesburg property market, the most important aspect residents are satisfied with was the transportation and location to work place followed closely by safety. Regarding the worse thing about their current location the highest percentage was regarding crime. Regression models will be used to study the reasons given for moving with regards to the satisfaction levels and the identified best and worse regarding their current housing and also to their ideal housing situation.|
|Local House Price Index for Istanbul Metropolitan Area." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The purpose of this paper has been to explore the nature of housing price differences in Istanbul Metropolitan Area. Recent studies on urban housing markets have widely accepted the existence and significance of housing sub-markets. This study investigates spatial distribution of housing prices in Istanbul by taking into consideration property and sub-market characteristics to identify localized factors. Conditions to construct a robust Local House Price Index for Istanbul also examined. Hedonic Regression models employed using ordinary least squares (OLS) to estimate house price. Especially in Istanbul house prices are highly spatially correlated the weight matrix approach employed to handle this problem. Findings of this study suggests that recently introduced Mortgage Law in Turkish banking system strongly needs House Price Indices (HPI) to be studied deeply in different market segments sub-market characteristics and local factors.|
|Local Office Return Determination in Europe." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This study examines office return determinants for major European office centers during the period 1990-2006. Our main hypothesis is that while the demand for office space is regarded as derived demand, the state of the local economy explains more about local office markets than the state of the aggregate national economy. By means of a dynamic panel data model we test whether the local nature of office markets makes a model based on national data biased if the determinants of office returns do not move in the same direction for each of the individual local office markets when compared to the national aggregate. We test this pivotal shift/share problem in a distinct way by employing a unique dataset which includes disaggregated, or city level, and national variables. This dataset allows us to include local data, supplemented with national data for variables which are purely national in nature to study local office markets and makes a comparison with previous studies based on national level data possible. The data used in this study include real estate data by Jones Lang LaSalle and European economic variables based on Eurostat data. Besides panel data analysis on the total sample of cities we also test for sub-samples based on office market size and economic circumstances. Our results provide insight into the applicability of aggregate data for office market research versus the application of more cumbersome and less frequently available local data.|
|Locations of State Interventions: an Optimization Model. Effects on the Housing Market." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||European local government policies have placed a strong emphasis on urban regeneration and existing buildings accommodation, especially in the nearest CBU degraded urban areas, not only to improve urban environments, but also to relieve the great demand of housing in growing cities. This paper examines the effect of a State Intervention by an Index which measures the efficiency that the development of a regeneration project carried out by the public sector, in close partnership with the property development industry, has on the housing market. The hedonic price function is seen as the most suitable methodology to isolate its effect, which is supposed to be uniform all along the intervention area. For this, we built two optimal investment location models: a pre-intervention one and a post-intervention one. The first one, before the intervention, allows determining in which places and at which cost would be better to carry out the intervention to get the desired effect, provided that we are able to minimize the variability of the investment influences as well as to concentrate investment in some places. The second one, after the intervention, allows judging the actions carried out and fixing the best amount of investment for each place in which the intervention took place so that the effects will get the most possible homogeneous distribution. Both models will assess the best performance according to the housing market and the local policies.|
|Long Run Relationships between Office Rents and the Economy in the UK." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|LPM-CAPM in Listed Property Trusts." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|Macroeconomic Prerequisites for the Housing Market in Poland." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The paper provides the characteristics of the housing market in Poland at the close of 2006. It describes specific features of that market which has been broken down into the segments of apartments and houses. Making reference to the results of a survey, the paper explains the reasons for purchasing apartments in Poland over the recent years. With the use of that information and the sales figures of apartments it formulates indexes for that market. The indexes include: waiting time for an apartment, supply of apartments to the market, the indexes include three major cities of Poland. In the second part of his paper the author forecasts growth directions of the housing sector in Poland up to 2013 on the basis of the current and future macroeconomic prerequisites of that market. The strategy of development of that market should include: the present supply of housing and the dynamics of changes, the demand for housing and the shortages of supply to that market in Poland. The discussion of the insufficient supply to the housing market in Poland should include housing aspirations of Poles. Here, we either have wishful thinking totally devoid of financial potential or aspirations that are based on the realistic assessment of current and prospective resources.|
|Market Report for Offices in the Western Austrian Federal States." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The data situation concerning the office market in the big cities of Austria (except Vienna) is non-satisfying for owners, estate agents and investors. There is no transparency in the office sector referring the cities Graz, Linz, Salzburg and Innsbruck. No data or official information exists on office space or new construction volume, supply, demand, yield or other key figures. The FH Kufstein - the Real Estate and Facility Management Department and the OVI (÷sterreichischer Verband der Immobilientreuh‰nder, www.ovi.at) - developed a revolving market report concerning the office market. The report contains the existing space, the new construction volume, the volume of new tenancy but also vacancy rates and rent levels. As a second aim trends and opportunities on the western office market are analyzed. Key question is the total office space for the analysed cities. Different methods (e.g. space per clerks and expert interviews) are used to gain this relevant information. Similar methods create all other figures.On the ERES-conference the authors present the result of the study and we are looking forward to an interesting discussion.|
|Market Value without a Market: Perspectives from Transaction Cost Theory." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The concept of market value is central to the valuation profession worldwide. Estimating market value remains the core professional activity of valuers and underpins much funding and investment decision-making. There is evidence however, that industry leaders are increasingly sceptical about the valuersí skills. The valuers themselves however still remain hugely influential in the market. This paper engages with the question why valuers remain important despite the parlous state of their craft. Using insights, provided by transaction cost theory this paper argues that in many cases market value cannot legitimately be determined. This is because market conditions necessary for its emergence as a knowable, determinate and autonomous figure or range of figures do not exist. The paper proposes an alternative view of market value which emphasises its role as a transaction cost minimising device.|
|May we Build Derivatives on the Paris Residential Market?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Real estate markets are often subject to price shocks whose amplitude may be very high. According to R. Shiller (1998), these shocks are as difficult to explain as those that affect equity or debt markets. The investors and all financial institutions are in need of hedging products or derivatives that are based on the dynamics of the underlying asset and especially on its volatility. The standard deviation, directly computed from repeat sales, overestimates this WRS index: The repeat sales method is a means of constructing real estate price indices based on a repeated observation of property transactions. PCA repeat sales index: Baroni, Barthelemy and Mokrane (2007) use real estate capital returns and compare them to other returns calculated from economic or financial variables. To get real estate returns they use repeat sales transactions and compute their corresponding returns for the economic and financial variables. Then, each real estate returns are explained by the other returns, using a linear regression. Finally the index is estimated from the factors time series.In a first section, we describe the different methodologies and consider the risk taken into account in each index. In second section we describe the dataset which contains 1,000,000 transactions leading to more than 300 000 repeat sales observations on the Paris area during the period 1973-2005. In third section, we present the results on the return and volatility robustness to revision for the two indices. We conclude on the possibility of creating derivatives on these indices.
|Mean-Variance Spanning Tests of Real Estateís Portfolio Contribution." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
This study re-examines the diversification opportunities that may arise from the inclusion of the private real estate market in a mixed-asset portfolio. The paper's two primary contributions are that firstly we examine this issue through the use of a mean-variance spanning approach rather than the analysis of conventional optimal portfolios. Secondly, we also examine the issue using the recently released MIT-NCREIF Transaction Based Index.
|Measuring the Stability of Performance by Means of the Volatility Ratio." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||It is not only the average achieved return-performance that has to meet the demanded return/risk profile of the property and the enterprise goals, but also the underlying yearly returns must reveal a relative stable picture. The reliability of the results is a good indicator for the positioning of the property in the market and the quality of the management. Additionally, it can contribute to ALM-studies and financial engineering at fund level with property derivatives. Currently, the standard deviation is used as a measure for financial risks. Previously, objections were expressed against this measure. Beside these objections, it is proven that the standard deviation is merely a measure of dispersal of returns and not one of volatility. Nevertheless, the standard deviation is generally accepted and frequently used. It is apparent that increased insight in the volatility is necessary. The development of the Volatility ratio meets that need. The starting point of this ratio is the number of years with a confined difference in return between two successive years. The Volatility ratio illustrates to what extent the performance development is stable. This paper describes the theoretical framework on which this ratio is based and presents and explains the newly developed ratio.|
|Methodology of Conducting Comparative Analyses of Local Real Estate Markets for the Purposes of Land Management." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper presents the results of a project to compare the local real estates markets in Poland, especially in Warmia and Mazury region by creating appropriate integrated indicators of these markets using statistical techniques. Such indicators will make it possible to find a similarity of different local markets and present them hierarchically. The need of such analysis comes from polish law and professional standards in area of; land management, real estates valuation, real estates market analysis. It was assessed that the useful tools in conducting comparative analyses of various local real estates markets include the procedures of statistical inference. From a good number of methods available, techniques originating from two spheres of statistic inference were selected: distribution free methods and multivariate analysis methods for analyses within the distribution free methods, it was Friedman's test (Friedman's non-parametric variance analysis) as well as Kendall's test (W. Kendall's compatibility ratio) that were selected. For analyses within the multivariate analysis methods, it was factor analysis, that were selected, which constitutes a set of statistic methods and procedures allowing for conversion of a large number of variables tested to a significantly smaller number of independent factors or main components which preserve a considerable amount of information conveyed in the primary variables. If this statistic method is applied, it is possible to reduce the number of attributes describing local real estates markets down to a few integrated indicators, which preserve their descriptive qualities, despite the reduction of variables that has taken place.|
|Micro-Spatial Analysis of Tenants within Large-Scale Retail Properties in Taiwan: A GIS Approach." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
The mixture of tenants in a large-scale retail property is not simply putting tenants together because each retailer and service provider has its own characteristics and demands in operation. The type, size, number and placement of tenants are the four key elements of tenant mix. In previous research (Yuo, T. S., Crosby, N., Lizieri, C. and McCann, P. 2003, 2004, 2005), we focused on solving the type problem of tenant mix. However, the placement issue is far more complex because it is the location and allocation of space for each tenant. In Taiwan, large-scale retail properties (over 360,000 sq ft) tend to built more vertically then those in the UK and US. The floor levels normally over 6-10 levels comparing to the UKís maximum 4 floor levels (2002). Furthermore, the competition between large department stores and shopping centres also make the distribution of floor space more flexible but increasing the difficulty in management. With the help of Geography Information System (GIS), this paper digitized four different forms of large-scale retail properties in Taiwan, 1) standard full-line department store, 2) department store enlarge to the scale of regional shopping centre (over 1 million sq ft.), 3) standard regional shopping centre, and 4) regional shopping centre but use the operation system of department stores. In this paper, several aspects of the efficiency usage for total floor space of large-scale retail properties are discussed and some spatial definition standards were also suggested.
|Modelling Dynamics of Sales in New Buildings: Moscow and Region." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper examines the issues encountered in the modelling dynamics sales of apartments during a period of realization of new building. Point is that a forecast of cash flow (income) is very important question for developers and investors. How much apartments we would sell in first month? In second one? When the last apartment will be sold? An extensive listing database of the apartments for sale has been employed to build the model describing the realization process. This database consists of about 1200 addresses of new buildings sold in 2002-2006 years in Moscow city and region. We have analyzed the dynamics of sales for these buildings to found the most suitable formulae for modelling this process. It seems that the best curves family is the so-called logistic curves, describing start, movement, and braking of a car. Of course we need to improve and modify logistic curve to reach the best fitting of the real situation. No doubt, the model does not purport to explain everything about real process on the apartment market. It has a lot of limitations: competitors on the market, changing in prices during realization, etc. But, at least, the model allows us to approximately predict the income in dependence of time. The last chapter of the paper is dedicated to the specificity of Moscow housing projects. With the help of our model we will try to explain the current strategy of new apartment sellers in Moscow city, psychology and behaviour of buyers.|
|Modelling Location Preferences of Helsinki Metropolitan Area Office and Retail Markets." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Our primary goal is to model office and retail userís preferences over various locations in greater Helsinki region. Acquired results will then later be tested with other Finnish major cities. Primary data is acquired with phone and Internet surveys for each user group. Survey respondents are selected to be those responsible of corporate/chain location decisions. Awaited number of responses is c. 100 for each group, consisting of all major retail chains and office space users. Questions are formed as multinomial statements on 9-step Likert scale and results are processed with applied AHP approach in order to come up with weight vector for qualitative variables. Weight vectors are then supposed to be concise representations of the importance of various qualitative attributes in making location decisions. The approach differs from ëtraditionalí AHP approach in a way that it uses ordinary multinomial statements instead of pair wise comparisons. Approach was selected in attempt to diminish the number of questions each respondent is expected to answer. By using acquired weight vectors it could be possible to construct a spatial preference geo-index for each submarket. The appropriate qualitative metrics that could be used for geo-indexes will be discussed more thoroughly. An attempt to verify these results with revealed preference methods ñ more specifically hedonic pricing method ñ will be made using KTI Finland rent benchmarking data and GIS-software.
|Modelling Price Volatility in the Hong Kong Property Market." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The property market in Hong Kong has been playing an essential role in the political, social and economic lives in this vibrant city. Understanding the volatility of this market is important to guide government policy making and investment decisions. Using data collected between 1986 and 2006, this paper applies GARCH models to investigate the patterns and determinants of the price volatility of residential, office and retails properties in Hong Kong. Our findings suggest that office price does not show time variation of the volatility, which makes it easier to forecast the office price in Hong Kong. ARCH(1) and AR(1)-ARCH(1) models are constructed to measure the quarterly price volatility for residential and retail properties respectively. We find retail property price has greater volatility persistence than that of the residential property. Our analysis also shows significant discrepancy among the three real estate sectors when considering the economic determinants of price volatility. The volatility in retail property price is associated with the gross value of construction work only. In contrast, the volatility in residential property price is related to wage index, consumer price index, and retail sales volume. In general the price volatility in the residential housing real estate sector is more affected by demand side, while that of the retail sector is largely influenced by supply side. In conclusion, our analysis indicates the office property market is less risky than the residential and retails real estate markets in Hong Kong, and the price volatility in these sectors are affected by different factors.|
|Modelling the Supply Side of the Housing Market." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||During the 1990s in many countries across Europe, government interference with housing supply was reduced in favour of a more market-orientated approach; i.e. private housing market agents (e.g. project developers) got the lead under the direction of local municipalities. In short, this didnít fulfilled anticipation: although housing demand remains very high, housing supply dropped to after-war lows. These contrary results indicate that our knowledge on the behaviour of different agents and dynamics of the relation between them is limited. In this paper we present the results of a model we developed in order to explain contemporary development on the Dutch housing market. In essence, the model is a disequilibrium two-sector model with supply, demand and house prices as endogenous variables. In the model, house prices are serving as the long term equilibrating force (although, house prices are assumed to be downward rigid on the short term). In the model housing supply in the owner-occupied sector is profit-driven; while housing supply in the rental sector is determined by (local) government. Finally, on the demand side, demographic, economic growth and mortgage costs (interest rates) play the decisive role. We estimated the model by using iterative three-stage-least-square procedure. The results show that both housing supply and house prices could be explained reasonably well. In turned out that housing supply during the 1990s was limited mainly because rising land prices offset the increasing in the house prices during that period; hampering (expected) profit and hence downsizing the number of newly build houses.|
|Monetary Policy and Real Estate Investment Trusts." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
This paper assesses the response of Real Estate Investment Trusts (REIT's) to unexpected changes in US monetary policy. A critical element in this study is the use of futures markets to isolate unexpected changes in the policy rate. We find a significant negative response of REIT returns to a surprise change in the policy rate. The paper then examines the potential sources behind such an observed response. We find important differences between the REIT market and the broader equity market. Intuitively the impact of monetary policy on dividend news appears to be more pronounced in the REIT case. However, the decomposition of the response to monetary shocks is largely driven by revision in expectations regarding future excess returns and these results are largely consistent with the findings for the overall stock market as reported in Bernanke & Kuttner (2005).
|Moscowís Residential Market: Opportunities and Challenges for the Years to Come." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Moscow is the largest residential market in Russia (and in Europe); with population projections from the UN suggesting that the population will continue to grow over the next decade (+2.8%). This reflects the continuation of Moscow as the dominant economic and political centre in Russia, which also offers considerable employment and leisure/social/networking opportunities, and the anticipated continued high immigration. In the early 1990s, realtors estimated that Moscowís housing market represented up to 75% of the whole turnover of the Russian housing market. The number of sales on its primary market has been steadily increasing: from 8,800 housing units p.a. in the mid-1990s to about 30,000 by 2002. And the trend has continued strongly well into 2006. Moscow residential prices saw a ìperfect stormî in 2006: individual income growth and frenzied media coverage led to an explosion in demand, while supply was constrained by heavily-regulated building regime, ill-timed government decrees and opportunistic behaviour by real estate developers. The dramatic transformations in Moscowís residential market form the primary focus of this paper. The latter explores the affordability issues emerging from the social restructuring of the city (the emergence of the new super-rich class of Moscovites) and the liberalization of the mortgage conditions (loan rates reduced and the term for mortgage repayments prolonged). The role of the Government remains key to Moscowís future growth in terms of foreign direct investment, new developments and infrastructure, market transparency, and overall investorsí confidence. Political uncertainty has been identified as the major threat to investment by the World Bank, and the upcoming elections in December 2007 is adding to the pressure. As the Government struggles to hit the right balance between a rigid legal framework and attracting foreign capital, we experience the emergence of some very interesting trends in the residential market of Moscow. Suburbanisation being one of them, as Moscovites looks for affordable housing options and quality of life outside the city centre and even the Oblast. Another key trend looks at developers being forced to differentiate themselves with greater levels of service ñ boosting the market for western-style, professionally managed housing services (for sale or rent). The objective of this paper is to look at all these trends and evaluate the attractiveness and risk of the Moscow residential market from the perspective of an investor.|
|Nature and Artifact Markets of Real Estate Value: What do the Market Accept?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
The environment of real estate value will be drawn as a space describing its four sources connected with the four components of value. Similarly we may refer the four groups of factors influencing the nature of value and also the built up of them considering market based expectations of it. In this case we try to give a broad overview of the different markers that are characterized by the two basic aspects of their essence - the nature and artifact based one. Named approach will give to us a possibility to follow a different accession to the sustainability.
|Negotiating Office Lease Contracts: From a Game-Theoretical Towards A Behavioural View." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||At its core the profitability of every tenancy agreement is determined by a negotiation about the provisions of the lease contract. A profound knowledge about the mechanisms of this strategic decision situation and the decision making behavior of the participants can help landlords, tenants and brokers to close the deal and enforce their interests against their counterparts in order to derive an optimum utility from the tenancy. The paper aims at modelling a game-theoretical framework that covers the basic mechanisms of lease contract negotiations while making allowance for relevant behavioral aspects. In this way a systematic examination of these bargaining processes is conducted and recommendations for landlords, tenants, and brokers are given. For this purpose the work initially demonstrates that tenancy contract negotiations show characteristics of a conflict with competitive as well as cooperative interests that with respect to general assumptions of game theory can be modelled, analysed and solved as a basic non-cooperative game situation. In the following a game-theoretical model is developed based on the simple bi-matrix normal form and the Rubinstein bargaining game while successively approximating real estate practice. The behavioristic model of the zone of possible agreement is integrated and several behavioral aspects of decision-making in negotiations are considered. In the course of this paper several mechanisms and interdependences of lease contract negotiations are uncovered and recommendations for landlords, tenants and brokers are derived.|
|New Methods for the Construction of a Commercial Real Estate Rating." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||"The new capital standards for financial institutions issued by the Basel Committee on Banking Supervision (""Basel II"") caused a quantum leap in the risk measurement methodology. Especially the rating systems used for estimating the probability of default of the borrowers were greatly improved. Today the leading banks have instruments in place, which are superior to the ones even their most sophisticated customers use for themselves. This leads us to the question how external and internal real estate ratings can benefit from the advances in real estate lending. In this paper we use a large sample of properties from German open-ended funds to demonstrate which methods are suitable for building a commercial real estate rating. In the first part of the paper we give an overview of the most common procedures and statistical methods for ratings. Furthermore we define criteria for an adequate rating system. In the second section the process of constructing a rating is shown on the basis of the sample data. The emphasis here is on the real estate portfolio part of the rating. The results indicate that a combination of scorecards and cash-flow models--similar to, but markedly different from the ones used in banks--fulfils all requirements and is suitable for both external and external real estate ratings. The third section addresses the transfer of our findings to external ratings of commercial real estate."|
|Office Markets and Urban Mutations in Belgium." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The office market is an interesting revelatory of territorial evolutions. In this perspective, the aim of the communication is to present how the evolutions of Belgian office markets are related to urban mutations. The Belgian situation clearly illustrates how office locations interfere with the urban hierarchy, with a very strong concentration of the office market activity in the Brussels region. Moreover, there is in Belgium a clear correlation between the position of the cities in the urban hierarchy and the size of their office stock. Even though, there are some exceptions to this general law, with weaker developments in the Walloon cities of industrial tradition and, on the opposite, larger stocks in the Flemish cities of Leuven and Mechelen. More than the local economic development, it is in fact the progressive integration of those cities in the Brussels metropolitan dynamics which explain this situation. Since the eighties, important office parks have been developed in the Belgian outskirts. Our treatments have showed that this evolution leads to a relative decline of the city centres office function. For instance, cadastral data on the rental values of the whole country have showed that the representation of the city centres of the main urban regions have decreased from 60% in 1993 to 53% in 2003. For Brussels, it is estimated that 15% of the stock is now positioned in out-of-town locations.|
|Office Rent Determination and the Market Cycle: Evidence from a Hedonic Panel Analysis." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||It has been frequently observed that office markets are subject to high volatility in rents and vacancy levels, thus exposing real estate investors to considerable risk regarding expected future income streams. This paper analyzes the determinants of office rents and their variability over time and across submarkets in order to gain additional empirical insights into the rent price formation process. To this end, a hedonic regression framework is presented which yields estimates of rent determinants at various phases of the market cycle using time series data from New York City. A number of location-specific and property-specific variables are identified using the hedonic regression model. Next, tests for structural change are conducted which confirm that rent determinants differ significantly according to the position in the market cycle. Cross-sectional tests for structural change also reveal that rent determinants differ significantly in various areas and submarkets so that no support of a unified rental pricing scheme (i.e. the 'law of one price') is found in the empirical case study. Investigating differences in building quality classes, the estimates show that locational and building-specific quality features are better predictors of rental rates in Class A office buildings than in the lower-grade Class B and C buildings. This is indicative of a higher sensitivity of rental rates in the highly competitive segment of Class A buildings to variations in quality features. Support is also found for the existence of price convergence and spillover effects towards the peak of the market cycle.|
|Office Space Supply Restrictions in Britain: The Political Economy of Market Revenge." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Office space in Britain is the most expensive in the world. Even in a struggling, medium sized city, like Birmingham, costs are more than 40 percent higher than in Manhattan although construction costs half as much. Taken together with research showing a significant negative net welfare effect of planning constraints in the residential sector, regulatory constraints are the obvious explanation. To investigate this we first explore the meaning of Glaeser et alís (2005) Regulatory Tax (RT) and then estimate values for 14 British office locations. Even on the most conservative assumptions, this shows a very substantial cost of regulation in Britain - orders of magnitude greater than estimates for Manhattan condominiums. Having values going back more than 40 years allows us to investigate the political economy of the regulatory restrictions. Britain has a fiscal disincentive for communities to permit commercial development since business rates are a national tax. In all but two locations, residents control development and their main incentive to allow development is (fear of) unemployment. The useful exceptions are the City of London and Docklands, controlled by business interests, and, in the Cityís case, with a unique fiscal incentive to allow development. The City is also the only office location in Britain where the RT value has fallen over time, seemingly related to an explicit loosening of planning restrictiveness in the 1980s triggered by competition from other locations. Exploiting the cross sectional panel data allows us to test these hypotheses and the results provide strong support.|
|On the Social Optimality of Residential Segregation. An Evolutionary Agent-Based Analysis." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||An Evolutionary In the literature on segregation there are two important results about the social optimality of this phenomenon: either segregation is the social optimum or full integration is the social optimum. These opposite results depend upon the individuals' preferences about their neighbours. If there is a population having prejudices against another one then the former applies, but if these prejudices do not exist segregation is a bad news for society. In the case of segregated populations facing difficulties because of this condition, literature has proposed to pay compensating transfers. However, the segregated population's difficulties would affect the society as a whole. For instance, if segregation has as a consequence ghettos of low-skilled labourers, the complete society productivity can diminish, and consequently, the individuals' consumption too. Here an extension of the Schelling's segregation model, considering production, is proposed to research on this issue. The main result is that under the presence of prejudiced groups and social cost due to segregation neither the full segregation nor full integration are social optima but a positive level of segregation lying between.|
|Open Ended Funds in Germany: Crisis and the Incoming Reform." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Open ended funds run into a serious crisis towards the end of 2004. Several reasons came together: The construction of the vehicle, the week German property market, discussion on valuation of the property, and the ongoing discussion on the introduction of REITs in Germany. Shortly after the presentation of the German REIT-regime by the German government, the German Ministry of Finance presented a proposal for a reform of the open ended funds in January, 2007. In a first section this paper analyses the reasons for the crisis of German open ended funds. Based on this analysis, the main possibilities of solving the liquidity problems of open ended funds are described in a second section. With these analytic instruments the proposal of German ministry of finance is in a third section described and evaluated.|
|Opportunities and Constraints on the Development of Real Estate Taxation in Transitional Countries." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||A number of transitional economies are in the process of developing real estate taxation based upon the market values of properties. This paper examines the issues involved in achieving this. The use of market values in taxation requires the existence of valuation standards based upon market value, systems of land registration that enable an accurate fiscal cadastre to be compiled, data about market values, and valuers trained in the use of open market methods of valuation. The paper examines the development of market value real estate taxation in Hungary and Romania and the valuation infrastructure available to support it. It compares these countries with Greece, which has also recently moved towards market value real estate taxes and the UK. It draws upon research undertaken for a Leonardo da Vinci project. This suggests that the use of European and International Valuation Standards has brought about greater harmonisation of valuation standards and methods between the four countries but that significant differences remain in the education and training of valuers and these may be an important constraint on the development of market value real estate taxation. The participants in the LdV project are CRFB Bucharest, ANEVAR, Academia de Studii Economice Bucharest, Technical University of Bucharest, University of West Hungary, CVT Georgiki Anaptixi, and Oxford Brookes University.|
|Optimal Property Taxation when Government Revenue is Constrained." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This article investigates the issue regarding how a regulator rectifies inefficiencies associated with the negative externality from development in a framework where the regulator imposes a constraint on tax revenues. This article assumes that developers in a competitive real estate industry determine the optimal timing to enter this industry. These developers will ignore the negative externality, thus entering the industry earlier than is socially optimal. The regulator can impose taxation both before and after property development to induce developers to choose the same timing as chosen by a social planner. Unlike the previous research, this article also assumes that the regulator intends to collect a certain level of tax revenues. We investigate how the regulator should change property taxes in response to changes in the underlying exogenous forces such as the expected growth rate of demand for developed properties, the volatility of that growth rate, and the discount rate of developers.|
|Panel Modelling of Regional Commercial Property Markets: Empirical Evidence from Finland." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
|Paris Repeat Sales Commercial Property Indices." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
In this paper we present the two repeat sales index methodologies developed by Case and Shiller 1987 (WRS) Baroni, BarthÈlÈmy and Mokrane 2005 (BBM). We then apply these methodologies to the Paris commercial property market. We use the CD-BIEN database that contains more than 10 000 repeat sales transactions for commercial property in the Paris area covering the 1973-2005 period. We extract from the BBM index the most important factors to explain the price evolution of commercial properties and compare the index to the more traditional WRS index. Moreover, those two repeat sales indices based on price returns are compared: to the Paris IPD index based on appraisal and to a hedonic index based on private variables and localisation variables. The analysis is made for Paris and for the different French 'departements' in the Paris area.
|Path Dependence Concepts and the Real Estate Market: An Assessment of the Significance of Lock-in and History." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper explores the relevance of path dependence concepts as an alternative approach to the interpretation of real estate markets, their structures, outcomes and evolutionary paths. Path dependence offers an alternative analytical perspective to the standard paradigm of neoclassical economics. It suggests that market structures and outcomes are dependent on initial conditions. As a result markets and whole business systems become ëlocked-iní by historical events. Therefore a focus on such issues becomes essential as a means of understanding market structures and outcomes, market efficiency and the potential for market failures. Using this framework for analysis the paper considers two potential sources of path dependency in real estate markets. Firstly, the physical and durable nature of the built environment and secondly the market decision rules that govern the transactions environment in individual real estate markets. The paper concludes with an assessment of the insights gained by a path dependence approach to the analysis of real estate markets.|
|Perceptions of Land and Conflicts: The Case of Nairobi." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Perceptions towards land are as diverse as communities and are shaped by a myriad of factors. Thus in ancient Rome and Australia land was viewed as part of a people, and in some places ancestors were seen as part of both the living and land (Povinelli; 2002). In some communities it was as owning, while in others it may be a person with a soul (De Coppet, 1995). Inspite of the diversity in perceptions of land, there is a consensus that conflicts over land were more intense and continues to be in communities with strong beliefs and perceptions around land. In many communities where there is a difference in perception towards land a conflict always emerges. The story of Nabothís vineyard in the book of Kings clearly illustrates just how influential perceptions towards land are in shaping mansí decisions. Land remains a major source of economic and political power in many countries. This is because it is a source of economic power with profound impact on the psyche of man. In addition, increasing population, failure of the existing institutional and legal frameworks put it in a very special position. As a result the increase in land conflicts in land conflicts exacerbates inequity further weakening the African State. It is also clear that limited studies are taking place, particularly aimed at deepening our understanding of the interaction between land conflicts and inequity. In addition, there is a lack of consensus on appropriate theoretical and methodological tools for explaining the land question. Yet it is evident to all that land ownership, access, and use are acquiring political and ethnic dimensions with potentials for serious political instability across the continent. This paper aims at explaining the relationship between urban land conflicts and inequity. It will further explain how ethnicity interplays with political patronage and corruption within the existing land management systems to perpetuate land conflicts and inequity. It will use several theoretical strands among them institutional analysis to unravel the dynamics.|
|Performance Differences in Property Type Diversified Versus Specialised Real Estate Investment Trusts." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
As interest in REIT shares grows among individual and institutional investors alike, questions surrounding the comparative performance of different types of REITs have taken on added importance. The corporate finance literature has produced some evidence that diversified firms trade at a discount to otherwise comparable specialized firms. The same organizational structures exist within equity REITs, as some are diversified across property types while others are very specialized with respect to the type properties they own and operate. However, no research to date has addressed whether a similar diversification discount might exist among equity REITs. Stated differently, do diversified REITs outperform property specific types of REITs? In order to make this determination we propose to test for performance differences among equity REITs. Using a sample of 75 equity REITs tracked over an 8 year period, we test for the existence of a diversification discount using a single-factor Jensenís Alpha, Treynor Index, Sharpe Ratio, and ìDoubleî Sharpe Ratio, which was first proposed by Vinod and Morey (1999). For Jensenís Alpha and the Treynor Index, we also compute results from a multifactor market model that accounts for inflation so to investigate whether any differences in performance observed with a single-factor model disappear when an alternative return model is specified. Since Roll (1977, 1978) famously argued that the choice of market proxy matters in performance ranking studies, we utilize four standard market proxies in testing for performance differences.
|Planning Constraints and the British Economy." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The United Kingdom has one of the most restrictive systems of planning control in the world, and one which has become more restrictive over the sixty years it has been in existence. The most obvious effect of this long lasting constraint on the availability of land for urban use is that the price of land with planning permission for urban development may be a thousand times higher than the price of an adjacent piece of agricultural land for which permission for urban development would be unobtainable. This paper explores the economic consequences of the constraint and of the high price of urban land. The most obvious is its effect on the housing market where too few homes are built, housing is expensive, and the homes which are built are by some way the smallest in Western Europe. Moreover they are getting smaller and the majority of homes now being built are flats, a type of property which very few actually want to live in but which is forced on them because they cannot afford anything else. The constraint also affects commerce and industry. So London is the most expensive city in the world, but though wages are also high, those not owning their homes are poor relative to other countries because of the high cost of living. Other UK cities are also expensive, as evidenced by the fact that the cost of office space or of industrial floor space in these cities is amongst the most expensive in the world. The high cost of space discourages uses which use a lot of space. As a result manufacturing is discouraged and the UK economy is far more service oriented than other comparable economies. Moreover industrial production is falling in the UK while in the rest of the European Union it is increasing. This trend is exacerbated by recent planning policies which encourage the demolition of factories and offices and their replacement by houses and flats. The paper looks at the reasons for the continuing popularity of this policy of constraint. One reason is that the majority of the population are owner occupiers and therefore regard rising prices as a good thing, something which they would not do if they rented. Another is that most of the population believes that the UK is far more urbanised than it is, indeed four or five times more urbanised, and that the remaining rural area is half what it actually is. A third is that for almost the whole of the last sixty years planners and population have not seen economics having any relevance to land use ñ ëit is up to the planners to plan and the market to followí. Only in the past two or three years has the position changed and the Treasury started to take an interest ñ but whether policies will change is another matter.|
|Portfolio Optimisation for Corporate Real Estate." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Portfolio optimisation is an ongoing process of improvement, better performance and of creating flexibility in the portfolio. It is a staged process and has two distinct stages. The first stage involves the continuous assessment of risk, demand and supply and financial structures of a company and the second stage involves the identification of specific actions which would minimise the risk, maximise the returns while aligning with the unique objectives of an organisation. Corporate Real Estate (CRE) departments which have traditionally been reactionary and tactical departments are now under pressure to move towards an orientation that is strategic and flexible and geared towards the optimisation of the real estate portfolio. This paper will provide an overview of how the CRE departments can optimise their portfolios using the Six Sigma approach. The Six Sigma approach was developed by Motorola in 1986 for process improvement and product development. The Six Sigma approach has helped various organisations such as Honeywell, GE, Caterpillar and the Bank of America in improving their process, making cost savings and optimising their portfolios. DMAIC (Define, Measure, Analyse, Improve and Control), which is one of the core principles of the Six Sigma approach will be used to illustrate how the CRE portfolio can be optimised using the Six Sigma Approach. The key aims of the paper will therefore be: to introduce the concept of portfolio optimisation and the key structured methods and techniques that can be used by the CRE executives to provide agility and strategic direction to their portfolio.|
|Portfolio Transactions in Europe." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The market for real estate portfolios in Europe will stabilise at a high level over the coming years. Numerous factors are favourably impacting supply and demand and will continue to promote extensive investment. After a short introduction covering the macroeconomic and real estate market environment, the presentation will show the development of the market of portfolio transactions in several European countries, Germany, UK, France, Sweden, Italy, Central Europe [Poland, Czech Republic, Hungary, Slovakia], pan-European transactions - including the number of transactions per year, volumes, types of vendors and purchasers, nationalities of vendors and purchasers utilisation. The analysis covers all transactions from 1997 or later ñ depending on the country - and includes transactions up to the 3rd quarter of 2006. The energy of the market is the motivation of vendors and purchasers, new financing instruments and exit strategies. These factors will be also highlighted in the presentation. After discussing all of the mentioned dynamic features, we are able to give an informative picture about the future development of the market of portfolio transactions within Europe. The presentation is based on the new report published by Sireo Research in February 2007: ìSireo Research 2007 ñ Portfolio transactions in Europeî.|
|Practices of Real Estate Valuation in Greece." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||During the last years, the Greek real estate market has increasingly internationalized, mainly due to the financial liberalization. Globalization requires the broad use of the international valuation standards in accordance to the International Accounting Standards, under the pressures of EU and New Basel Accord. Traditional valuation practice in Greece faces a process of slow harmonization. This paper examines, the degree of variation between valuation standards and current practice, paying particular attention to the absence of an appropriate institutional framework for real estate valuations, and the main reasons of the lack of market transparency.|
|Predictability and Innovations in Office Market Performance." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
This paper examines office market performance at a city level in Britain. Markets in Birmingham, Edinburgh, Glasgow, Leeds, Manchester, the City of London and the West End (of London) are examined. The paper analyses the key determinants affecting office markets and compares similarities and differences in performance across these British cities. We analyse market adjustment and the timings of changes in property performance indicators and determine the degree of predictability in such changes. In addition, we also allow for information innovations to change the strength and timing of relationships. We use time series econometrics and test for stationarity and cointegration. We explore VAR methodology to test for Granger-causality and an error correction approach to permit examination of short run deviations from long run equilibrium. We also apply panel estimation when appropriate. The paper then discusses the interrelationships between office markets in different cities and the role that information innovations play in changes to those interrelationships.
|Pricing Inefficiencies in Real Estate Swaps." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Swap contracts in financial markets are normally priced assuming (either strong or weak) market efficiency. A recent study by Baum, Lizieri and Marcato  highlighted the importance of inefficiencies for total return swap contracts in real estate markets. After identifying the main inefficiencies linked to the investment in the underlying asset, we quantify their pricing for a swap contract between real estate total returns and a LIBOR rate. We also identify the main boundaries around which, trading is still rationale for different type of contracts and investors. We find that confidence intervals around the theoretical price are inversely proportional to the length of the swap contract. They also vary depending upon the underlying asset and the type of investor acting either as a buyer or a seller.
|Property Segment Equilibrium Forces and REIT Capital Structure." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper documents that about 60% of REIT capital structure variation is originating within property segments. This evidence suggests that the equilibrium process resulting from the interaction among peers within a segment will determine how a REIT chooses its capital structure. We rely on an increasing number of industry equilibrium studies linking industry equilibrium to capital structure to shed some light on the observed REIT capital structure variation within property segments. We find that REITs adjust their capital structure in response to changes made by segment peers within their leverage quantile. REITs also react to leverage changes made by segment peers outside their leverage quantile, but in this case the adjustment is less strong and in the opposite direction. There is also strong evidence that REITs entering a segment use a higher leverage ratio than incumbents while segment leaders use less leverage than rival firms. Controlling for property segment equilibrium factors increases our overall explanation of REIT capital structure variation by about 12% over and above the traditional trade-off and pecking order determinants of financial leverage|
|Property-Led Urban Development Model in China: A Time for Change?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In the last 15 years Chinese cities have had phenomenal physical and economic growth, which has been powered by a property-led urban development model. Relying on state ownership of urban land and control of rural land, this model allows local governments, acting as local representatives of the state, to sell long leaseholds in land, referred to as Land Use Rights and use the receipts to fund urban infrastructure development to facilitate urban growth. It also encourages the property industry, designated as a pillar (lead) industry, to carry out property development not included in local development plans. This paper argues that the property-led development model fails to promote sustainable urban development, leading to land depletion and environment degradation. On one hand, it distorts the development planning regime to create situations of over-supply, poor location and inappropriate specifications of commercial property, heightening risks to property investment in all cities except Beijing and Shanghai. On the other hand, the model reduces both market and affordable housing supply, fuelling housing price inflation and aggravating affordability. The paper contends that it is time for the property-led development to become plan-led, and for property industry to put a greater emphasis on management and investment. It offers a set of recommendations for building a new planning regime, a new housing supply regime and establishment of an efficient property investment market.|
|PROPERTYQUAL: A Service Quality Instrument in Property Management of Purpose Built Office Buildings in Malaysia." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
The purpose of this study is to develop PropertyQual, a service quality instrument for property management profession and to contribute to research that analyses the relationship between expectations and perceptions of service quality. It is also aim to use a gap analysis based model to measure tenantsí perceptions of service quality in the property management of purpose built office buildings in Malaysia. This study utilizes a combination of quantitative and qualitative to research. Mixed methods allow triangulation of the findings and also enable the use of one method to inform the other, reveal paradox or contradictions, and extend the breadth of inquiry (Creswell, 1994). The Cronbach alpha and CFA analysis confirmed that PropertyQual is a robust instrument to measure service quality in the property management services. Since this study only examined the instrument within a single service (property management) in Malaysia; any suggestion that the PROPERTYQUAL is generally superior would still be premature. The current findings do provide some important insights of understanding the variables that contribute to service quality and tenants satisfaction of property management services.
|Pros of Proximate Property: Identifying the Local Information Advantage in Real Estate Markets using US REITs." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Real estate is a local phenomenon, and being the quintessential local industry much of the information real estate investors gather about surrounding markets is also acquired in situ. Because information flows are spatially bounded, knowledge asymmetries may provide local investors with the opportunity to exploit persisting market inefficiencies. This study is the first to model commercial real estate investment-returns with respect to local information advantages. To test for these advantages data on the distances between 397 offices and over 20,000 properties of 45 US REITs between 2001 and 2005 are used to create an index for the effective average distance between properties and their closest office. This index is then compared with the cumulative rates of return for each REIT-year. Although it is found that this unique dataset is consistent with the existence of localized return advantages in real estate markets, the inability to adequately control for potentially biasing factors casts doubt on the accuracy of these findings.|
|Public Private Partnerships in Real Estate: What Would a Supporting Algorithm be like?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Introduce and discuss methodological issues on this very specific kind of PPP, as the ones concerning space development are. The methodology should have a common basis throughout societies that share the same legal and economic principles. This methodology should have a strong relationship with real estate appraisal procedures. The presentation will discuss conceptual basis for a methodology and refer to implementation problems and solutions whenever useful. Risk of PPP in Real Estate/Urban Planning can be mitigated for both parties provided an algorithm for planning gains determination is previously accepted.|
|Quantifying the Reversibility Phenomenon for the Repeat-Sales Index." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The reversibility phenomenon for the repeat-sales index (RSI) is a serious obstacle for the derivatives products; it could hinder their introduction or their success. It is also an undesirable characteristic for the management of the real estate risk. This article provides a general solution for this problem, using an informational reformulation of the RSI framework. We present first a theoretical formula, easy to interpret and easy to handle, before implementing it. Our methodology is robust in the sense that its conclusions are not conditioned by any specific dataset; moreover, the numerical estimations of the reversibility percentages are reliable. For the derivatives our technique has strong implications for the choice of the underlying index. Indeed, even if the reversibility of the RSI is probably higher compared to the hedonic one, this index remains a challenger because of the predictability and the quantifiabilility of its revisions.|
|Quantitative Measures of CRE and Its Link with Organisational Performance." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||For CREM (Corporate Real Estate Management) to be able to deliver added value to its client organisation, it has to know 1) which CRE aspects influence its employees, processes, machinery, visitors, etc, 2) how these aspects influence performance and 3) how to measure and manage them. Analysis of literature in relevant fields (e.g. CREM, architecture, ergonomics, installation technology) showed an extensive list of 52 relevant CRE aspects, that influence performance measures of efficiency, effectiveness, flexibility, productivity and creativity. Of these CRE aspects, almost half deal with the architectural design. A big portion of these architectural design aspects are described in CRE literature in qualitative terms only, like ëopen layoutí and ëvisibilityí. This paper defines quantitative measures for these aspects, deducted from other spatial research fields (environmental psychology, geography, urban design), so that they can be correlated to organisational performance too. These quantitative measures belong to spatial network analysis or the measurement of elements. Then it discusses in which ways (and when) CREM can use these measures to define policy and serve its client better.|
|Real Estate Allocation in an ALM Framework." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
This study explores real estate allocation in the investment portfolio decision from the position of an institutional investor, specifically a pension fund. We apply Sharpe and Tintís (1990) investment framework with an explicit link between investment opportunities and pension-plan obligations. This investment model arises from a traditional mean-variance asset-only optimization but also maximizes utility while incorporating liabilities. It allows for varying emphasis levels on liabilities, funding levels and risk tolerance and measures the relationship among expected returns, risk and liability hedging characteristics. The liability hedging characteristic summarizes the assets impact on the pensions fundís future funding surplus and thus quantifies the utility that investors with liabilities can derive from different asset classes. Moreover, we widen the investment opportunity set by distinguishing between direct and indirect real estate investments while broadening the empirical setting by looking beyond US allocations.
|Real Estate Asset Management: A literature-based analysis." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Real Estate Asset Management has become more important in the German market during the last couple of years - also due to a massive growth of Foreign Direct Investments (FDIs) into the Real Estate Sector. Therefore, the question of professional Asset Management seems to have a quite popular and still growing importance now that enormous amounts of real estate asset are allocated in portfolios. At the same time, real estate focused publications on the profession of Asset Management may not be found manifold. This shows an imbalance between the significance of professional Real Estate Asset Management in practice and a lack of provided research papers and standard works. This research paper tries to identify this lack by analyzing publications on the US market, then narrowing the perspective on the European market and in a third step to Germany. It also tries to find a common definition and classification in the background of common international standards for the term Real Estate Asset Management on the German market and thus a starting point for further research on this topic.|
|Real Estate Education as an Interdisciplinary Study Field." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||"As the discipline of real estate education comes to a stage of maturity in Germany, the providers of real estate education begin to specialize. The paper provides empirical evidence for this specialization with regard to an approach which can be described as ""transaction-based"", as it focuses on real estate investment, finance and valuation, flanked by law, tax and economics. The paper further researches the understanding of the term ""discipline"" by analyzing what type of real estate education can be described as inter-, multi- or transdisciplinary. Lastly, the paper compares the German results of real estate research priorities with international evidence for the US (Worzala; 2000), Australia (Newell; 2001) and U.K. (Newell, McAllister, Worzala; 2003)."|
|Real Estate Education in Greece." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||During the last decade, the Greek real estate market has increasingly internationalized, mainly due to the financial liberalization. New openings and careers have emerged: property consultant, asset manager, appraiser. However, these developments have not spawned real estate education programs and scientific research at the universities. In the past years, private education institutions have developed real estate courses, however their audience remains limited. In fact, consulting services are provided by engineers, economists and lawyers, with no specialized education in real estate and land markets. In a context of increased complexity of the Greek real estate market and development projects, there is a lack of executives to satisfy private and public sector needs. Some of the main consequences of this situation include coordination problems of the related public policies and institutional frameworks to meet market needs, the increasing number of private real estate development projects failures and the difficulties of the public sector assets management.|
|Real Estate Fund of Funds: A Transaction Cost-Based Analysis." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Indirect real estate investments have become increasingly attractive for institutional investors as well as for privates. Besides the obvious advantages compared to direct investments, such as smaller lot size and better liquidity, the question of cost of third-party management arises. There is a vast number of real estate vehicles available in the market and many investors do not have the resources to conduct excessive research in order to identify adequate products to build a real estate portfolio. Real estate fund of funds offer a managed product which invests at a specified risk level into selected funds. It takes over the process of selection and portfolio management. Being a diversified investment, risk can be minimised according to portfolio theory. While there are various interesting topics when analysing fund of funds, such as the selection of target funds or the principal-agency problems, this paper is supposed to look at the transaction cost aspect. Especially the fact, that additional fee levels appear, as the fund of funds manager requires remuneration for his service, is often used as a argument against this vehicle. Therefore, transaction cost form the basis of the analysis. As different legal structures imply different cost, a selection of structures is presented. Furthermore, performance is analysed and compared to the cost.|
|Real Estate in the Family Investment Portfolio." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Most real estate portfolio optimisation models are directed at investment institutions and fund managers. Individuals face similar portfolio construction decisions but their portfolios are often dominated by their family home. This paper treats the family home as an investment asset around which the owner builds a suitable portfolio. Some of the reasons for ownership, rather than renting, and the characteristics of the investment (such as the lack of diversification, the high debt ratios, the illiquidity, the transfer costs and the favoured tax status) require a special approach to selecting weightings for the other investments in a portfolio that is dominated by the family home. This paper argues that the volatility of capital returns in different suburbs over at least 5 year holding periods is an appropriate measure of risk. Using data from the Australian city of Perth, the paper explores which investment assets would have offered the best protection against poor performance of the family home as an investment. Using this approach, the evidence suggests that the composition of private investment portfolios should reflect the type of suburb, the portion of investment wealth in the home, the ownerís risk profile and investment horizon. Methods of measuring house prices over time in different suburbs have shortcomings which cast doubts over the reliability of these empirical results. However, the principal purpose of this paper is to consider an alternative method of constructing private investment portfolios that may be more useful to personal financial planners than conventional portfolio optimisation models.|
|Real Estate Issues in the Far Northern Regions." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
The demand for energy has led to demands for investment in the Far North regions. The regions are rich in mineral wealth but are characterised by difficult conditions in which to live and work. Exploitable resources are widely scattered with difficulties in accessing them. They are located in areas with fragile ecologies, which are indigenous peoples with their own cultures and traditional economies. Disruption to these by the demands of mineral exploitation or hydro-electricity can have a devastating impact upon these communities. Development has potential benefits but also the risk of harm. Central government and the wider populations of the countries involved also have claims upon the natural resources and may have different perspectives upon the cost-benefit trade off. There are potential conflicts between the populations of these regions and powerful companies seeking to minimise investment risks. These issues are examined through the use of examples from the Russian Federationís Sakha/Yakut Republic, Canada and Alaska. Among factors analysed are the potential of the mineral resources, legislation for regulation by central and local authorities, the readiness of and opportunities for local companies, geological-technological standards for mineral prospecting and extraction, building standards for real estate construction, norms and rules for environment protection, social-economical conditions, and action on long-term programs, state energy and corporationsí fuel strategies. The paper examines different combinations and harmonisation of programs and strategies. These can be correlated with the regional social and economical tasks, and used for the development of efficient real estate infrastructure.
|Real Estate Markets and Brownfield Redevelopment Projects." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In the last ten years real estate marketing Europe has known relevant innovation, by the financial process side, public and private property securitisation, organizational phenomena known as Outsourcing processes. Financial market is actually oriented to residential, commercial, logistics, leisure and health property investment where is possible counts positive returns requirements and risk profile is particularly low. What is the measure and what terms these organizational and process innovations influence on the urban requalifications oriented to the physics- qualitative improvements condition of the urban centres? Have these changes improve debt and equity collection procedures by private interest? Due to an increase in liquidity flow in the financial market, we attend in the future a relative increase to the public-private project financing. The aim of the present work is what and with future perspective could be the effects of real estate securitizations and organizational market methods on infill projects. In treating these themes we will develop a literature focus on: * asset back securitization of real estate property and outsourcing process associated. * Economics models utilised in real estate sector. * Financial techniques to evaluate investments.|
|Real Estate Risk for Banks: Measurement and Management in UniCredit Group." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Banks and financial institutions in general are more and more involved in the real estate markets, as witnessed by a growing trend of direct investments. Despite real estate risk has been traditionally underestimated, it is one of the relevant risk sources as properties are part of banksí assets and make up the largest share of collateral for banking loans. Consequently, UniCredit Group has decided to measure and manage all aspects of it. In doing so, UniCredit set up a real estate committee to manage the real estate portfolio on a group wide and it is also monitored by the risk committee. Moreover, such an extension of risk management is also consistent with the new supervisory guidelines of Basel II. Real estate risk is defined as the maximum potential decrease in market value of the bank's own properties over a one year time-horizon. UniCredit developed a measurement model that implies evaluating and updating market values of properties and estimating their volatility. The latter is inferred from a set of indexes about different regional real estate markets. Input data is collected for the whole group with more than fifteen European countries. Our calculation outlines that real estate is quite risky and often higher than intuitively expected. The quantitative risk assessment directly leads the amount of equity capital earmarked to face unexpected losses. A similar method is going to be adopted to set the loan size given the value of a real estate property used as collateral.|
|Real Option Pricing in Mixed-use Development Projects." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
The application of real options theory to commercial real estate has developed rapidly during the last 15 Years. In particular, several pricing models have been applied to value real options embedded in development projects. In this study we use a case study of a mixed-use development scheme and identify the major implied and explicit real options available to the developer. Moreover, we offer the perspective of a real market application by providing a decision framework in order to price the main real options through a binomial approach with a combined set of measures to quantify development risk and resolve uncertainty, timing, irreversibility and pricing. We identify an approach to ascertaining appropriate volatility inputs for the model. Finally we suggest our framework can be used for risk assessment purposes, both ex-ante and ex-post.
|Real Options to Evaluate Real Estate Development." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Since the 1990s real options analysis (ROA) gained popularity among finance researchers in real estate. Recent research by Quigg, Buetow and Albert, Hendershott and Ward and Holland et al. have included real option valuation models to real estate investment decision-making. Kemna and Trigeorgis have identified options embedded in capital projects that apply to real estate valuations. In the real estate development market there is evidence of multiple real options embedded within real estate development projects which add value to the project, such as the option to abandon, defer, expand, downsize or switch use. This paper aims to bridge the gap between theoretical studies and applied project valuation by describing the actual application of ROA to two real estate development projects. In one case, the real options were defined in a mutual agreement between the developer and the municipality allowing the developer to defer phases up to three years for a 5 percent premium. ROA enabled the valuation of managerial flexibility, instead of obtaining premiums based on financing costs of holding land. In the other, an approach integrating decision tree analysis and ROA involved outcomes from rezoning scenarios. In this case, the ROA model is dependent on the accuracy of the NPV from the DCF analysis. We compare these two cases and conclude by showing how the data needs and specifics of the assumptions involved need to be clarified in order to apply ROA to real estate decisions.
|Realistic Portfolio Analysis and Construction." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Investors wishing to analyse the risk of their portfolios, and to rebalance them in the light of the results, often do not have detailed stock-level data. Typically, however, asset class data is available: for example, the manager of a real estate portfolio may not have each individual stock's risk characteristics, but will usually have access to the risk characteristics of the relevant sector indices. In these circumstances, the conventional approach is to assume that each sector index as it stands is a good representation of the corresponding sub-portfolio, ignoring the sector information. Sometimes this will be a reasonable assumption, but it is unlikely to be so if the sub-portfolio is not an index fund, closet index fund, or commingled fund with similar characteristics, that is if (a) it is genuinely actively managed, and/or (b) the portfolio is too small to warrant holding an adequate number of stocks to diversify away residual and other risk. // This paper suggests a general methodology by which the investor can use the sector-level information to improve on the conventional approach, and * obtain a better estimate of total portfolio risk, whether in absolute terms or relative to a benchmark * more accurately estimate the risk contributions of the different parts of the portfolio * allocate assets more realistically * more specifically, decide whether commingled funds are a better choice than direct holdings for all or part of the portfolio. // The methodology has now been implemented in practical software and, with the assistance and encouragement of IPD, applied to their database with revealing results.|
|Regional Life Quality Differences in Japan: An Analysis with the Earthquake Risk." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Japan is famous for its earthquakes. To examine effects of earthquake risk on quality of life of households, we estimate the quality of life index (QOLI) considering earthquake occurrence probability, and examine the regional differences of the QOLI among Japanese cities. We first estimate the hedonic price models of wage and housing rents using the household longitudinal data covering all Japan, and then estimate the QOLI. From the estimated results, we find that the earthquake risk has significant impacts on householdsí QOLI, and that there are large differences in QOLI among cities in Japan. We propose local government policies to prepare for earthquake risks in each city based on our results.
|Relationship between Location, Size and Price in the Romanian Housing Market." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Size and neighbourhood significantly affect house prices, conditional on social and economical trends. In this paper we investigate the relationship between size, location and price in Bucharestís apartments market, which has recently seen a dramatic price surge. Using average transaction prices from last years, we investigate price evolutions toward and away from the centre.|
|Repeat Sales Analysis of the Value of Seaview." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Almost all previous studies on the value of seaview were cross-sectional as it is almost impossible to find any formation or removal of seaview in the scale of man time. However, cross-sectional analysis is well known of its shortcoming in controlling housing quality and temporal components in hedonic pricing models. Furthermore, spill-over effects or positive externalities cannot be studied by cross-sectional method. This paper is probably the first study on the value of seaview by repeat sales method at an estate where the seaview was artificially removed by reclamation. Better still, the authors have developed a novel WLS repeat sales model to rectify the variations of variance. The results can pinpoint to the actual value of possessing a seaview in a high rise building context.|
|Repeat Sales Index for Real Estate Prices: a Structural Time Series Approach." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The repeat sales model is commonly used to construct reliable price indices in absence of individual characteristics of the real estate. Several adaptations of the original model of Bailey, Muth and Nourse (1963) are proposed in literature, but all of them have in common that they use a dummy variable approach for measuring the price index. The main drawback of these approaches is that the price levels for the different time periods are supposed to be independent. In the model proposed in this article, the dummy variables are replaced by a structural time series model, in this case a local linear trend model in which both the level and slope can vary over time. The main advantages of this approach are that it is a robust method and that it can be applied in thin markets where relatively few selling prices are available. Contrary to the dummy variable approach the structural time series model enables to predict the price level based on previous information, so even for time periods where no observations are available an estimate of the price level can be provided. Conditional on the variance parameters an estimate of the price level can be obtained by applying regression in the general linear model with a prior for the price level, induced by the local linear trend model. The variance parameters can be estimated by maximum likelihood. The model is applied to several subsets of selling prices in the Netherlands. Results are compared to standard repeat sales models.|
|Residential Property in Emerging Economies: The Case of Ghana." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|Retail-Led Urban Regeneration: The Case of Hyson Green, Nottingham." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Following the success of the Harlem, Manhattan project in the early 1990s where retail investment was used as a catalyst for regeneration, the UK government has shown increasing interest in promoting similar schemes in partnership with the private sector. Preliminary findings of the Under-served Markets Project set up in 2002 to investigate opportunities for business investment in deprived areas as a strategy for regeneration suggests strong potential. Retail investment is increasingly recognised as one of the leading strategies for renewing deprived areas. Major food superstores, in particular, are widely believed to have the potential to stimulate wider regeneration through improving the physical environment, providing employment opportunities, increasing shopper catchments and improving choice and price of food. The success of this strategy remains subject of debate among academics, planners, policy makers and other professionals. Within this context, this paper explores and evaluates the effectiveness of retail investment as a stimulant for the regeneration of a deprived area in Nottingham. The evaluation of urban regeneration is a conceptually and methodologically complex task. This study, therefore, adopts a methodological pluralist approach to allow for detailed research activity in a variety of areas, and yet remain sensitive to important strands of diversity that exists in method of enquiry, empirical verification and explanatory models. The approach uses performance indicators and qualitative methods. It tries to overcome some of the rigidities imposed by common approaches. Preliminary findings, while generally confirming positive effects of retail on regeneration also highlight the importance of area specific factors in the process.|
|Risk and Return of the Clients Choice Programme for Housing Corporations." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
The Clientís Choice Programme offers tenants freedom of choice in tenure. With this programme, a housing corporation offers tenants the choice between a traditional rent contract, fixed rent or fixed rent increase contracts for a five- or ten-year period, socially bound ownership, and ownership with a buy-back option. This programme has been introduced by a Dutch housing corporation a few years ago. Currently, more and more Dutch housing corporations are implementing this programme, or are thinking about implementing it. For the landlord, the Clientís Choice Programme has the benefit of increasing cash flow, which can be used for (social) housing investments. However, there are also substantial financial risks, concerning for instance the rate of sales, the development of market values and the potential costs of having to buy back the dwellings. In this paper we present the results of a risk analysis study performed for a Dutch housing corporation that plans to introduce the Clientís Choice Programme. In this study we will look at issues like the recommended introduction speed (all dwellings at once, or gradually over a specific time span) and the probability that a tenant chooses a specific type of tenure. We analyse the impact of these issues on the development of solvency and liquidity. We use Monte Carlo simulation to establish both the expected development and the risk, measured as downside probability and Value at Risk.
|Risk Diversification in a Real Estate Portfolio: Evidence from the Italian Market." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Real estate investment is different from financial investment and such difference can affect the results of traditional mean -variance models. The literature on property finance summarises the differences of expected return and expected risk among individual real estate investments into four risk profiles: tenant, endogenous, exogenous and financial risks. The aim of this paper is to examine how the differences reported in the literature can affect the composition of a real estate portfolio based on Markowitz optimisation standards. The results stemming from the use of a real estate database supplied by Fimit SGR showed that an ex-ante study of risk profiles can help to identify those investment opportunities which are more or less near to the efficient frontier, although there is no prevailing criterion to identify a portfolio able to maximise investment diversification benefits.|
|Risk Management with Copulas." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Real Estate Risk Management tools are traditionally based on mean-variance analysis. The non-normal behaviour of financial asset returns including real estate securities is a violation of one of the fundamental assumptions of mean-variance analysis. In this paper, the pitfalls of using the correlation coefficient as a measure of dependency is first discussed. The use of Copulas as an alternative to modeling the dependence structure and more generally as a risk-management tool is proposed. Copula based Value-at-Risk computations are also carried out.|
|Scale Economies and Corporate Transactions in the Spanish Real Estate Sector. Is there a Link?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
The last years, and in particular 2006, have been particularly active regarding corporate operations in the real estate sector in Spain. We have seen many mergers and acquisitions of development and construction firms, and the experts foresee a similar trend for 2007. One possible reason that explains this phenomenon is the actual status quo of the sector in Spain, highly fragmented and populated by a myriad of Small and Medium Size firms, most of them family business. Another complementary reason is the possibility of economies of scale being prevalent in the sector. Thus, firms would involve into M&A operations to gain size and therefore efficiency. In this paper we begin by analysing the last corporate operations that have been carried out in the Spanish markets in the last period of time. After getting an idea of the common features of these transactions, we go one step further and try to ascertain the reasons why these M&A have been implemented. In particular, and using a sample of Spanish development and construction firms, we analyse empirically whether the data confirm the existence of scale economies. Tentative results do not support this hypothesis. Hence, we provide other explanations for this type of operations, such as easier access to the strategic raw material (land), whose market is highly imperfect in Spain, or the search of diversification opportunities through the purchase of companies that operate in segments/locations different from the one of the buyer. These explanations agree better with the Spanish experience.
|Securitization of Real Estate Through the UPREIT Form: A Rational Expectations Exposition." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper studies how competition between taxable and institutional investors shapes the UPREIT organizational form (to develop the real estate sector of the economy). We employ the Lucas (1978) framework to demonstrate that UPREITs adapts to regulatory changes by (i) meticulously acquiring a hybrid form (containing the desirable features of both REITs and RELPs); and (ii) efficiently trading off debt claims (between its constituent investor base). This enhances welfare by mitigating administrative costs, agency costs, bankruptcy costs, illiquidity costs and taxes; thereby confirming the assertions of Coase (1937), Alchian (1950), Miller (1977), Guenther (1992) and Graham (2000).|
|Semiparametric Estimation of Land Value in an Emerging Market: The Case of Beijing." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Since the urban land reform in late 1980s, the land and property market have been gradually established in China. Despite of a fast growing literature on this emerging market, quantitative analysis of the land value determination mechanism has been scarce. Using a unique data set of land sales in Beijing from 2005 to 2006, this paper presents a comprehensive quantitative investigation of the land market in China. We aim to discover whether there is an effective land market at work. Hedonic price modelling technique is adopted to analyze the determining factors of land value in Beijing. We take into account the factors of location, parcel size, planning constraints, social and economics characteristics of the neighbourhood, as well as the characteristics of the buyers. A semi parametric model using a kernel core is utilized, by which the land value is allowed to change nonlinearly and non-monotonically with parcel size. Our analysis yields encouraging findings. The land value in Beijing is determined by size, planning uses, location and other neighbourhood characteristics. This agrees with the urban economic theories and empirical findings from other jurisdiction, and hence suggests that the land market in China is maturing. On the other hand, the land price is also found to be associated with buyer characteristics. Foreign invested companies pay more for land parcels on average, everything else given equal. Our empirical findings suggest that the land price in Beijing is significantly influenced by social, economic and political factors.
|Shopping Patterns and Determinants of Shopping Centre Success in a Transition Economy: The Case of Beijing." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Many researchers have focused on the success of shopping centres in developed countries, but few studies have been done for developing countries. Using Beijing as a case study, this paper analyzes consumer shopping patterns at shopping centres. The data is collected by surveys of shoppers at four shopping centres. This paper also attempts to understand the magnetism of shopping centres and to identify the determining factors of success. The study finds distinct patterns of shopping behaviours based on patronage factors. Shopper types identified are convenience shoppers, price conscious shoppers, size conscious shoppers and facility conscious shoppers. Ordinary Least Square regressions show that the expenditure amount is positively related to good parking facilities and duration of stay, while the duration of stay is influenced by promotional activities.
|SiVa: Econometric Cellular Automata for a Simulation of Real Estate Values." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|Size and Calender Anomalies: The Case of International Property Shares." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Price anomalies have being intriguing both financial professionals and academics for many years. Academics like to think that asset pricing models have matured sufficiently in that enable those who use them to price assets according to the risks that are being modelled. However, at the same time we continuously observe price behaviour that cannot be attributed to the identified drivers in our theoretical frameworks. These repeating price irregularities, anomalies, create puzzles that are in need of solution, or at least an explanation. Recent studies in the mainstream finance literature show that some of these anomalies have either disappeared or been reversed in the general stock market. This change is often to changes in the market depth, the increase of institutional involvement and the rise of cross-border trading. For real estate shares the issue has been analyzed as well by several authors. However, so far these analyses have been limited to U.S. REITs and not considering potential time variations in price anomalies. In order to assess the effect of market maturity, liquidity and institutional involvement an international scope grants possibilities for new and valuable insights in the matter. Therefore we will study daily price returns of all real estate shares traded on the ten most prominent financial markets in the world: U.S., Canada, U.K., France, Germany, Spain, The Netherlands, Australia, Japan and Singapore. We analyze a period that dates back to 1985 and we will explicitly focus on variations over time.|
|Small Business Tenant Legislation in Australia: Does it Provide a Solution to Part of the UK - Lease Reform Debate?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper addresses the commercial leases policy issue of how to deal with small business tenants. The UK has adopted a voluntary solution to commercial lease reform by using Codes of Practice which is in contrast to the legislative approach adopted by Australia to attempt to solve its perceived problems with small business retail tenancies. The major aim of the research was to examine the perceptions of the effectiveness of the legislation in Australia and discuss any implications for the UK policy debate but the results of the research also raise questions for the Australian regime. The research used a combination of literature and legislation review and a semi structured interview survey to investigate the policy aims and objectives of Australian Federal and State Governments, identify the nature and scope of the Australian legislation and examine perceptions of effectiveness of the legislation in informing small business tenants. The situation is complicated in Australia due to leases being a State rather than Federal responsibility therefore the main fieldwork was carried out in one case study State, Victoria. The paper concludes that some aspects of the Australian system can inform the UK policy debate including mandatory information provision at the commencement of negotiations and the use of lease registrars/commissioners. However, there are a number of issues that the Australian legislation does not appear to have successfully addressed including the difficulties of legislating across partial segments of the commercial property market and the collection of data for enforcement purposes.|
|Some Aspects of Land Management and Property Valuation in Poland." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The land management and real estate valuation in Poland are regulated by Acts of Parliament and Regulations of the Council of Ministries. The authors of this article concentrated in particular on legal issues and methods of land and property valuation connected with special purposes, e.g.1. Perpetual usufruct is specific form of public land management in Poland. Since 2005 there has been the possibility of transforming this right into full ownership right. In this case valuation of land is necessary. The authors of this article presented the procedures of this change.2. People who lost their property in connection with World War II can obtain compensation from the State. Their real estates left outside the borders of Poland are needed to be assessed based on special procedures.3. Deprivation ownership right or their right to property in Poland can be realised only exclusively. In this paper procedure of expropriation was done. It research cases of compulsory purchase of real estate in last years 2002-2005.4. This study presents the current procedure of real estate acquisition by foreigners in Poland as well. The intensity of the process has been analyzed in detail for the years 1990-2005.|
|Spatial Concentration in Institutional Retail Investment in the UK." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Geographic diversity is a fundamental tenet in portfolio management. Yet there is evidence from the US that institutional investors prefer to concentrate their real estate investments in favoured and specific areas as primary locations for the properties that occupy their portfolios. The little work done in the UK draws similar conclusions, but has so far focused only on the office sector; no work has examined this issue for the retail sector. This paper therefore examines the extent of real estate investment concentration in institutional Retail portfolios in the UK at two points in time; 1998 and 2003. The findings also indicate that retail investment correlates more closely with the UK urban hierarchy, than that for offices as measured by population, but is focused on urban areas with high service sector employment.|
|Spatial Hedonic Regression Models for Real Estate in Vienna City Region." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
In this contribution we establish hedonic pricing models integrating spatial effects. Based on prices for more than 52,000 residences in the Vienna region, which are arranged by postal code, we specify a hedonic regression model which explains the price structure in this sample. For this purpose we use explanatory variables such as the buildingís year of construction, its total floor space, the number of rooms, the floor the domicile is located on, the existence of a garage or parking area, the existence of an elevator, balcony or terrace as well as its current condition. However, not only the marginal effects of individual characteristics that contribute to the value of a building are estimated but also spatial effects. We therefore go further to integrate spatial effects by employing both geoadditive and spatial autocorrelation (SAR) models. In the geoadditive models, the postal code serves as a location variable. The spatial effect captured by this variable serves as a surrogate for variables not collected in the sample. In the SAR-models, a weighting matrix reflects spatial interaction (spatial autocorrelation) and spatial structure (spatial heterogeneity). The model can then be interpreted in terms of spatial spillovers in supply and demand for real estate. The results obtained in this study can for example be applied to project development and used for investment decisions in order to derive the future return of a building with certain characteristics in a specific district.
|Spatial Patterns of Traditional and Modern Commercial Centres." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper aims to investigate changing patterns of commercial centres in Istanbul. In order to evaluate the different patterns, their locations on urban macroform and spatial characteristics such as density, compared with their accessibility values. Space syntax method is used to measure the accessibility of each street in urban transportation network via calculating global and local integration of commercial centres. Calculated global integration values are between 0, 03 and 0, 18. Local integration values ranging between 0, 3 and 2, 17. Traditional and modern commercial centres of Istanbul can be classified into three spatial patterns: While traditional centres have circular or linear pattern, modern centres represent a point pattern which rise on third dimension. The traditional centres have the highest values of local integration although they are not most integrated areas of global integration map. On the other hand modern centres are concentrated in most integrated areas at local and global scale of Istanbul metropolitan area. These most integrated areas have more importance with their historical background and spatial characteristics than the periphery of Istanbul. Although traditional and modern centres aim to serve whole Istanbul and contains similar functions, in traditional centres land use density is homogenous with their environment but modern commercial centres concentrates on nodes with higher density than their surroundings. Location choices of modern centres result in overload to these areas by increasing density. This research indicates the potential problems of new commercial centres located in densely settled and historical areas which should be taken into consideration by municipalities and investors.|
|Special Aspects of the German Real Estate Market: An Empirical Project." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In the paper central elements of the German real estate market are analyzed in an exemplary manner for different German state capitals. This empirical study is based on data collected by IMV program, a special research tool for real estate agents. The paper e.g. focuses on regional patterns, questions concerning real estate marketing, the marketing period, the number of real estate agents operating in a certain area, the market share of real estate companies.|
|Special Real Estate Funds in Germany: An Expanding Investment Vehicle with Negative Capital Growth?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
In 2006 Special real estate funds in Germany represent more than EUR 19 billion assets in real estate. It is quite notably that the total return fell on average from 6.5% in 2001 to 2.8% in 2005. However, during the whole analysed period of 2001-2005 the income return remained at 5.4%, whereas capital growth declined and was even negative between 2003 and 2005. Yet investors, investment companies and the public domain do not yet have any access to performance data of special real estate funds. The paper intends to close this gap. It provides a thorough comparative analysis of special real estate fund performance in Germany and clarifies why this sector, despite the low performance, sees an increase in funds. All the relevant information about the special real estate funds was collected from the federal bulletin (Bundesanzeiger). Based on standardized methods an adjusted performance measurement was carried out. In total 56 special real estate funds were analysed during the time period of 2001-2005. After a brief review of special real estate funds industry the paper focuses on a) the typical construction of special real estate funds, b) the relevant performance measures, and c) statistical analysis of funds return, total return, and operating cost.
|Specialised Assetís Valuation." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The estimation of assets is based on both traditional political economy and modern political economy as well. Estimate principles and techniques had been decided upon prior to 1940 but valuation, as a profession, has developed after 1940. Changes developed quickly in the economic and business field locally and externally had an impact over the significance of the professionals within the market. In the last years, more and more objective, skilled, professional estimates have been requested in Romania covering a significant range of activities, businesses. The profession of valuer is still developing in Romania. After 1992, countryís economy was in the transition to the market economy, changes of ownership have required a higher amount of information over intangibles and real estates. Thus, a range of real estates have been created which already has a stock exchange based on transaction of similar assets. There are assets that are sold quite seldom or never. They are called specialised assets and their value is calculated in business using net replacement cost method and not as a way to a business. Taking into account the intrinsic character of the specialised assets, their valuation needs training of a specialised valuer. These specialists should be selected in compliance with their competence, experience, and well-known reputation in the field and with postgraduate skills achieved within continuous training programs. These requirements imposed by this profession are sustained by the fact that currently there isnít a proper academic training for the valuer of specialised assets.|
|Specifics and Potentials of Public-Private Partnerships for Universities and Research Facilities in Germany." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Public universities and research facilities in Germany are very much transforming due to political, legal and organizational changes. Additionally, the number of students will increase in the next eight years by 35 percent. The requirements of users in terms of rooms and services are changing very fast too. A lack of necessary maintenance and intended building projects are already obviously.These future challenges are just solvable by appropriate actions and new concepts in public real estate management. It is stated in this paper, that addressing life cycle issues in project development helps to satisfy the present and future needs of the academies. As a step along the road Public Private Partnerships (PPP) function as a new procurement route in order to deliver public buildings in an efficient manner under life cycle aspects. The aim of this paper is to investigate factors which are important for the application of PPP in the university sector. A set of 51 questions was developed based on literature review and experts opinion. The questionnaire is used in semi-structured interviews with real estate professionals at different types of German academies such as universities, colleges, research institutions and student facilities. The data collected during the interviews is analysed concerning life cycle optimisations and risk transfer potential within a PPP procurement route. The results of the investigation show that PPP as a procurement route is equally applicable for university and research facilities. Furthermore, the application of the life cycle concept affords focusing on real estate related benchmarking data.
|Standard Ground Value in the Context of the Harmonisation of Property Valuation." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In the wake of the continually growing internationalisation in the property industry the pressure for harmonised property valuations is ever increasing. The International Valuation Standards Committee has addressed this need with the release of the Inter-national Valuation Standards, which have served to provide an internationally recognised market value definition, while the methods and practices of valuation remain in the discretion of the valuer. In spite of the general compatibility of valuation methods the provision for ground values has been a continuing subject of discussion among the advocates of either school of thought. The fundamental character of this aspect of valuation gives the discussion a pivotal role in the harmonisation of property valuation. In this context the author has examined the methodological and quantitative impact of the provision for standard ground value, which inherently includes the application of remaining life. The subject of analysis is the German Income Method, which represents the prominent field of application of the standard ground value. For this purpose the concept of standard ground value and its effect on property values will be introduced. The methodological analysis determines the scope and limits of conventional income valuations as well as the amount of added information, which can be derived from the standard ground value. The quantitative analysis is based on data provided by the IPD Investment Property Databank. The data supports the conclusion from the methodological analysis that ñ in view of a harmonised property valuation ñ the standard ground value does not require explicit provision for, while offering added informational value in cases of short remaining building life.|
|Storing up Trouble: The Economic Impact of Industrial Development." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||"Changes in the industrial property sector have been well documented. A decline in manufacturing industry in developed global economies has shifted the property emphasis from manufacturing to storage and from factories to warehouses. Attitudes to warehousing differ substantially between the UK and the rest of Europe. On the mainland, logistics is welcomed as an important supplier of employment. In the UK however, some planners and politicians see warehouses as somehow ""cheating"" local economies out of jobs by taking land and creating low levels of relatively poor quality employment. This paper reports on an ongoing research programme undertaken with AtisReal (Fuller Peiser) into the perceptions of UK planners to logistics and the reality of warehouse development.At the papers heart is a model that facilitates comparisons between the development of warehouses, light industrial property and factories in terms of their economic impact over a typical lease length. "|
|Strategic Pricing in the Housing Market - Can Real-Estate Brokers Influence the Market Price?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Most properties in Norway are sold through a real-estate broker, and it is the seller who hires the broker to carry out the sale. In later years the number of real-estate brokers in Norway has grown, so the competition among them has become fierce. The competition has been on both price and quality. When competing on quality, the main problem for the brokers is to find the most efficient signals. Various signals are used, for example: The individual brokerís qualifications, conspicuous marketing of properties and claims of ability to obtain higher selling prices than other brokers. The signal of ability to obtain a high selling price is the individual brokerís stipulation of asking price as an estimate of expected price. A common way of selecting which broker to hire is to let brokers reveal their individual estimate of the selling price and then choose the broker revealing the highest. This paper investigates the ability of real estate brokers to influence the selling price. The hypothesis that will be tried falsified is that some brokers are able to obtain higher than overall expected prices. The alternative is that the market operates efficient, which means that sellers using brokers stipulating a higher than expected selling price, will experience a longer time on market for their property and at the end obtain the expected price. The hypothesis is refuted and the alternative is accepted as expected by theory.|
|Structural Dynamics of the Office Sector." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper uniquely discovers the steady state as well as the general equilibrium dynamics and structure behind the case behavior of Singaporeís Central Area office sector, specifically in terms of its net space absorption, rent and capitalization (cap) rate. Domestic and foreign investors are enabled to better evaluate their decision-making in commercial real estate investing, particularly in anticipating office rents, capital values, and the risks of investing. This paper develops 3 unique and rigorous structural, expectation-augmented and error-corrected stock-flow adjustment models, under the error-correction-model approach, for net office space absorption, rent and cap rate. Model estimation for the office net space absorption achieves a good fit, with the office rental estimation achieving a very good fit, both in conjunction with the appropriate log forms and serial error correction. Inflation volatility is found to be insignificant and excluded while all other causal variables are significant in relation to the cap rate. All the models on the whole exhibit well-behaved residuals. The Akaike and Schwarz information criteria, which tests for appropriate model selection in order to strike a balance between the goodness of fit and parsimony for the key causal factors of interest, are not excessive for all 3 structural models. It is inferred through the model results that Singaporeís island-state economy is dependent on exogenous factors influencing the trade, industrial, financial and business services sectors that in turn drive the demand for the office sector island-wide.|
|Structuring Space for Non-Market Interactions in Corporate Real Estate: A Case Study." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The concept of non-market interactions, which is finding increased applicability in areas not traditionally embraced in economics, is often linked to the spatial proximity of voluntary interactants. In urban economics, spatial proximity is often equated with density. The concept of density has found its way by other names into corporate real estate as the costs of office space have increased. Since corporate office space might be considered a classic setting for non-market interactions, how can spatial proximity be analyzed in order to give insight into the problem of close-packing of occupants of office space (density)? This paper proposes that conventional concepts of absolute space employed in economics and real estate are inappropriate for the analysis of the fine-grained spatial proximity that encourages and sustains interaction within office environments. It proposes the alternative concept of relative space, and shows how it is operationalised. This approach is then applied in an evaluation of the before and after configurations a large office space of a well-known international firm. The results show how non-market interactions can be spatially structured, how these spatial structures can be measured and how these measures relate to interaction in the work environment.|
|Study on Foreign Property Ownership in Malaysia." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper is about foreign property ownership in Malaysia, focusing on Malaysia My Second Home Programme. Secondary data was collected by desk study. Primary data was collected via self administered postal questionnaires. A group of 100 participants of Malaysia My Second Home Programme were randomly selected for this purpose. The findings discovered that foreign second homebuyers are mainly those who are above 45 years old and married. Three main reasons for foreigner to buy second home in Malaysia are retirement, investment and enjoyment. Respondentís preferences were influenced by his/her age, nationality and reasons to purchase a second home. The most important criteria for the foreign homebuyer will be Warm climate, accessibility and local infrastructure, security and management arrangements, access to leisure and health facilities and cost of living. Most of the respondents preferred to live in suburban area and purchase a condominium or bungalow as their second home. There are twelve features which have been stated out by Tourism Malaysia on why foreigner should choose Malaysia as their second home destination. Generally, majority of the respondents are satisfied with the quality of house and agree that Malaysia is a good second home destination. This paper can be used as a practical and useful guide for tourists who are interested to own a residential property in Malaysia as their second home. This paper also offers help to developers and Ministry of Culture, Art and Heritage Malaysia on foreignerís preferences in purchasing their second home in Malaysia.|
|Success Factors in Shopping Centre Refurbishment - a Turnaround Management Approach." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In many German cities, aging shopping centres suffer from a decreasing competitiveness which implies declining pedestrian flows and sales volumes - consequently lower rents and declining returns. Moreover, with still unlimited development activities for new-built centres and the resulting increasing crowding out competition, shopping centre refurbishment attracts growing attention from developers, investors and city officials. The main objective of this paper is to develop practical recommendations for shopping centre owners and investors - throughout the identification of the most relevant reasons, success factors and risks in the refurbishment process. The design of the refurbishment process is based on the theory of turnaround management. As research methodology, an empirical survey was carried out in the German shopping centre industry whereby main reasons, success factors and risks of shopping centre refurbishment were derived through principal component analysis. To conclude, from an interdisciplinary perspective, the paper offers a theoretical and practical contribution to real estate refurbishment and shopping centre research.|
|Testing for Bubbles in Housing Markets: A Panel Data Approach." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||A bursting bubble in a housing market can have a severe negative impact on consumption and GDP. Hence, it is of interest to identify a presence of the bubble in a timely fashion. Existing tests often rely on the relationship between house prices and their corresponding fundamentals, e.g. rents. These tests typically employ standard univariate unit root methodology and require relatively long time series, which precludes a timely testing. We therefore combine panel data tests for unit roots, cointegration and Granger causality using shorter time span data on house prices and rents in the US metropolitan areas. For our full sample, we find that there is no relationship between house prices and rents in levels but there is one in first differences. Also, a ëbubble indicatorí, which is one whenever there is no statistical relationship between levels of our two variables, is defined and applied to overlapping ten-year periods. This indicator shows that one period of possible bubble occurred in the late 1980s and another in 2001-2003.|
|Tests of Dynamic Asymmetric Correlations across REIT Sub-Sectors." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The paper examines the inter-relationship between REIT sub-sectors based on property type. The data used in this paper consists of daily returns for the period January 1 1990 through December 30 2005 totalling 4175 observations. During this time the popularity of REITS has expanded dramatically with massive growth in investor awareness and interest focusing in on the return and volatility characteristics of the sector. Bivariate conditional correlations are estimated between sub-sectors. The results reveal a growing homogeneity in the REIT sector, with substantially higher correlations observed in recent years.|
|The Analysis of Housing Movement Preferences of Consumers in Istanbul." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper investigates the cycle of housing movement preferences in Istanbul by focusing on three basic characteristics of residential areas: (a) The housing prices (b) The life quality (c) The Socio-economic structure of the residents. The aim is to estimate filtering process in Istanbul according to the preferences of the demand side of the housing market. The survey held by Greater Istanbul Municipality in 2005-2006 and the average housing prices will be used as data to explore the correlation among housing prices, life quality and socio-economic structure of the residential areas. The results of the study may assist housing policy makers, academicians, urban planners and property developers as it displays moving and filtering preferences of the housing consumers in a dynamic city.|
|The Anatomy of Egyptian Housing System: How Far Can the Mortgage Finance System Reach?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||As Egypt enters the 21st century, affordability in the housing market continues to be one of the most important challenges that Egyptian policymakers must address. Egypt has very striking features, including high level of poverty and consequently low housing affordability by international standards. Despite the recent rapid development of housing policy and institutions, mortgage finance still shows a very limited reach since the passage of the Mortgage Law in 2001. This actually reflects the small numbers who can afford mortgages, the high cost of houses in relation to incomes and the informal nature of most title deeds in the country to mention but a few. On the other hand, contemporary housing supply policies are geared towards moving away the state from the social responsibility of the direct provision of housing. Thus, the reality of the Egyptian housing system today means that market based approaches are required to increase the provision of affordable and adequate housing at the lower-income end of the market. So, it is timely and important to assess the effectiveness of the current housing system to identify its reach and the limit of that reach. This paper sets the issue in its wider context to elaborate on the main hurdles in the current system. It then explores the relative importance of the purposes of mortgage finance in Egypt. Finally, the paper outlines a forward-looking agenda for further research to examine what needs to be done to close the gap on what would be a more comprehensive housing system.|
|The Anatomy of Speculation; a Regional Analysis." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In an earlier paper we explored the dynamics of speculation in the housing market using national data for England. We argued, firstly, that the increase, in real terms, in house prices over the past thirty years or so has been primarily driven by the shortage of land permitted to be used for development, by the planning system. This meant that the price of developable land had risen more, over all, than house prices. Thus we would expect that the price of dwellings which use land extensively, i.e. bungalows and detached houses, would have risen more than the price of dwellings which use land intensively, i.e. apartments and terraced houses. We also argued that when prices were seen to be changing during a cycle householders not already in owner occupied housing were the only ones who could ëspeculateí by choosing to buy when they saw that prices were rising and choosing not to buy when they saw that prices had stopped rising. This hypothesis was suggested by the fact that apartments, according to the national data, rose in price faster during a boom than other dwellings and fell more in the ensuing down turn. Econometric analysis tended to support both these hypotheses. From data which covered all housing transactions in England and Wales, we obtained price indices for five dwelling types ñ bungalows, detached houses, semi-detached houses, terraces, and apartments. We found that these five indices did not cointegrate, which indicated that they did not tend to converge, a finding which surprised a number of housing market economists, but which tended to confirm, or, rather, did not refute, our first hypothesis. We also found that the price index for apartments ëGranger causedí the other price indices, and that no similar Granger causative relationship existed between the other four price indices, a finding which tended to confirm our second hypothesis. In the current paper we subject the hypotheses to more stringent tests by using regional data for England and Wales. Looking at regional data we are able to explore the possible convergence or divergence of the various regional price indices, and the extent to which particular regional sectors lead others. Previous regional analysis of the UK housing market suggests that the market is led by London and the South East. Our exploration sets out to determine whether the apartments market in this region ëGranger causesí changes in all other regions, or only in the South East, and also to determine whether the apartment prices in other regions ëGranger causeí changes in other sectors of the housing market in their own regions.|
|The Anatomy of the Egyptian Housing System: How Far Can the Mortgage Finance System Reach?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|The Business Case for Sustainable Office Buildings." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Whilst the profile of sustainability has increased substantially in the wider property market, relatively little attention is placed on the business case for sustainable development. In the commercial property market this remains one of the largest barriers to sustainability. For example, a substantial proportion of the stock is owned by institutional investors who are unconvinced by the need to improve their stock and pass on running costs to tenants (Callender & Key, 1997). Capital values are not greatly affected by sustainability and owners react by doing little or nothing to improve their property assets. Other barriers include poor information and professional conservatism (Scrase, 1999); the effect is to limit sustainability related investment and undermine efforts to deliver sustainability in the sector. In efforts to improve sustainability in the built environment many previous and existing government led programmes have focused on the domestic sector, which is characterised by a large proportion of owner occupiers who have a vested interest in maintaining the capital value and condition of the property (Scrase, 2001). Much of the property and surveying research has previously adopted an illustrative case study approach advocating the benefits of ESD and energy efficiency. This research examines the business case for sustainability with regards to commercial office buildings. The attention is placed in identifying sustainable attributes of buildings that have the potential to either positively or negatively affect a discounted cashflow.|
|The Capital Structure Determinants of REITs: Is it a Peculiar Sector?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Capital structure and financing decisions have been surveyed for years and, since Modigliani-Millerís proposition, much corporate finance literature has investigated this issue across different countries, industries and business cycles. Unlike previous studies that addressed capital structure decisions, this work focuses solely on the real estate sector in the United States in order to find out the main determinants that affect capital structures and financing decisions in this industry. The primary goal is to determine whether capital structure choices for property companies are related to factors similar to those appearing to affect capital structure decisions of public non real estate firms in other sectors. Using an approach similar to Rajan and Zingales (1995) who investigated the determinants of capital structures of public firms belonging to the G-7 countries, this work explores the financing choices of a sample of 112 listed Real Estate Investment Trusts (REITs), with different investment strategies and belonging to different property sectors, during the period 2002 to 2005. The evidence suggests that more profitable REITs tend to use less debt as predicted by the pecking order theory, specific intra-industry features, such as high collateral value of asset and law requirements of a large shareholdersí base or to pay out most of before tax income, are important determinants of financing decisions. REITs investing in residential real estate assets show unique characteristics that differentiate them from all the other property companies.|
|The Carrez Law: a Law to Fight Against the Round Numbers?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The Carrez law, came into force at the beginning of the second half of 1997, binds you to precise the surface for each sale contract about joint ownership goods (for instance, a flat). As the seller usually has more accurate information about the state and the size of the apartment, a significant fall in the average surface of the housing has been observed since the second half of 1997. The fact that private housing is not subject to the Carrez law, enables us to study the influence of the law on the declared surface as a natural experience. For the block of flats in the Paris area, we estimate an average over-evaluation of 2.3m2. This implies a bias in the hedonic index estimation before the Carrez law which arises from the fact the sellers rounded the surfaces. The sellers used to round the surface to the superior multiple of 5. This accounts for the figure of 2.3% is nearly half of the difference between two successive multiple of 5. Therefore, the over-evaluation doesnít depend much on the number of rooms. However, we underline that the effect is directly linked to the age of the building. 25% of the flats were above the level of fraud of 5%. The one room flats account for half of the frauds.|
|The Concept of an Information System to Satisfy the Needs of Municipal Property Management." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
The social and economic transformation that took place in Poland resulted in the development of real estate markets with local, regional and national dimensions. A characteristic result of the communist era is the occurrence of a relatively high share of public resources in the structure of property ownership. Information possessed by the decision-makers plays a crucial role in managing this type of resources. The aim of this article is to present a concept of an information system to support the processes of managing municipal resources of living and commercial properties in Poland. The concept is based on existing, generally accessible real estate databases as well as internal government and market data. The proposed system would organize and effectively handle selling and leasing municipal property.
|The Cross-Sectional Determinants of Listed Property Trust (LPT) Returns." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
A number of studies have demonstrated the determinants of LPT returns. However, these studies investigated the determinants of LPT returns from various different perspectives. Therefore, the cross-section of expected LPT returns is still a puzzling question. This study contributes to this body of knowledge by examining the determinants of LPT returns in Australia from these various perspectives over 1993-2005. The results reveal that book-to-market ratio, momentum and downside beta provide significant explanatory power to the variations of cross-sectional LPT returns. However, the explanatory power of downside beta has diminished once the cokurtosis of LPTs is controlled. The findings provide additional insights for investors and real estate analysts into LPTs pricing.
|The Deka Immobilien Real Estate Country Risk Indicator as an Investment Guide for Emerging Markets." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In times of still ongoing further yield compression, real estate investors increasingly shift away from core investment strategies to more risk exposed value added or even opportunistic investment style approaches. This strategy often implies looking to emerging markets for buying opportunities. The recent experiences with German Open Ended Funds however show that a consistent portfolio management, supported by a top-down strategy, and an appropriate risk assessment and management is crucial. A problem in this context is that real estate performance indicators are often not available for developing markets or that information is noisy, biased and inconsistent. Therefore, investors have to rely partly on alternative assessments of real estate performance and risk. We have developed a quantitative tool (DIRECS), which collects and connects different macroeconomic and political indicators and condenses them, to country specific real estate risk indicator for over 100 countries. The tool also allows a combination of the risk indicators with income forecasts according to different investment risk styles. In this way, we generate a ranking of countries, specific to different risk-earnings-preferences. The paper describes the methodology (principal component analysis) used to construct the indicators. Some interesting lessons for real estate investors can be drawn. As an example, only few Central European Countries at the moment compensate adequately for their risk.|
|The Development of Islamic Compliant Real Estate Investment." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The past decade has witnessed the rapid growth in Islamic banking and finance market making it one of the fastest growing financial niche markets globally. According to the UK Financial Services Authority this is estimated to be worth between $200bn to $500bn worldwide. In the aftermath of 9/11 in the US, there has been significant flight of capital originating from the Middle East and other Islamic nations from the US to other destinations in Europe, Asia and back to the Middle East. This paper examines the growing importance of Shariah Property Investment funds in Europe. It considers the role of Shariah Property Funds in comparison with other international property funds, including: pension funds, life insurance funds, open-ended German funds, USA based and other structured funds, and joint venture partnerships. Within the context of Shariah property investment the paper will address the following: i. How can Shariah Investment Funds become a viable vehicle for property investment? ii. What are the main criteria for Shariah property investment funds? iii. To what extent Shariah investment funds are different to ethical investment funds in portfolio selection and management? iv. What is the extent of the activity of Shariah property investment funds in the UK? The paper will present the result of interviews with key players in the field of Islamic finance based in the UK carried out between 2004-2006. The interviews were conducted with international funds; specialist property investment companies, trading companies, banks equity and debt lenders, international consultants, asset managers, legal advisors and accountants based in London.|
|The Diversification Capacity of Property Investments: Nothing is Sure." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The common investment theory distinguishes market risks which can not be influenced and the object specific risks that can be influenced. It is acknowledged, that by increasing the number of investment objects, diversification, the risk level of the investment portfolio can be substantially decreased. Generally, diversification is also considered a valid strategy for property investments to decrease the risk level of the portfolio, but the adjustment speed and the effectiveness of diversification, expressed in a decreasing risk level, are considered less then for other investments types. In previous publications (ERES 2006), the author has expressed his doubts concerning risk reduction through diversification in case of property investment portfolios. The main points of critics were about not accounting for the managerial risk, the assumed constant market risk and the assumed object specific risk reducing effect of increasing the number of investments objects. This paper focuses on these points of critic and analyses the diversification effect for property investments. The analysis is performed on the Dutch office asset market. The results demonstrate that the acquisition policy influences the diversification effect; in some cases the common investment theory is confirmed and in other cases the risk level increases with the number of added properties.|
|The Double Four-Quadrant Approach: The Systematic Integration of Real Estate Investment in the Overall Investment Universe." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The increasing diffusion of the 4-quadrant approach (private equity, public equity, private debt, public debt) in the real estate investment opens up new questions to the theory and practise of asset allocation. Within the common top-down approach of asset allocation the question whether quoted real estate companies are to be regarded as a real estate investment or as a ìsector playî within the stock allocation is especially controversially discussed. From a traditional Finance perspective, real estate stocks are often assigned to stocks as a result of relatively high correlation with stocks and (superficially) low correlation with direct real estate investment. As a result of a fundamental economic analysis this approach is questionable. Apart from some real-economic differences (leverage, tax, etc.), which can be isolated, the underlying assets are the same within the same market segment. Due to this fact, arbitrage possibilities led to the convergence of pricing between the different quadrants. The traditional approach of asset allocation, based on Modern Portfolio Theory, has severe limitations due to difficulties in measuring risks and correlations of direct real estate investment. Therefore, I will argue in my paper that for investors with a long time horizon, the asset allocation should start with a basis decision in which degree an investment in real estate is favourable for the overall portfolio. This decision should be based primarily on economic fundamentals. Subsequently, the allocation within the 4 quadrants can be done on a second level, separately for real estate and business case (double 4-quadrant approach).|
|The Effect Large Infrastructures Imposes on Urban Development." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Procedure: The periphery of Geneva, where a section of the city bypass opened in 1993, was studied on three different levels: firstly, an analysis of the regionís dynamics as a whole, secondly, an analysis of the demographic evolution and employment market at a communal level, and thirdly, an analysis of the evolution of the man-made environment at a district level. The afore-mentioned studies permitted the computation of a model (multiple linear regressions) that describes the relationship between the changes in the man-made environment of a certain area and its accessibility. Results: The study showed that the relationship between the freeway and the urban development of the canton of Geneva was not obvious. The demographic redistribution from the city centre towards suburbia seems to have no apparent relationship with the new infrastructure. The influence of accessibility manifests on the employment location; this was observed by an increase in employment figures, higher than average, for the areas near the new bypass and city centre. These phenomena were not directly translated into building activity, as two neighbouring sectors can develop totally differently. The relationship with accessibility is not obvious. The model confirmed the perceived trends, and, revealed the importance of vacant land for building activity to exist. In other words, urban development is hampered by the shortage of available land and the other location factors become insignificant.|
|The Emergence of a Discreet Asset Class: Global Real Estate Securities." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
The paper describes the extraordinary growth and strong performance of the market. On the one hand, established securities investors in Australia, Netherlands and the US are seeking to build exposure to real estate and real estate securities across global markets. On the other, investors from Europe, Japan and other parts of Asia are also increasing their allocations to real estate, and securities are starting to become of greater interest to such investors. Beyond the strong performance of securities, these investors are attracted by a series of other characteristics. This trend seems to be a cyclical response to the high liquidity in overall asset markets rather than a fundamental challenge to the REIT market. The paper also explores the trends and prospects for the sector at a global level and in each of the major regions. Although the global market continues to grow strongly, the worldís largest market, the US, has seen over US$100 billion of REIT stock taken private over the past 18 months. This raises questions over the prospect for the continued growth of the securities market, but the report argues that this trend seems to be a cyclical response to the high liquidity in overall asset markets rather than a fundamental challenge to the REIT market. The report covers a broad range of issues in considerable detail to demonstrate the profound structural changes in both the underlying real estate markets and in the securities markets around the world.
|The Ethics of Discount Rates: What can Real Estate Valuation and Investment Experts Learn from Environmental Economics?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Because of the changes in global climate, our civilization stands before some profound trans-formations which will affect all areas of our lives. In scientific circles it is now generally accepted that a significant portion of the climatic changes is due to human activity. However, up until now two spheres that have not yet been analyzed scientifically in detail are the influence of climatic conditions on the value of land and especially the effects of climate changes on future real estate values. Within this field of research a lot of very specific aspects like the role of discounting and cost-benefit-analysis are of particular interest. This paper critically focuses on the role discount rates play in traditional cost-benefit analysis and real estate valuation. The results will be reflected against the ethical aspect of discounting the future social welfare. Pure time preference as accepted when analyzing marginal problems doesnít seem to be appropriate when it comes to non-marginal impacts, intertemporal assessment and other aspects involved when dealing with the impact of climate change and the curse of action our civilization should take to avoid irreversible negative changes. We also try to answer what the real estate industry can contribute to the internalization of negative exter-nalities and the role of discount rates in this respect.|
|The Green Value of REITs." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The concept of corporate social responsibility (CSR) and its effect on firm performance is receiving increasing academic interest. However, most of the literature excludes the financial sector and, more important, listed property funds. This is surprising, as the real estate sector has a major impact on the environment, both via the consumption of natural resources in the building process, and thereafter in daily use of the property. Prior studies have shown that more sustainable buildings can result in savings on energy and maintenance costs, health and productivity benefits as well as reputation benefits for corporate tenants. These benefits could consequently result in higher rent levels and building valuations. Therefore, we argue that a sustainability focus of property companies could be associated with a positive relationship between market valuation and operating performance indicators. This paper bridges the gap in current research by investigating this relationship, using two unique databases: the KLD corporate social responsibility ratings database and Innovest Strategic Value Advisorsí sustainability ratings. For a sample of more than 200 US REITs, we analyze the effects of CSR on operating performance and firm valuation (Tobinís Q) over a time span of 10 years, taking a special interest in solving the endogeneity issue using econometric techniques.|
|The Housing Market in Poland - a Speculative Bubble or Natural Market Adjustments?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In the recent period, the housing market in Poland has been very active. An externalization of this activity is the number of concluded transactions, growing prices of building lots, single-family houses and flats, or the expansion of developersí activities, etc. The sudden rise in the property prices must entail several questions. Are we witnessing the emergence of a price bubble that will end up in a similarly rapid downslide in the future? Alternatively, can the situation of the Polish property market be explained through the socio-economic circumstances? The paper endeavours to verify the above research hypotheses and identify the further course of events in the Polish housing property market. The paper is composed of three parts. Part one provides the statistical analysis of the housing market in Poland. Part two investigates why the property prices are on the rise. Finally, part three tries to answer the question whether the rapid increase in the property prices in Poland will maintain or perhaps they will be drastically adjusted.|
|The Impact of Feng Shui on Residential Property Prices in the West." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Ancient Chinese traditions are becoming increasingly evident in the West with the adoption of practices such as acupuncture and Feng Shui. This paper focuses on the practice most closely associated with real estate: Feng Shui. Feng Shui, meaning ìwindî and ìwaterî, makes up one of the ëEight Rays of Traditional Chinese Medicineí. Just as in the practice of acupuncture, where work is done to bring about harmony and balance in the free flow of Qi (pronounced ìcheeî) through our bodies, so in Feng Shui the practitioner works to attain the same harmony and balance in the free flow of Qi through our man-made and physical environments. The Chinese believe that the shape and orientation of a site and building, the buildingís construction materials, layout, colours, and the numbers that make up the street address can all influence the health, happiness and prosperity of the occupants. As such, the Chinese are willing to pay a premium for auspicious features (see for example, Bourassa and Peng, 1999 and Chau, Ma, and Ho, 2001). This paper outlines the results of a case study to determine if the ancient Chinese art-form of Feng Shui affects residential property prices in a Western setting. A case study approach was adopted that involved an analysis of sales transaction data in Sarasota, Florida, where a condominium high-rise building designed completely with Feng Shui principles was recently constructed. The results are insightful and provide evidence that Feng Shui impacts positively on property prices in the West.|
|The Impact of Political Transformation on the South African Commercial Property Market." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This study considers the impact that the transformation of the South African socio-political environment has had on locational decision making in the South African commercial property market. A central theme of the apartheid policy was to underpin and promote the economic viability of homelands and specific areas in metropolitan areas through a national decentralization policy and more specifically the provision of financial locational incentives. In addition, townships in close proximity to major metropolitan areas were primarily seen as ìdormitory townsî and little attention was given to the development of a vibrant commercial built environment in such locations. The result of such policies is that post apartheid South Africa inherited a specific urban form and related location of commercial properties. The central question posed in this study is whether a decade of democracy has significantly altered decision making in the commercial property sector or whether inherited trends persist. Based on historical data and case studies, the paper assesses the transformation of the built environment in the Johannesburg central business district, Soweto, and in the former homeland of Bophutatswana.|
|The Impact of Retiree Migration on Housing Markets. A European Experience." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper undertakes the economic impacts coming from a strong retiree migration towards a geographic area. The appearance of retiree migration coming from rich countries is expected to produce relevant reactions on the domestic and local economy. First of all the impact is located on the housing market, promoting the house-building, but it also contribute to other services or industries to be expanded, most of them related to the retireeís tastes or way of life. We estimate the housing prices reaction and house-building using data obtained in a project named REVIcVAL in which a significant number of retirees were questioned about their houses characteristics. We construct a pseudo-panel introducing other type of information from secondary data in order to have the needed variables to analyse the markets. Data is a municipal level.|
|The Impact of Sustainability on the Investment Environment: A Case Study from Australia and New Zealand." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Over the last few years the notion of sustainability has gained momentum within investment markets, particularly for property assets. Within the property space, much of sustainability debate has focused on operational aspects with little emphasis on investment. The aim of this paper is to assess key issues surrounding the impact of sustainability from an investment perspective. A number of the major Australian and New Zealand property investment fund managers were interviewed to assess the strategic implications of sustainability to commercial property investment. The findings provide an insight into the pricing and valuation of sustainability, how it is likely to change the investment product landscape and the composition and management of existing property investment portfolios.|
|The Impact of Urban Form on Housing Prices in Istanbul." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Istanbul is the largest city of Turkey and has a very rich urban form due to its historical and socio-economic background, technological developments and also natural amenities. The purpose of the study is to investigate the impact of urban form on housing prices since housing price is a function of internal and external characteristics such as urban form. The review of the literature illustrates that there are very few studies which investigate the impact of urban form on housing prices at the international level and they are mostly concentrated on developed countries. Thus, this paper is the first which deals with the same subject in the developing countries.In this study, hedonic price analysis is used as the research method. Several internal and external variables are taken into consideration. Typically, these external factors are grouped together under a ëlocationí variable. In the analysis, location variable is expressed as distance to the seashore, distance to the central business district and also distance to the sub-centre. In addition, building density, road surface ratio, population density, average urban block area, development index and housing prices are taken as the other variables of the analysis. According to the results of the study, the most important factors are the distance to the CBD and the building density of the establishments. As a conclusion, the results illustrates that form of the establishments has an important impact on the housing values and it is a crucial subject for the urban designers, urban planners, developers and policy makers.|
|The Impacts of Housing on Economic Development." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Housing is not just a shelter for population, but it is also an economic sector which creates direct and indirect multiplier effects on different sectors. With this respect, housing is evaluated as stimulant for economic development. Recent studies in last decade have emphasized the importance of housing for economy, finding an association between housing investment and economic growth. In Turkey, stateís policies have been changed and governments realized the importance of housing sector for economy after 1980ís. Housing sector was evaluated as employment generating and stimulant for other housing related sectors. Realizing the importance of housing for economy, governments gave the privilege to encourage housing construction and tried to facilitate housing production with legal and planning regulations. However, fluctuations of macroeconomic condition such as high inflation and interest rate, and encountering national and international economic depressions affected the housing market stabilization. Where there was high interest rate and inflation, it has been observed a fall in housing construction and this made negative effects on economic development. This study aims to put forward the relations between housing investment and economic development using correlation analysis in Turkey of which economy is growing. Using time series data from 1980 to 2005, housing is found to have strong effects on economic development similar to former studies.|
|The Increasing Acceptance of Reverse Mortgages in Australia." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In Australia the number of providers of reverse mortgages has risen substantially in recent years. It has been promoted to seniors as a means of accessing equity locked up in a residential house, especially after the owner/s has retired. Although there have been some teething problems, the concept of mortgaging the family home after achieving freehold ownership has many merits. Often an asset-rich household must survive on relatively small regular income, and is unable to access the increasing wealth of the family home. A reverse mortgage overcomes this hurdle. This paper investigates the sudden rise in demand for reverse mortgages in Australia. It identifies providers in the marketplace and reviews the types of products available. Strengths and weaknesses of this product are contemplated, and the viability of reverse mortgages is discussed. Although there are obvious benefits for certain segments of society, reverse mortgages are a unique product and caution should be exercised to ensure the public is fully knowledgeable from the outset.|
|The Integration of European and US Real Estate Markets." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||A key reason for US capital looking for investment opportunities in Europe and European capital in the US is diversification that is exposure to different economic real estate market cycles. Indeed investors seek to exploit diverse economic trends, country characteristics and property market contexts. On the other hand it can be argued that investment markets are getting more interlinked and integrated through financial market integration. This paper examines the integration of the European and US markets. In the existing literature integration is examined with a range of naÔve and more sophisticated methodologies. In the existing literature, the integration of securitised real estate markets globally has attracted more research interest given the greater availability of data in this segment of the property investment market. This paper looks at both direct and indirect real estate indices and offers useful comparisons mostly in the office sector. The focus of this paper is the long-run relationship of the US and European markets. It provides evidence on whether real estate returns form a stable cointegration relationship and estimates long-run elasticities. A stable cointegration relationship is followed by the estimation of an error correction representation. The paper illustrates the impact of long-run shocks through impulse response functions and variance decompositions. Undoubtedly investors are keen on empirical evidence in the response of European markets to shocks in US real estate markets and vice versa.|
|The Introduction of SIIQ Real Estate Investment Companies in Italy: Opportunities for Investors and the Market." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Recently, the Law, no. 296 (Budget Law) introduced a new tax regime option for joint stock companies listed on Italian market (SIIQñSociet‡ di Investimento Immobiliare Quotate),whose main activity is real estate investments. The new regime offers significant advantages for the companies and the investors: companies may opt to be taxed under the new regime. With the new law the income from the real estate activities by those companies is totally tax free. The dividends distributed to their shareholders will be subject to full taxation whereas no withholding tax is applicable on dividends of pension funds and regulated investment funds. Any company opting to be taxed under the new law must distribute to its shareholders at least 85% of its net income deriving from real estate rental activity. In order to qualify as a SIIQ, a company must meet some conditions. It must be an Italian joint-stock company, which mainly perform renting activities of properties. Real estate properties must represent at least 80% of the assets and the revenues from real estate renting activities must represent at least 80% of the income. The aim of this paper is to compare this new form of investment with other international experiences, to examine the effect that the new regime will determine on Italian property market and to study the return thresholds which the property should have to be hold in the Siiq portfolio. Moreover, the paper will look at the role of the residential sector which, with a different tax regime, can increase its presence in portfolios.|
|The Legal Situation of the Owners of Historic Buildings in Germany." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In this paper firstly an overview of the most relevant features of the German legislation on the protection of historic buildings is given. The federal state does not have the legal responsibility for the protection of ancient monuments, but the individual states of the federation. Consequently 16 different laws concerning the protection of historic buildings exist. They are principally based on two systems. The system mostly applied in the 16 German states is the ipso jure-system (e.g. Baden-Wurttemberg, Bavaria, Hesse, Schleswig-Holstein). Here the law (ipso jure) represents the basis on which it is decided whether a property is considered as a historic building. In some other states the constitutive principle is applied (North Rhine-Westphalia, Schleswig-Holstein). In these states a properties becomes an historic building when it is recorded in the list of ancient monuments. The recording in the list is of constitutive relevance and legalises the administrative act. In the following historic buildings in Germany are examined. The owners of historic buildings have various obligations. These obligations are far reaching concerning preservation and maintenance. Here the owner is obliged to take all reasonable measures. Time and again courts must decide what is considered as reasonable. In addition numerous restrictions exist concerning the use, alterations or the demolition. All things considered it can be concluded that the authority of the owner is strongly regulated. In addition recently tax advantages as the possibilities for additional capital allowance were reduced representing a further disadvantage for the owners.|
|The Performance and Long-Run Driving Forces of Securitised Property in the Australian and United Kingdom Markets." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
In a comparison between Australian and United Kingdom property markets this paper re-examines the sensitivity and importance of interest rates and stock market price behaviour on securitised property by decomposing their long-run impact between transient and permanent effects. This is achieved in a framework that accounts for endogenously determined structural breaks. The results provide a different perspective on the relationship securitised property has with these markets and sheds new light on their long-run interaction. The literature has produced mixed results on whether interest rates or stock market performance drive long run behaviour in securitised property markets. The results from this research show that, once structural breaks are accounted for, securitised property in Australian and UK property markets is driven by both interest rate and stock market changes.
|The Performance of Investment Trust of Real Estate from the Public Sector in Hong Kong." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
A plenty of studies have contributed to the body of knowledge on the performance of real estate investment trusts (REITs). Many of them have attempted to examine the inter-temporal relationship between REITs and property stocks using time domain techniques such as regression, cross-correlation, causality and co-integration techniques. Yet, almost all these studies focus on private real estate. In December 2005, the first REIT comprising commercial real estate (retail facilities and car parking spaces) from the public domain came up to the market in Hong Kong. This public REIT, the Link, forms the subject of this study which is aimed to investigate the performance of public REIT. It is anticipated that public REIT performs more or less the same as other stocks of utility companies because both are heavily reliant of income generation rather than capital gains, which are subject to certain institutional constraints regarding their investment strategy. Overall, the findings from this paper are supportive of the proposition that public REIT return index are linked strongly with utility stock return index, although weak link is also found between REIT return and property stock return. However, the public REIT has just been launched for less than 2 years, when more information about the performance of public REIT is available as the market of REITs becomes more and more mature, the REIT-utility-property linkage may change.
|The Preliminary Study of Effects of Flexible Time System on Commuting Time Choice and Scheduling Evaluation." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
In order to satisfy family daily needs, people will devote their efforts to get wages and exchange them for commodities and services in markets. Consequently, work becomes a primary activity of household heads on weekdays. If the work starting time is fixed, the commuting trips will be concentrated during peak hours, resulting in traffic congestion. Congestion will result in traffic accidents, air pollution, noise, and higher travel cost (time) and will make workersí quality of life worse. This study proposes that a ìflexible time systemî will have strong effects on workersí ìwork starting time choiceî and ìcommuting time choiceî. Furthermore, workersí ìschedule evaluationî will be affected by ìwork starting time choiceî and ìcommuting time choiceî. Therefore, the commuting time will be changed if work starting time becomes flexible. Consequently, traffic congestion at peak hours will be diminished. In other words, workers can arrange their daily time more efficiently and get higher utility from their schedule evaluations under a flexible time system. From the viewpoint of schedule evaluations, the commuting time choice model under a flexible time system will be established. The stated preference method will be used to evaluate the effect of a flexible time system. Finally, the results can be viewed as a practical suggestion concerning travel demand management for planners.
|The Preliminary Study of the Relationship between Tenure Choice and Dwelling Type." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Tenure choice and dwelling type choice are two important parts in decision process of housing demand, and both of them are closely connected. Most of studies focused on tenure choice and ignored the relationship between it and dwelling type. The other few studies still canít explain decision process and meaning of housing demand of households. Nowadays, Logisitc regressions are commonly used to model decision process of housing demand, but the models are controversially inadequate and restricted. Therefore, multinominal logit model and nested logit model can be used to model joint choice of tenure and dwelling type, and the inclusive value which provided from nested logit model can be used to identify the decision process of housing demand. This study tries to model housing demand and to discuss the relationship between tenure choice and dwelling type choice.
|The Profile of Executive Real Estate Education: Results from an Empirical Study." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The presentation deals with the postgraduate course real estate which has been running at the ebs real estate academy since 1990. After the move to the University of Regensburg the identical program is now offered by the newly found International Real Estate Business School. With about 3000 graduates this part-time course has been very well accepted by the real estate education market for executives. A questionnaire was sent to the graduates of the PGC real estate. The expectations of the participants before the start of the program were compared with the experiences of the graduates. The results of the empirical survey give guidance how executive real estate education should be structured and indicate future trends.|
|The Real Estate Cycle and the Distortion of Hedonic Price on the Residential Sector: the Case of the City of Bordeaux." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper investigates the links between cycle studies and hedonic approach that is to say the existence, the nature, and the scale of a possible distortion in the valuation of the attributes of housing during the cycle. Such a distortion is obviously a source of error in the decision-making of the investors vis-‡-vis the calculation of the returns and the risks of the real-estate sector. Two working hypotheses will thus be tested. On the one hand the real-estate cycle affects the weight of the attributes revealed by the hedonic approach in the calculation of the lump price of the housing. On the other hand, these distortions depend at the same moment on cyclical and hedonic factors. The choice of the city of Bordeaux as a field of study justified by the scale of the cycle between 1992 and 2005, and to the availability of information about the transactions (except new and public housing) in the data base of the DIA (notary registration). The chosen method is quantitative and uses OLS on values transformed to facilitate the comparison with the previous works.|
|The Real Interest Rate Effect on the Price Elasticity of House Supply." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||A dramatic fall in the annual rent to house price ratio and long real interest rates during a period of relatively static real rents in the UK suggests that the stream of future imputed rents became discounted at successively lower interest rates from 1995 onwards. This paper argues that the decline in long real interest rates over this period likely contributed not only to rising house prices but also to the inelastic supply response. We develop a simple algebraic model that demonstrates how the price elasticity of house supply is lower when interest rate movements (rather than demography or income changes, for example) cause the change in house prices. Our empirical results show that a fall in the long term real interest rates significantly increases the annual growth rate in residential land prices. It is this increased cost of land ñ and hence the cost of building a house ñ that depresses the price elasticity of supply.|
|The Relationship between Private and Listed Office Investments." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper examines the relationships between private and listed real estate performance in a novel manner, using international data for one single real estate sector, offices. The fact that property companies are nearly fully invested in real estate should result in a high correlation between their returns and the development of the underlying property markets. We test this proposition across countries and over time. The issue whether publicly listed real estate performance coincides with the behaviour of the underlying private real estate markets has been at the heart of the real estate literature for several decades. We will add to this literature by extending the scope internationally, while concentrating on one single sub-sector based on quarterly data over the years 1984-2006. By the end of 2006 no less than 108 real estate investment firms specialized in office real estate were traded publicly at Stock Exchanges around the globe. These firms offer us the opportunity to isolate the relationship between their stock performance and the returns that were yielded on the office markets they invested in. Previous studies have analyzed the relationship between direct and indirect real estate investments on an aggregated level, which might distort the relationships due to differences in market allocations across the sub-sectors. Given concerns related to the available data in empirical research we apply various statistical filtering techniques to correct for the effects of smoothing, leverage, and stock market sentiments on a unique data sample that covers office markets from three different continents.|
|The Risk Net: A New Approach to Risk Analysis and Portfolio Management in Housing Companies." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||To reach their corporate goals housing companies have to recognise, assess and control risks both on a strategic and on an operative level, and to make use of the chances offered, respectively. This is the general purpose of risk and portfolio management. The overall risk of real estate is defined by a complex structure of single risks. To monitor and to control the overall risk efficiently it is necessary to have knowledge of the concurrence of the single risks. Taking the effects between single risks into account so-called ìRisk Chainsî evolve. Focussing the overall property risk the risk chains form a so-called ìRisk Netî. For further analysis the single risks can be categorized as ìStarpointsî, ìmostly internally affected Midpointsî, ìmostly externally affected Midpointsî and ìEndpointsî, depending on their position in the risk net. The paper presents an utility to analyse and assess Risk Chains. The knowledge of coherencies between single risks enables the risk management to identify driving forces and to implement an efficient early warning system. Additionally it becomes possible to forecast the future development of the building stock for various scenarios within the portfolio management, for example for modernization, maintenance or omissive strategies, and to assess the effectively of regulative measures.|
|The Risks of Flooding: A Very British Dilemma." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Britain may be unique in its tradition of flood insurance which is taken out as part of a much wider coverage of risks to commercial and residential buildings, and it is usual for lenders to require that purchasers of buildings take out and maintain insurance cover to protect the value of their assets. Several issues are affecting the insurance industryís perception of the risks to flooding in England, including the government-led drive to construct 200,000 dwellings within flood-prone sites, and, with the effects of climate change promising more severe storms and increased rainfall in the UK. There is a very real probability that, in certain locations, flooding will cease to be an insurable possibility and become an uninsurable probability. This could have huge implications for the property market in the UK, as well as for the perceptions of and reliance on insurance as a normal part of the property occupiersí protection of their asset value. This paper will report on on-going research into how the need for more dwellings in areas at risk from fluvial or estuarial flooding could impact on flood insurance cover in the UK and the responses of the British government, responsible authorities and the insurance industry and discuss to what extent the property industry can help to reduce the exposure of dwellings in flood-prone areas.
|The Role of European Infrastructure in Investment Portfolios." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||"Recent attention has been given to ""property-related"" assets to provide enhanced returns in an investment portfolio. As such, infrastructure has taken on increased investment importance in recent years. The purpose of this paper is to assess the significance of European infrastructure in a portfolio, with the infrastructure sub-sectors of toll roads, airports and ports also assessed. The risk-adjusted performance analysis and portfolio diversification benefits of European infrastructure over 1990-2006 will be assessed; benchmarked against the performance of the other major European assets. The strategic investment issues for infrastructure in a portfolio will also be identified."|
|The Role of Leisure Property in Portfolios." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Recent years have seen property funds give increased attention to the emerging property sectors as a potential source of enhanced returns. In particular, leisure property has figured prominently, including a diverse range of leisure/entertainment property types such as pubs, theme parks, marinas, bowling centres, theatres and tourist parks. The purpose of this paper is to assess the significance of leisure property in a portfolio. The risk-adjusted performance analysis and portfolio diversification benefits of leisure property in Australia over 2000-2006 will be assessed; benchmarked against the performance of the other major asset classes. The strategic investment issues for leisure property will also be identified.|
|The Role of Property Manager in creating the Value of Commercial Property in Poland." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The commercial property management should lead to the propertyís owner strategic goals realization. Two typical goals are optimization of the propertyís operating incomes and maximize propertyís value over time. Both these tasks are being carried out by the property management professionals, who take care of the property.The paper first provides an in depth analysis of the factors influencing the commercial property value on the Polish market with main focus on the biggest cities. The analysis provides a list of hints for the commercial property managers to optimise the level of operating incomes and to keep fair and steady growth in the property value. That, in turn, leads to the ownerís strategic goals realisation.|
|The Role of Service Quality of Property and Facilities Management Companies in Commercial Property Value: A Proposed Conceptual Model." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|The Role of Specialization for the Management of and Investment into REITs: A Sector and Performance Based Analysis." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Corporate focus, variously described as specialization, diversification or core competency ñ and the associated costs and benefits ñ is one of the fundamental and most discussed issues in business administration. Although the subject has been investigated by various researchers for real estate investment trusts (REITs) on an aggregate level, the findings regarding specialization or diversification strategies and performance within the REIT arena as well as the role of REIT (sub)sectors in single- and mixed-asset portfolios remains inconclusive. Because investors increasingly base investment decisions into real estate on performance measurement, professional evaluation of fund strategies and the issue of (out) performance have noticeably gained importance in the recent past. This development is underscored by the growing importance of real estate as an asset class in respect to Ä42 billion actually allocated to global real estate investments with a buoyant tendency. Furthermore, the ascending competition in the asset- and wealth-management industry as well as the question of performance-based pay of investment managers made the issue of (out) performance and management strategies regarding focus or diversification a fundamental topic on the agenda of investors and asset managers. Drawing on the results of the 2005 fund manager survey, managers are evenly spread when it comes to the focus of future vehicles. Even though evidence indicates that investors clearly plot an indirect route for new vehicles, manager in Europe struggle to meet investors¥ demand for sector focused vehicles. On the contrary, REITs in the U.S. offer investors the possibility of investing in selected property types and regions. Although various studies have demonstrated the intuitively appealing benefits of property type specialization for public real estate firms, there is only moderate consensus on an optimal strategy and the related empirical research remained indecisive. In particular, the linkage between the degree of specialization and knowledge as a determinant of superior performance is unclear.|
|The Role of the Property Information Centre as a Think Tank to Safeguard the Property Industry and the Public." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper describes property markets in Thailand before the 1997 crisis to 2007. Recent market movement are summarized as of early 2007 in order to grasp the nature of the boom and bust periods of property and the surviving developers and investors. Several warnings prior to the crisis is reviewed and are hard facts that beneficiaries involved tend to ignore the warnings. Lessons and experiences learnt are also elaborated in order to help avoid crisis in the future. Normally, after a crisis, some major adjustments and some structural changes are needed to pave way for a better guided and more favourable developments in the future. Data is proved to be available but the issue is how to deal with it as an efficient warning system and how to make an information centre as a think tank to safeguard the market and the public at large. One thing that should be done is the Property Information Centre - an intelligent unit as a public research arm. This would be a very powerful government apparatus to help prevent failure in the future. This paper is thus to deal with how to materialize this apparatus and its possible roles on forecasting, monitoring, information providing and training.|
|The Significance of Building and Location Characteristics for the Economic Performance of Office Property: A Delphi Approach." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
In all markets quality and revenues are considered to be connected. In the field of real estate, the ìqualityî of the location is considered a particularly influential factor for the realised rent level and asset price. The office space user preferences concerning location characteristics, which are expressed in the implicit price paid for these features, have been extensively analysed. In contrast, the office property features that relate to the physical office building have received less scientific interest. It is reasonable to assume that not only the quality of the location matters, but also the features and the associated quality level of the office building itself. Market reports about obsolete office buildings have highlighted the significance of office building features. An office building can become obsolete, and remain vacant, because its features do not meet current occupiersí requirements. In less extreme cases, occupiers derive less utility from the office building and are willing to pay less. This research focuses on the office space user preferences that relate to the office building features and in a lesser degree to the characteristics relating to the location. Which building and location characteristics contribute to superior performance of office property? Whereby, superior performance is considered to be expressed in high rent revenues per square meter lettable floor area. Based on former research, characteristics are identified which are included in the study. Henceforward, a Delphi panel approach is employed to rank the building and location characteristics according to their significance for the occupiersí value judgement.
|The Spatial Submarkets of the Helsinki Metropolitan Area Office and Retail Markets." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The purpose of the article is to study retail and office submarkets of Helsinki Metropolitan Area (HMA). Resulting structure of submarkets in HMA, serves for more thorough analysis in order to find out reasoning behind the development of successful submarkets. The data used in the research consists of rental and spatial data. The spatial data includes information about business places (business register consisting about 150,000 business places), population and traffic in HMA. The rental data is collected by Institute of Real Estate Economics (KTI) and includes recent rental agreements made in HMA. The methodology used in the research combines Geographical Information Systems (GIS) and traditional statistical analysis. GIS is used for analyzing the structure of the submarkets in HMA and traditional statistical analysis are employed to get significant determinants of successful submarkets in office and retail markets. The analysis are carried out with density operators and local Moranís I cluster analyses on business places. This indicates where the different activities are concentrated on the metropolitan area. After the analysis of the submarkets on the city level, certain submarkets have been chosen to be analyzed in detail. This indicates what kind of companies and activities have been located on same areas and what kinds of features attract companies to certain areas in the case of HMA. The features that attract companies have also been analysed via interviews of managers who make the locational decisions in different companies.|
|The Structure of Housing in Urban Settlements." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Urban settlements can be characterised by a rent gradient which implies high rents on central lots. This will induce households who prefer to live at central locations to economize on land. At central lots households are therefore likely to live in apartments, while they at non-central lots closer to the urban fringe are more likely to live in detached houses. Within the model of an idealised monocentric city this can be shown to imply that the share of households living in detached houses will be smaller the larger the city is. In a topographically more complex city, the relationship between city size and the structure of the housing market is likely to be influenced also by the availability of land for housing. The less land there is available for housing, the smaller the share of detached housing is likely to be. Finally, the larger the share of single person households is, the more households are likely to live in apartments in block buildings. We use data for Norwegian urban settlements with a population above 10,000 for estimating a system of equations explaining the share of detached dwellings, apartments in block-buildings, etc. The empirical results show that size of the settlement and the share of single-person household have a strong impact on the structure of housing, but some settlements deviate substantially from the general pattern. We discuss why such deviations may occur, and argue that the results may be useful in urban planning and development.|
|The Synchronisation of European Office Cycles." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The idea of the European Union is to achieve greater harmonisation across member states through a common monetary policy, more trade in goods and services, freer capital markets and more labour market integration. These ingredients are expected to make the countries more similar with respect to the business cycle position they find themselves in. After all this is the prediction of Mundellís optimal currency area theory. This raises the question of whether the closer economic integration among European Union countries, at least in the sense of Mundellís theory, have resulted in more synchronised real estate cycles in the European Union. Higher degrees of real estate cycle synchronisation have notable portfolio implications. The most important one is that the synchronised markets are subject to common shocks and the response will be similar to international economic or financial market shocks. This paper provides empirical evidence on office cycle synchronisation in core European countries and assesses quantitatively the current state of office cycle synchronisation between countries (markets). The analysis goes a step further and compares the degree of synchronisation in the office cycles and business cycles in the selected core EU countries. The measures of synchronisation in this analysis are drawn from the relevant economics literature. The key tasks to assess synchronisation in this paper are: testing the significance and time invariance of rolling correlation coefficients, computing cyclical indices, estimating persistence and calculating impulse response functions.|
|The Valuation System in Belarus: Standards, Conception and Regulation." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
"The valuation system development was started in Belarus in 1992. Over the last fifteen years, the amount of valuations has increased rapidly due to the fast development of the Belarusian property market. Today the major clients for valuations are banks, enterprises, owners and investors; and the most commonly assessed value is the market value. But only 2006-2007 can be considered as the years when valuation system got legal and systematic background. The main documents, adjusting valuation activity in Belarus, are the Decree of the President of the Republic of Belarus ? 615 from October 13, 2006 ""About valuation activity in Republic Belarus"" and confirmed by Decree Statute ""About valuation of the cost of a civil rights objects in Republic Belarus"". In accord with the decree it has been developing the Belarusian valuation standards, system of attestation of valuers and ctr."
|Time-varying Elasticity of Housing Prices with Respect to Construction Costs Contact Author:." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Price of a dwelling consists of the physical structure together with the value of land upon which the house is build. Similarly, the growth rate of the price of a house is the weighted average of increase in the value of the structure and appreciation of land. The price of the structure is typically measured as the replacement cost of the physical building. In empirical analysis the volatility of replacement cost is typically catered for by construction cost index. Land, in turn, is the factor that makes a house worth more than the cost of putting up a new structure of similar size and quality on a vacant lot. In general, urban land prices are expected to be more volatile than the construction costs. In particular, in a growing metropolitan area it is expected that land price level grows faster than the construction costs. Therefore, it is expected that the elasticity of housing prices with respect to the construction costs is time-varying. Nevertheless, the changes in the elasticity and their implications have not been considered rigorously in the previous empirical literature. This study applies smooth transition regression model to allow for time-variation in the elasticity of housing prices with respect to the construction costs and employs quarterly data over 1987-2006 from Helsinki. The analysis gives information about the share of the value of land of the total value of housing in the area. The findings are of significance for the predictability of housing prices and of housing price volatility.|
|Towards a Methodology to Determine the Size of the Commercial Real Estate Market." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In most developed countries, no current complete inventory of the size of the commercial real estate (in terms of sq ft or value) market exists. While the investment is real estate is large, it is not a category tracked by most governments, except possibly in terms of ìflowî through building permit data. The localized nature of the real estate market makes collection of data regarding the size of the market more difficult. This study discusses the difficulties involved in finding data rated to physical size and value of assets in various categories of commercial space in Canada (hotels, multi-residential, seniors housing, office, retail and industrial). It examines existing data tracked by commercial brokerage, consulting and other private sector companies and assesses the comparability of the data among different suppliers. It also examines the possibility of using market value assessment data as a proxy for value estimates for the size of the market and how these values compare to those derived from market data on average prices or rents per sq ft. The resulting numbers are also compared to the proxy estimate for value based on GDP developed by Liang and Gordon (2003) to assess the validity of their relatively simple method in this market.|
|Transaction Costs, Conveyancing Services and Markups: Entry and Competition for the German Notary Profession." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The purpose of this paper is to analyze the entry effects on competitive conduct (markups) for German notary profession that only deals with real estate transactions. I address three issues. First, I show empirical evidence of positive relationship between legal fees (transaction costs) and regulation level on the conveyance profession. Second, I estimate the entry impact on the current competitiveness in Bavarian notary profession: I estimate the markup reduction of additional firm entry using the Bresnahan-Reiss Ratio. Lastly, I analyze the effects of lowering the markups on the number of existing geographical notaries. The main results can be summarized as follows. First, I show a positive statistical evidence between conveyancing fees and regulation level for Germany. Second, I find that entry does affect conduct in the notary market. Empirical results indicate that the current Bavarian notary profession imposes net markups in the range of 53 to 116 percent over the competitive benchmark. Third, the geographic coverage would not decrease significantly if the net mark-ups were to be lowered: A large reduction in net mark-up is met with a slight decrease in the number of geographic districts that are covered. For example, if the net markups are reduced by 10, 20 and 30 percent then the number of geographic districts covered would decrease only by 1, 3 and 4 percents respectively. Consequently, this paper does support the argument for a geographic entry restriction with high markups to ensure a high geographic coverage.|
|Transaction Costs, Liquidity and Social Capital: The Role of Intermediaries in the Acquisition of Commercial Property Assets." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|Transparency of Real Estate Market in Estonia." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Time after time, at least since 2001, there has been a lot of discussion about the real estate market failure in Estonia, where all kinds of analysts have been trying to predict a bubble, bursting quite soon. Although this kind of discussion is not new, it is obvious by now, that the situation in real estate market is a little bit changed compared to some previous years. Rapid growth in prices in real estate market during the last six years may not hold in conditions, where interest rates are increasing and the capital inflow to the market is falling. In such conditions it is not surprising that market players have started to turn the attention to other alternative ways in order to maintain and improve the gained position among investors in real estate market. One of these ways could be to improve the transparency of national real estate market. The aim of the paper is to identify, what determines the transparency of a market in real estate sector in Estonia. To achieve the aim, the following research tasks have been set up: 1) to define the concept of transparency; 2) to describe and compare the elements and criteria of transparency of different institutions (transparency on governmental, banking and corporate level); 3) to identify and explain the dimensions of transparency; 4) to find out the ways of measurement of real estate market transparency; 5) to draw conclusions for real estate market transparency in Estonia.|
|Trends in Near-Emerging Real Estate." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Real estate is highly affected by development and economic stability of emerging and developing economies. While this is a characteristic commonly expected in emerging markets, real estate values and investment in volatile emerging markets are not clearly understood. This paper explores trends in real estate in Iran and tries to link real estate values with main economic indicators.|
|Trends in the Local Housing Market: The Effects of Urban and Population Growth." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Population and economic growths are two main indicators of real estate market. Positive growth in household and rapid urbanisation has several significance implications for housing market especially at the local level. First, demographic mobility is likely to create strong demand for housing. Secondly, rising population and migration will cause serious housing problems especially demand for affordable housing. Petaling Jaya (PJ) is well known as the satellite city of Kuala Lumpur, the capital city of Malaysia. The primary reason for the establishment of PJ was to alleviate the increasing congestion of Kuala Lumpur. Today, PJ has become a city that symbolises the progress and prosperity of the State of Selangor. However, over the last few years there has been a marked increase in the development of medium to higher-class housing. We conducted surveys and analysed the attributes that contributed to the household growth trends and causes of migration into this area. Future household growth is expected to significantly impact demand for residential housing units. An overview of the latest trends of PJ housing market, as well as, estimates of the demand for different types of housing and potential target markets is also presented.|
|Trends in US, EU and Australian Commercial Mortgage Backed Securities." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The paper explores some basic characteristics of US, EU and Australian Commercial Mortgage-Backed Securities (CMBS) markets and outlines similarities and dissimilarities in the three regions. The CMBS market has been one of the fastest growing asset-backed securities classes. Record issuance increases have been recorded in all the three regions since the beginning of the 2000ís. Whilst the US been the market leader in terms of issuance volumes and diversity of asset classes backing the issues, the other two regions have not lagged behind and are beginning to implement deals which have long been established in the US. Conduit/fusion type transactions are beginning to be undertaken in both EU and Australia. In all the regions floating rate notes are dominant and spreads have been tightening, making CMBS more attractive as a funding source. Performance of the global CMBS market has been good buoyed by the general stable or modest property market performance reflecting steady cash flow growth and occupancy trends. This is evident in the number of CMBS credit rating upgrades outstripping downgrades.|
|Trick or Trade: An Examination of Cognitive Illusions Embedded in Real Estate." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||We explore the possibility that illusionary components in prices trigger cognitive illusions in real estate markets, which can affect the significance of the informational content of prices. Under this new illusionary paradigm we build up a model where we assume that the price of a security (e.g. the IPD index) is given by two components: A fundamental value, and an illusionary adjustment which is trigger by the illusion of validity and the illusion of control, and is reinforced by the clustering illusion. The illusionary components embedded in the prices produce a series of emotes in financial markets, units of emotion, which represents the smallest impulse of emotional reactions. In other words, the illusionary components mislead investorís sentiment, making traders become more influence by emotions and fears. Moreover, when these emotes are îhappeningî in a short space of time they create a cascade of feelings that develops into an emotional habit forcing traders to desperately find a way to control the situation and/or find a subjectively convincing explanation about what is happening. We test our model using different real estate indexes and databases, showing that illusions have a significant impact in European real estate markets. This interesting result not only shows that illusions should be taken into account, but also helps us to a better understanding of price dynamics and bubbles in real estate markets|
|Understanding Commercial District Development in Guangzhou: A Real Option." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper uses the concept of real option to match and explain some of the observed behaviours in the NPRC development program in Guangzhou with reference to office supply. The observed supply lag and the persistent use of residential property for office space in inner-city areas are examined, with the focus placed on the role of the state as the land owner with control over the progress of the large-scale inner-city property development program (i.e. the new CBD development program). This study offers an alternative insight into the development behaviour of Guangzhouís new CBD in the economic transition, linking state-led land release and management policy with the behaviour of the development industry, which has an overall effect on the commercial property cycle in Guangzhou. The state not only considers subject developmentís best market value (e.g. maximised NPV) but also considers the balance among different commercial centres in the city. In a less competitive market system like this, it has the opportunity to achieve higher operational efficiency, but also has the potential to lead to more wasteful use of land and financial resources. It is hoped that by using OVT and undertaking specific adjustments to reflect the ëreal lifeí scenario in China, there is an opportunity to optimise land value and land market efficiency in commercial districts as well as neighbourhoods such as a mix-use sports precinct. Accepting this as a serious issue is the key to effective policy-makings which is important at the early stage of the economic transition.|
|Understanding Flows into Open End Real Estate Funds." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Open end real estate funds are the prevailing German retail product for commercial real estate investment. Yet, relatively few empirical studies explore the distinct characteristics of this asset class; almost no evidence exists with regard to flows. Looking at aggregate and individual fund flows we try to better understand investor behaviour and assess whether some well established facts from the mutual fund-flow literature apply also to open end real estate funds. We analyse the interrelation between flows into open end real estate funds, equity, bond and money-market funds. We also look at individual fund flows and ask to what extent investors are sensitive to fund characteristics and past performance.|
|Understanding Institutional Change in the Dutch Retail Market: A Property Rights Approach." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Contrasting with European trends, the Dutch national government decided in 2004 to change its protective retail planning model in a new much more liberal model and to leave it to the regional authorities to decide on the future of the Dutch retail landscape. The (unexpected) result of this institutional change seems to be the unbridled increase of peripheral retail developments, potentially taking a massive amount of trade away from existing retail locations. In response, the regional authorities decided in 2006 jointly to reinstall the main elements of former national retail planning policy. However, the effectiveness of the return to this protective planning ideology seems doubtful, due to the irreversibility of a substantial part of the current developments on the retail market. These developments call into question whether it would have been possible to ëpredictí, by some kind of ex ante policy evaluation, the impact of the shift in retail planning ideology on the functioning and the outcome of the market for (peripheral) retail development in the Netherlands. This paper investigates the usefulness of the application of property rights theory to analyse systematically the effects of institutional change at the Dutch retail market. The Dutch retail planning case serves as an example for a more general discussion about the use of property rights theory in a normative way to evaluate the potential impact of institutional change on land and property markets.
|Urban Dynamics and Real Estate Markets in Chinaís Second Tier Cities." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
|Urban Management: A Value-Based Approach for Spatial Planning." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||In the real estate development process are several key actors involved who have different conceptions of how and which kind of value within real estate projects is to be obtained. Architects focus on the aesthetic quality of buildings and define value as contribution to the cultural uniqueness of areas. Urban designer judge real estate projects by their functional contribution to the master plan of urban development. Investors and developers however are particularly interested in a high cash flow over the entire life cycle of properties. The diverse disciplinary backgrounds and objectives of these key actors lead frequently to conflicts in the development process and hinder the public permission of real estate projects. Urban management as a new approach for spatial planning shall contribute to the overcoming of the linguistic and conceptional confusion which is inherent in the real estate development process. Key idea of the urban management approach is the maximization of the land value of an outlined area as central indicator for the well-being of the inhabitants and other users of space. As e.g. the aesthetic quality of buildings and larger areas as well as the quality of the public infrastructure are reflected in the land value, this indicator allows managing not only the economic but social and aesthetic betterment of a certain area. Therefore, the public welfare could be better served by an urban management approach than by the more traditional, prohibitive approach of spatial planning.|
|Urban Renewal of Panel Housing Stock in Czech and Slovak Republics: Problems, Challenges and Sustainability Issues." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Substantial part of the housing stock in Czech and Slovak Republics is located in panel multifamily neighborhoods. There are the problems with housing stock conditions and surrounding environments (missing parking places and garages, urban congestion, low attractiveness of the neighborhoods, etc.). Fortunately the social structure of these neighbourhoods represents in most cases the healthy population mix, however this may change in future. Although the important steps have been undertaken in last years to ameliorate the living conditions in these areas, the overall situation has not improved radically. The paper analyses the reasons, why the progress in this area was relatively slow, while taking into account the existing and possible new institutional and financial arrangements. It means therefore that the new innovative and sustainable solutions for these neighbourhoods has to be implemented (such as PPP projects, solution of institutional issues, rooftop extension retrofits, etc.)|
|Vacant Land and Vacancy Rates." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This paper focuses on the influence of governments on the land supply of commercial property, especially offices, in relation to the optimal vacancy rate. The primary goal is to clarify the different approaches and the effects of (non-) interventions. Mostly land policy is seen as an exogenous variable. The paper outlines the results of active policy interventions for office markets. Recently research has established that there is a significant relation between the natural vacancy rates and the supply of land at the office market in Singapore to support economic development in general. Singapore has a highly sophisticated and integrated set of land policy instruments based on an extremely high public ownership. Whether the supply process is carried out by a public body can affect the volume of production, and hence the price of land and real estate. Empirical results show that governments plan their land sales programmes to influence the economy. This raises questions about the situation in cities in other countries where the government plays a different, less important role. The comparison is based on five cities. The cities collected in this comparative research are selected on their upper laying welfare state typology that is based on research of Esping-Andersen (1999).|
|Validation of Residential Property Automated Valuation Models (AVMs): Recent Experience in the US Mortgage Industry." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The US housing sector is the largest market for real estate valuation models, generically known as Automated Valuation Models (AVMs). The mortgage industryís increasing rate of adoption of these models, however, has not been matched by a disciplined approach to model validation. A three-stage AVM testing and validation approach is recommended. Emphasis should be placed on evaluating data sources, modeling techniques and analysis of the test results in a proper statistical context.|
|Valuation as a Part of Core Knowledge in Real Estate Education." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Property involvements in the global and European context change the curriculum content of traditional real estate education. Among these changes it is most important to formulate a core knowledge, i.e. capstone courses which are obligatory for all real estate professionals involved in the field of property and land, surveyors, or investors, developers, valuers, brokers, and managers. Every property decision in property process reflects the value of the multiple property interests. That is why one of essential parts of core knowledge in real estate is real estate valuation. Subject Real Estate Valuation it is useful to teach for two years in the middle of any property/real estate course. First year can be dedicated to theoretical aspects of valuation, including financial mathematics and some part of mathematical statistics. Second year study provides education in the main aspects of property valuation. It can be done on the base of International Valuation Standards by teaching methodology of three standard approaches to real estate valuation: cost approach, income approach, and comparative one for main different types of property, as well as methodology of their reconciliation.|
|Valuation Errors Identified from State Appraisal Boards Enforcement of USPAP." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This research studies how uniformly appraisers have been regulated in different states of America from a sample of over 500 appraisal disciplinary cases filed between 2005 and 2007. Errors that have led to regulatory discipline are identified and classified. During the 1980ís U.S. thrift industry was deregulated; this coincided with over $75 billion in losses due to failed loans and fiscal mismanagement. Congress pointed to moral hazards associated with a largely unregulated appraisal profession that may have contributed to a massive failure of mortgage loan underwriting process. Congress passed the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) of 1989 to mandate state licensing and certification for appraisers associated with federally related transactions. To implement this law a federally authorized entity, The Appraisal Foundationës Appraisal Subcommittee (ASC) has promulgated the Uniform Standards of Professional Appraisal Practice (USPAP). State enforcement of USPAP has been every uneven. Based on data from the GAO Appraisers Database Summary Statistics 10/31/02 disciplinary actions range from New Yorkís 0.08% of its appraisers to Oklahomaís 50.84% of its appraisers. This means that an appraiser in Oklahoma was 635 times as likely to face regulatory sanctions as one in New York. In this study errors are classified and analyzed. The findings of this research include errors at are considered serious in some jurisdiction but de minimus in others. Suggestions are provided on how the profession can reduce unnecessary errors in meeting the requirements of USPAP.|
|Valuation Uncertainty: Common Professional Standards and Methods." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Valuation is the process of estimating price in the market place. Yet, such an estimation will be affected by uncertainties. These input uncertainties will translate into an uncertainty with the output figure, the valuation. The degree of the uncertainties will vary according to the level of market activity; the more active a market, the more credence will be given to the input information. In the UK at the moment the Royal Institution of Chartered Surveyors (RICS) has considered ways in which the uncertainty of the output figure, the valuation, can be conveyed to the use of the valuation. The current requirement is for the valuer to ìindicateî to the user of the valuation any ìmaterial effectî of uncertainty on the valuation figure provided. However, an indicative survey of valuers around the UK shows that only a fraction of the profession is following these guidelines as they feel that is lack of clarity. One of the major problems is that Valuation models (in the UK) are based upon comparable information and rely upon single inputs. They are not probability based; yet uncertainty is probability driven. In this paper, I discuss the issues underlying uncertainty in valuations and suggest a probability-based model (using Crystal Ball) to address the shortcomings of the current model and to develop common professional standards and methods for measuring and expressing valuation uncertainty.|
|Value Creation and the Impact of Corporate Real Estate Assets." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Managers should invest in assets (i.e. relevant profitable investments) that maximize the value of their firm. Recent trend shows that many large companies have sold or outsourced corporate real-estate assets. The underlying motives for such behaviour are yet to be examined (at least in a French context). If real-estate matters, we should observe an association between proxies of value creation and the change in real-estate assets within a company. This paper investigates the association between surrogates of EVA and MVA generated by French listed companies and the weight of real-estate in their assetsí portfolio. Using a pool sample composed of the SBF 250 companies ñ over the period 1999-2004 ñ our empirical results show that, an increase in the proportion of real-estate assets (over total assets) is negatively associated with EVA, but specifically for firms in the service industries exhibiting low real-estate intensity. The regressions on MVA show a negative association with the change in the real-estate for firms outside the service industries. Those results suggest the sales of real-estate assets can be driven by value maximizing behaviour.
|Voice and Dollar: An Empirical Study of the Correlation Between Environmental Complaints and Residential Prices in Hong Kong." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|Voluntary and Imposed Racial Segration Zoning: A Coasian-Olson Hong Kong Comparative Empirical Study." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||The thesis applies the Coase Theorem (Coase 1960) as interpreted by Cheung (1990) and Lai and Hung (2006), and Olsonís Group Theory (1965) to investigate the formation and destruction of racial segregation in colonial Hong Kong. The concept of racial segregation has been developed for nearly a century. Most empirical studies on racial segregation in the United States pertain to the factors affecting pattern of segregation using statistical methods like segregation indices. They seldom cover the formation of a segregated area. As regards racial segregation in Hong Kong, the only serious works done were those by Lai and Yu (2001) and Lai (2002, 2004). They conducted empirical research on the formation and destruction of discriminatory zoning and racial segregation. However, they have not extended their research to discrimination by private or voluntary organizations. Following in the footsteps of Lai and Yu (2001) and Lai (2002 and 2004), this thesis is a study on the formation of exclusionary zoning by legislation and, as an alternative, by voluntary association; and their effects on patterns of residential segregation within a Coasian-Olson framework. The objectives of the thesis are to (a) clarify the concept of racial segregation; (b) review different approaches and theories to explain racial segregation; and (c) test two hypotheses based on the Coasian-Olson framework. In order to test the hypotheses empirically, data are obtained from the Companies Registry and the Land Registry.|
|Welfare Effects of House Price Appreciation in the Economy with Binding Credit." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||This research analyzes the effects of recent housing price appreciation on aggregate welfare. It generalizes the results of Bajari & Krainer (2005), who find that in the credit unconstrained economy with exogenous housing price there are no effects of housing price appreciation on aggregate welfare. However, I demonstrate that if households are credit constrained and house price is endogenous, itís appreciation implies non-zero change in aggregate welfare. First, credit constraints are incorporated into Bajariís model and it is shown that if they are binding, housing price appreciation implies improvement in aggregate welfare. Then I construct a model where house price appreciation is endogenous and is driven by demand and supply side shocks. The supply shock results from change in building permit cost. The demand shifts are generated based on dynamics of householdís income and interest rates. Both credit constrained and unconstrained versions of this model are considered. Afterwards using model implied house price elasticites the actual house price appreciation in US economy in 1995-2003 is decomposed into appreciation due to each of those shocks. Using this decomposition I calculate the model implied welfare adjustments for each of the shocks and for both credit constrained and unconstrained households and then sum up the resulting welfare adjustments over shocks and households. The final result implies that housing price appreciation in 1995-2003 led to the improvement of aggregate welfare per household by the amount equivalent to about 87% of median household income in 2003.|
|Welfare Effects of House Price Appreciation in the Economy with Binding Credit." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||ERES:conference|
|What is the Length of a French Commercial Lease?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
Leases in continental Europe, including France, tend to be relatively short and have more frequent tenant break options than in the UK. Investors reflect the risk of a relatively early departure in their pricing, explaining in part the difference in yields. But are they accurately assessing this risk? In practice, how often do tenants exercise their break options, or leave at the end of their lease? In 2006, IPD France has conducted extensive research with Drivers Jonas in order to answer the following questions: // How many leases provide for a tenant break option after three and/or six years? // How many tenants exercise their break options? - How long do tenants remain in their premises? This survey helps to understand the tenant behaviour and the leases conditions in the French market. The first release of this survey was performed in 2003, allowing comparisons: three-yearly tenant break options were the most significant across all sectors; they were more significant for smaller offices and in Paris Central than in the rest of the Paris Region. Are those still the cases? What is the proportion of tenantsí with three-yearly break options, six-yearly break options and nine-yearly break options to choose to remain in their premises? Has the length of occupation decreased or not across all types of property compared with 2003, is there more consistency between types of properties, location and size of premises?
|Who Owns and Who Should Own: A Case Study of Chinaís Listed Property Companies." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Chinaís privatization programme was initiated in April 1984 through the State Economic Reform Commission for a gradual transfer of operational control and financial claims over state assets. Yet, after more than twenty yearsí reform process of privatisation, the state continues to be the controlling shareholder by holding majority of stocks in many ëprivatizedí companies. The fast-growth economy has created a favourable environment for the private economy to flourish, particularly in real estate sector that has experienced a prolonged boom since 2000. The paper examines the comparative financial performance of Chinese listed property companies in an attempt to assess influence of different ownership structures to performance. The study uses the data of all of the 52 listed property companies on Chinaís stock markets, Shanghai Stock Exchange and Shenzhen Stock Exchange, from 2000 to 2005 to investigate two issues. Initially the research identifies the ownership structure by tracing the ultimate owner, and differentiates them as State Owned Enterprises (SOE) and Private Owned Enterprises (POE). The determinants of the different ownership are also investigated. The business performance of the property companies with different ownership is further analysed and the factors such as the size, sales, efficiency in asset utilization, capital structure, productivity and managerial incentive are investigated.|
|Why Are Homeownership Rates So Different Across Europe?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Homeownership rates vary considerable across Europe; both across and within countries. Homeownership propensities are high in Southern Europe, in the UK and in Ireland and comparably low in the Alpine countries. Within each country households are much more likely to own outside of large cities. Given the political importance of housing (cost) and homeownership, it is perhaps surprising that to date there is virtually no empirical evidence that sheds light on the puzzle why homeownership rates differ so vastly across Europe. In this paper I exploit the restricted version of the European Community Household Panel (ECHP) to explain household- and regional differences in homeownership propensities and changes over time. I find that the housing stock (i.e., the housing type), which determines the relative landlord production efficiency, is the most important driver of the spatial differences. Differences in tax policies matter as well. The non-taxation of imputed rents for principally owner-occupied dwellings (POOD) has the strongest positive effect on homeownership rates (+3.9%), while the deductibility of mortgage interest for POOD and capital gains taxes that favour POOD have a more moderate impact (+1.9% and +0.5% respectively). Consistent with theory, country differences in housing transaction costs and the expected duration in the property increase homeownership propensities but the effects are rather small quantitatively. While individual socio-economic characteristics are important determinants of individual housing tenure choices, regional differences in the socio-economic composition cannot explain much of the spatial variation in homeownership across Europe.|
|Why Do Swiss Rent?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||At 34%, Switzerland has the lowest home ownership rate in Western Europe. This is a puzzle given the economic strength of the country. We use 1998 household survey data for five Swiss cantons to explore some possible reasons for this. We estimate a tenure choice equation that allows us to analyze the impacts of a number of key variables on the ownership rate. We pay particular attention to the relative cost of owning and renting, which is a function of house prices, rents, and the user cost of owning. The latter is a function of income tax policy and expected house price inflation, among other things. We also measure mortgage underwriting criteria and consider rent control and other policies affecting rental housing. By simulating a number of hypothetical changes to taxation and other policies, underwriting criteria, and price levels, we assess the importance of these variables in explaining the ownership rate. We conclude that high house pricesórelative to rents and to household incomes and wealthóare by far the most important cause of Switzerlandís low ownership rate.|
|Why does the Urban Skyline look Irregular?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||There are two similar yet conflicting urban gradient functions: the housing rent gradient function and the population density gradient function. According to the former, housing rent is a decreasing function of distance from central business district, CBD. The decrease is needed to compensate for the increase of travelling expense for commuting back to CBD. If commuting cost is the only concern, population should distribute evenly irrespective of distance from CBD. Hence, the decreasing population density gradient function is a contradictory phenomenon. This paper attempts to offer a supply answer to the question by developing the structural density gradient function.|
|Will Private Equity and Hedge Funds Replace Real Estate in Mixed-Asset Portfolios?" In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||
The key question that underlies this paper is whether real estate will continue to have a place in a mixed-asset portfolio, when institutional investors can select from a range of investments outside the core asset classes of bonds and equities. It is often stated that hedge funds, private equity and commodities all offer the benefit of portfolio diversification due to a low correlation with equities. This diversification potential is often used to argue for the inclusion of real estate in a portfolio, hence, if these benefits can be obtained in another way, with the added benefit of liquidity and lower transaction costs, does it imply that real estate allocations will fall? In this paper we investigate in detail the risk and return characteristics of real estate and a selection of alternative assets, the benefits that arise from diversification and role of these assets in an institutional investorís portfolio.
|Workplace Connectivity: A Study of its Impacts on Self-Assessed Productivity." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Previous researchers have had difficulty in defining what constitutes office productivity, especially in 'knowledge' environments rather than 'processing' environments. The main body of published research that attempts to address the link largely addresses the physical environment. It falls into two main categories, those of office layout and office comfort. It must be noted that much of the physical environment literature lacks any theoretical framework. This study developed a validated theoretical framework for the evaluation of office productivity, and included components to represent both the physical and the behavioural environment. It is proposed that by adopting such an approach, insights into the dynamic nature, or connectivity, of office environments can be established. The main objective of this research was to investigate the effects of the office environment on its occupantís perceived productivity. The studyís strength is that it is based on two sizable data sets. Whilst the data collected contain data about the physical characteristics of the office environment, it had in addition data pertaining to the behavioural environment. The categorical data collected provided a unique opportunity to undertake an analysis of office occupiers by work process type. One of the key contributions of this study was the development of the components of office productivity, which were: comfort, office layout, informal interaction points, environmental services, designated areas, interaction and distraction. The components were reduced to four in preparation for a more detailed statistical analysis. The four distinct components were comfort, office layout, interaction and distraction.|
|Yield Compression and Risk Premia: A Comparison of the US, UK and Australian Real Estate Markets." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Yield compression pervades commercial real estate markets. As a result, capital growth is high and investment returns are temporarily inflated. Forecasts of future investment returns and formulation of appropriate investment strategies depend on the whether current yields are sustainable. Alternative explanations for yield compression are considered in light of three facts: commercial real estate has historically outperformed other asset classes on a risk adjusted basis; yield compression in real estate has coincided with a decline in real long-term interest rates, and yield compression has been greater for secondary grade real estate assets than for prime assets. Valuations in commercial real estate valuations in three markets ñ the US, UK and Australia - are examined and compared. Yield compression can be interpreted as a response to fundamental financial drivers such as real interest rates and risk-adjusted returns. Therefore while returns and yields will be lower going forward, current yield are consistent with current levels of real interest rates and expected risk adjusted returns.|
|Yield Floors, Yield Determination and Yield Harmonisation." In 14th Annual European Real Estate Society Conference. ERES: Conference. London, UK, 2007."||Real estate yields have been tightening considerably in the last few years, particularly within Central Europe. Yields are a significant factor concerning total returns, and consequently there has been a series of years showing well above average returns, based on capital growth. It is common now to find markets where property yields are below bond yields. Real estate yields have been driven down by the continued ëwall of moneyí and investor sentiment, over and above any economic fundamentals. Calculating and understanding the fundamentals behind the yield determinants has rarely been attempted even though the construction of models that track the historical variation in property yields improves our understanding of the determinants of yields and provides the basis for their forecasting. Current work in Europe has paid little attention to the empirical investigation of yield movements. A UK study by Tsolacos, Keogh and McGough (1998) modelled yields but the authors identified significant econometric difficulties compared with the modelling of rents and new construction. The US literature has examined this issue in more detail. A number of studies have provided significant insight on the determination of yields and the relative importance of real estate and capital market factors e.g. Sivitanidou and Sivitanides, 1999. Building on past work this paper will be analysing the harmonising impact of the European Union on the main drivers to yields. It will consider the impact of recent major yield shifts in this relationship and consider whether the new position is a sustainable new base for yields or a short term phenomenon.|