Keywords Abstract
Décamps, Aurélien, Frederic Gaschet, Guillaume Pouyanne, and Stephane Virol. A comparison of residential and commercial real estate values in a polycentric cities In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This article aims at identifying emergent secondary centers and measuring their impact on residential and commercial real estate values, through the estimate of hedonic gradients. Urban sprawl combined with the formation of suburban employment centers have produced more complex spatial patterns characterized by polycentric structures. This paper assumes that these changes in urban forms have influenced location choices of both households and firms but have a differentiated impact on two types of urban values: residential and commercial real estate values.We use hedonic regressions to estimate the impact of the polycentric structure of the city on residential and commercial real estate values among other traditional factors. These estimations are completed by semi-parametric regressions in order to analyse sharply the form of the price gradients in a polycentric city. Data on residential and commercial real estate transactions come from PERVAL database recorded by French notary offices. The precise geolocation of transactions used in addition with a rich set of intrinsic characteristics of the buildings allows a sharp estimation of the spatial pattern of real estate prices. It is completed by a rich set of location attributes coming from several data sources recorded at a fine spatial scale and concerning mainly accessibility, socio-economic attributes, local amenities and equipments, distance to the main subcenters. The study is conducted within the Lyon and Bordeaux metropolitan areas in France, allowing a comparison of two different urban patterns and urban sizes. The various scales of the urban polycentrism are explored by taking into account two types of subcenters (by emergence and integration of satellite towns) and by estimating semi-parametric hedonic models. The first contribution of the paper is to analyse sharply two main trends of urban centrality through real estate values: residential centrality and employment centrality. The residential centrality is recomposed by the increasing influence of urban amenities at the expect of employment accessibility. Economic centrality is increasingly differentiated from residential centrality. The second contribution of this paper is to provide a precise estimation of the form of the hedonic gradients for residential and commercial real estate values through the use of semi-parametric regressions.

Lin, Fang-Ying. A cross-market analysis of land price and property price between the UK residential and commercial sectors In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

There are numerous studies on discussing the relationship between land price and property price, but none of them analysing the cross relationships between commercial and residential sectors. This paper conducts an inquiry into the own and cross causality relationships between property prices and land prices between commercial and residential sectors in the UK over the period 1990s to 2010. Granger causality models show that: (1) own causality models: land price growth rate and housing price growth rate are interdependent significantly in the housing market. Nevertheless, the causality analysis results are not significant between commercial (including office and industrial markets) land and property markets; (2) cross causality models: housing price growth rate surprisingly granger cause industrial land price growth rates, but not vice versa. At the same time, housing price growth rate and office land price growth rate are related to each other.

Anghel, Ion;, and Poenaru Vlad. A New Perspective for Understanding the Real Estate Market in Romania In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The real estate market is influenced by different economic and social factors. Our research considered theory of mononuclear and polynuclear city types in terms of residential market connections with economic overview and data interpretation.Based on analysed data changing in real estate residential prices and market activity is highly correlated with demografic and economic factors but also with the type of the city (mononuclear vs polynuclear).Mononuclear cities (60.000 – 200.000 inhabitants) experienced a uniform decreasing in the average price central vs periferic areas and reduced real estate market activity.Polynuclear cities (200.000 – 2.000.000 inhabitnts) presented non uniform evolution in prices and important real estate market activity.An important conclusion is about the expected evolution of the real estate market; based on our reasearch the polynuclear cities has more chance for future development active real estate market but in mononuclear cities there is an important chance to find economic decreasing and reducind in real estate market activity.

Fesselmeyer, Eric C., Le Kien T., and Seah Kiat Ying. A Structural Model of Loss Aversion in the Housing Market In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This study estimates a structural version of the Genesove and Mayer (2001)loss aversion model. Our model diers in several ways: instead of using ahedonic regression to estimate the current expected selling price of a home, weuse MSA-specic housing indices and include a property-specic structuralerror term that depends on the time from the date of purchase. We estimatethe model by simulated maximum likelihood using data from the AmericanHousing Survey (AHS). The AHS is an ideal dataset for studying loss aversionas it is large, and the homes surveyed span over several boom and bustperiods. We nd strong support for loss aversion behavior. On average,homeowners over-value their homes 21% for a 10% increase in losses.

Décamps, Aurélien, and Stephane Ouvrard. Accounting information and investment properties: economic and financial stakes for listed groups In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper aims to study the impact of IFRS on the measurement of investment properties. Since January 1st 2005, consolidated financial statements of European listed companies have to be published under IFRS standards (European Regulation CE 1606.02 of July 19th 2002). In this new accounting framework based on the American accounting system ,fair value is seen as a key concept. Until recently (January 1st 2013), the fair value concept was disseminated in several IFRS standards including IAS 40 related to investment properties . This latter standard offers to the preparer of accounts a choice of different measurement methods: using either historical cost or fair value model. This accounting choice is not without any consequence on the reading and the interpretation of listed companies' consolidated financial statements.In this article, we propose to depict the link between this accounting choice and the business model of European companies quoted on SBF 120 index which have investment properties on the assets side of their balance sheet. A qualitative analysis of the content of each company's annual report is combined with a set of quantitative variables describing their intrinsic characteristics and performance coming from financial and economic databases. This analysis enables us to estimate the role and impact of their measurement choice related to investment properties on their business model and their economic and financial disclosures.

de Jong, Peter, Hilde Remøy, Theo van der Voordt, and Reinier van der Kuij. "Adaptive reuse in Dutch care accommodation." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Purpose – Identifying opportunities for adaptive reuse of (potentially) vacant offices and care facilities in an increasing market driven context.Design/methodology/approach – This paper is based on research through (re-)design of adaptive reuse of vacant offices and conversion into assisted living facilities (ALF) and two student theses, both case-based analyses of care facilities, the first one with a focus on adaptive-reuse of existing nursing homes and conversion to inter alea an assisted living facility, the second one with a focus on financial feasibility based on a life-cycle cost approach.Findings – Due to new legislation and financing systems in the Dutch care industry further extramural development of healthcare is expected to result in high levels of vacancy in old peoples’ homes Adaptation to new user groups or adaptive re-use for other functions are both means to cope with increasing vacancy. It is expected that new programs will be defined for current care accommodations. However, one of the lessons from transformation projects so far is that a search for highest best use is needed to improve financial feasibility. Decisions about which new functions fit best should be supported by a LCC-based assessment.Research limitations/implications – The number of included cases is limited. Furthermore this research is limited to the Dutch context. However, it is expected that the findings can be applied elsewhere as well, due to international trends on economizing care facilities.Social implications (optional) – Adaptive reuse of vacant offices and care facilities can help to reduce vacancy, to revitalize obsolete buildings and areas, and to avoid missed opportunities and notable societal losses.Originality/value – This paper combines knowledge from different fields – adaptive reuse, feasibility studies, LCC-analysis) and different sectors: offices and care facilities. It also combines more traditional assessment methods with research through design.

Sipos, Ciprian, and Alexandru Buglea. "An Analysis of the Evolutions of Real Estate Market and Purchasing Power within the European Union." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The paper analyzes to what extent the evolution of the real estate market in the EU countries is influenced by the purchasing power of the citizens of those countries. This analysis is based on the developments of GDP per capita, purchasing power parities, House Price Index and production in construction in period 2008 - 2013 in the EU countries and is structured on three research hypotheses.The first research hypothesis assumes that purchasing power, quantified both by GDP per capita and through purchasing power parities, significantly influences the House Price Index. The second hypothesis assumes that purchasing power significantly influences the production in construction and the third hypothesis assumes that the House Price Index significantly influences the evolution of production in constructions.Testing these hypotheses result in a complex influence: the evolution of GDP per capita significantly influences the evolution of House Price Index, and the price index at his turn influences the evolution of production in construction. There was no significant correlation between the purchasing power and production in construction.Finally, is made a grouping of EU countries into four categories according to all indicators analyzed and are discussed the prospects of Real Estate market developments in the EU countries.

Blumberg, George. An Assessment Strategy for Vulnerability to High Temperature Extremes In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Heat waves can be deadly and are the leading urban environmental risk [Anderson and Bell, 2009;Guha-Sapir et al., 2010]. The most serious health conditions related to extended high temperatures are heat stroke and heat exhaustion. But these ailments tell only part of the story as most of those admitted to hospital during a heat wave arrive suffering from a wide range of indirect problems [Flynn et al., 2005], such as heart attacks [Madrigano et al., 2013], asthma and organ failure brought about by dehydration.Heat extremes occasionally cause large numbers of casualties leading to mortality rates that resemble epidemics [Gover, 1938]. Consider the impending risk of heat extremes on cities, a systematic method for assessing the risk of these extremes is proposed in this paper. The management of risk comes in several forms. For example, an understanding of the epidemiology of heat related illness is essential in developing strategies to reduce vulnerability of populations to temperature extremes. Impacts can be highly variable and depend on time of year, duration and intensity of the event, as well as aspects of demography and physical geography. For example, damaging heat impact often occurs at relatively low temperature or in pockets of the city with poor ventilation or with microclimates brought on by the urban heat island effect.Additionally, experience has shown that heat related mortality and morbidity can be significantly reduced if citizens are warned and that the most vulnerable members of the population are supported [Sampson et al., 2013]. Reduction of casualties to acceptable levels of public health requires additional effort and expense [Lass et al., 2013]. This includes identifying the populations most at risk, developing an effective plan and appropriate equipment to support them and obtaining the correct trigger to instigate an intervention. Plans that have taken these factors into account show evidence of success [Kalkstein et al., 2011]. Elements of the organisation required are the focus of this paper. With a good assessment of risk, civic planning for building resilience to the risk of heat extremes can be prioritised as heat waves are expected to increase. Two major changes drive this: one climatological and the other demographic. Firstly, the intensity and duration of extreme will increase as the climate warms [Coumou and Rahmstorf, 2012; Coumou et al., 2013]. There is even the suggestion that temperature extremes are increasin

Farrelly, Kieran, and Simon Stevenson. An Asset Pricing Analysis of Private Real Estate Funds In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This chapter employs an asset pricing approach to quantify the exposure of private property funds to publically traded and private real estate risk factors. These factors include the traditional size and growth factors, liquidity risk and macroeconomic drivers. Liquidity risk has been empirically found to determine the cross section of returns for both public equity and other alternative assets, such as private equity. In similar vein to the empirical finance studies property factors, including a liquidity factor, are constructed using NCREIF sub-market data and are then incorporated into an asset pricing framework. The impact of capital market conditions upon the relationship between these factors and private real estate fund performance is also investigated.

Ke, Qiulin, and Michael White. An empirical investigation of retail rents in Chinese cities In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper represents the first systematic attempt to develop an econometric model of retail rent determination in Chinese cities. It investigates rent determination in three major Chinese retail centres – Beijing, Shanghai and Guangzhou – over the period 1999 to 2012. The study was inspired by the conspicuous lack of research on the determinants of retail rents in China, which is surprising given the increased prevalence of international investment activity in retail property in China and as one of the biggest emerging markets, China’s enormous population, and rapid increase in consumer spending. In this paper a theoretical model of retail rent determination is constructed based on the inclusion of broad demand side and supply side influences. Subsequently, this model is estimated for the three markets considered and a preferred specification for each market is derived. Following on from this, a time series cross-sectional methodology is deployed to test the most important common rental influences across the three markets.

Buberwa, Eliud, and Christian Patrick Lutare. An Examination of Real Estate Funding Arrangements in Tanzania: The Case of Large Scale Developers In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Real estate projects are capital intensive from the acquisition of the site up to the stage the property is disposed or leased as a result few developers can afford to fund a project from their own cash. Raising capital thus becomes essential in the development process.The general objective of this study has been to examine the awareness and extent of applicability of various funding arrangements by Tanzanian large scale property developers. Specifically the study aimed at exploring the awareness of funding arrangements between investment officers, identifying the funding arrangements used and the extent they have been used and exploring the challenges large scale property developers face as they use various funding arrangements.The study has used the case study technique to meet the objectives set and the structured interview method was adopted in the data collection targeting the investment officers at NSSF, NHC and NIC. The primary and secondary data were both used in the study. The study revealed that the level of awareness of various funding arrangements between investment officers varies largely as the use of joint venture, equity, bank loans and mortgage as the possible funding arrangements were known to more than 85% of the 23 investment officers interviewed while the possible use of forward sale, project guarantee, building operate and transfer and sale and lease back was known to less than 50% of the interviewed investment officers. The study also found out that on average the extent of using equity has been the highest constituting 64% of all property development projects, followed by joint venture (29%), project guarantee (1%), bank loans (5%) and forward sale (1%). It was also found out that obtaining reliable partners for carrying out development projects has been the most challenge facing property developers.The study recommends on the improvement of the extent of using different forms of partnerships such as project guarantee and sale and leaseback. The investment policies and manuals should be flexible allowing the use of different funding arrangements and the enrollment of real estate specialists in the investment departments should be given priority.

Appel-Meulenbroek, Rianne, and Barry Haynes. "An overview of steps and tools for the Corporate Real Estate strategy alignment process." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Purpose – Strategic thinking is a continuous process, alternating between thinking, planning and evaluating. Corporate Real Estate Management (CREM) needs to align their strategy and activities to corporate strategy during this entire process that the organisation goes through. Along the way, many different issues need to be considered and tools used to help make the right decisions. This paper aims to provide an overview of the strategic thinking process, and identify important steps to take and possible tools to take them.Design/methodology/approach – First strategic thinking is discussed and where CREM should start alignment. Then CREM literature on activities of CRE managers and possible tools is assigned to the different steps of the alignment process. Last, an overview is created for CREM in practice to improve strategic thinking and alignment.Findings – CREM research has identified and created many tools for CREM practitioners to work towards alignment. However, an overview of how to proceed with alignment during the entire strategic thinking process was lacking. This paper contains a first attempt to make such an overview.Implications – This overview of steps and tools to reach alignment can be used by CREM practitioners to discuss alignment with general management. Hopefully, this helps with receiving more strategic attention and the promotion of CREM departments towards strategists in the CREM evolution.Originality value – Studies on alignment of CREM with corporate strategy tend to focus on one phase of the alignment (either initial alignment or performance management). This paper extends the alignment strategy from initial alignment towards implementation and evaluation, covering the whole process cycle. Also, it provides an overview of existing tools and methods to use.

McGough, Tony, Ayman Kowtharani, and Jim Berry. Analysing the impact of the component parts of the government bond yield on commercial real estate In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The speed of reaction of the financial markets to changes in the world economic environment is in stark contrast to the real estate markets. That is why it makes sense for analysts in real estate to examine financial statistics to glean insights into future conditions for real estate and possible lead indicators. The relationship between bond yields and commercial real estate pricing is a well-known one. The impact of changes in the so called ‘risk free rate’ on property yields, given their large income component, is understandable. However, within the bond rate itself, there is further information which can be used to provide additional understanding of the real estate world.This paper utilises the characteristics of the term premium and growth components of the government bond yield to consider what messages they send to the real estate market. The paper will also consider their usefulness as leading indicators on market sectors and spreads.

Siminica, Marian, Daniel Circiumaru, and Silviu Carstina. Analysis of the correlation between yield method in evaluation and profitability companies In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

In this paper we highlighted the influence of the results obtained by applying the income in an enterprise valuation of assets and profitability achieved or projected enterprise.Correlation was revealed by a study of the agro-industrial companies in the county of Dolj, the study was conducted during 2013-2020.The result intensity of linkages between assessment method and firm profitability indicators was highlighted with the help of SPSS.

Lowies, Gert Abraham;, John Henry Hall, and Christiaan Ernst Cloete. Anchoring and adjustment and herding behaviour as heuristic-driven bias in property investment decision-making in South Africa In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Behavioural finance involves a study of the process and influence of human aspects in decision-making and how they influence markets. The core principle of behavioural research in various disciplines is a focus on identifying the ways in which behaviour differs from a normative framework, and this principle can also be applied in an economic context.One aspect of behavioural finance, heuristic-driven bias, reflects the fact that decision makers adhere to the underlying principles of a specific rule of thumb that may lead to judgement errors. This study’s objective was to determine whether anchoring and adjustment and herding behaviour as heuristic-driven bias influences listed property fund managers in South Africa’s property investment decisions.The study surveyed the fund managers of all South African-based property funds listed on the Johannesburg Securities Exchange (JSE). Non-parametric statistical measures were used. Although no statistical significant results were found on anchoring and adjustment and herding behaviour, consistency with other studies do suggest that anchoring exist in the decisions made by listed property fund managers. They disregarded the fact that new information deemed the original anchor property less favourable.This study recommends that property fund managers should be alerted that, although no statistical evidence on anchoring and adjustment were found, the consistency with other studies does suggest that they might be prone to the anchoring and adjustment heuristic-driven bias. Such bias may lead to judgement errors and the potential of a missed gain. This study expands the body of knowledge surrounding property investment decision behaviour in an emerging market.

Le Roux, Pieter. Application value of a process model for supporting decision-making in property and real estate management In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper addresses the application value of a methodology that uses an organization-centered Accommodation-Choice Model (AC-Model) for improving the match between user-requirements and organizational objectives with accommodation and/or real estate (Voordt et al., 2011).The study was performed with 150 2nd-year students during the 2012-2013 / 2013-2014 Corporate Real Estate Management (CREM) curriculum of the Academy for International Real Estate and Facility Management (IREFM) at the NHTV University of Applied Sciences in Breda, The Netherlands. Objectives of the study were: (i) introduce student-professionals to the concept of using a process model for supporting evidence-based decision-making in real estate and property management, (ii) create am awareness and in-depth understanding of the relationships between organizational ambitions and conceptual decision-making, and (iii) assess differences in take-up and application between compulsory and recommended use of the process model in problem-based learning. The methodological approach focused on applying the process model to real-life case studies where new workplace concepts have been introduced. In the 2012-2013 academic year the application of the model was a mandatory component of analyzing 6 different case study work environments, while the 2013-2014 academic year theme assignment whereby students were asked to analyze the functional optimization or transformation of existing vacant office buildings, only recommended the use of the model. In executing their assignments, groups were asked to structure the execution and outcomes of their assignments according to the process model steps.The main outcomes of the study indicate (i) the applicability of the AC-Model as a central structuring element in identifying and documenting organizational ambitions / intentions and the related conceptual choices in workplace change, (ii) the benefits of interactive learning through active application of the process model, and (iii) the added value thereof in creating and increased level of awareness and professionalism amongst students in terms of evidence-based decision-making on organizational accommodation. This research brings originality to the topic of CREM-education through the application of a decision-making support model as value-adding methodology in supporting conceptual decision-making on issues related to real estate and accommodation based on organizational goals and ambitions.

Gramescu, Ana Maria, and Daniela Ana Maria Barbu. Aspects regarding the valuationof historical properties In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

In the paper are analyzed the criteria that influence the financial and cultural value of the historical and architectural monuments, as well as the influence given by their uniqueness. The paper synthesizes the researches made by the author in the evaluation domain, and mainly in the evaluation of the historical properties, using two methods: the replacement value method and the comparison method.When analyzing such properties, the evaluators must be aware of the financial and cultural value of the historical buildings, and the potential negative influence given by the augmentation of their financial and cultural values, as well as the consequences of some intervention measures. This is the reason why the evaluators must identify and inspect the historical buildings in the process of evaluation, so that their financial, cultural, architectural and historical interest can count, including any intervention of protection, in determining the value of the building and the requirement of intervention measures.The notion of historical monument includes both the architectural conception and the urban or rural settlement that show evidence of a certain civilization, of a significant evolution, or a historical event. Therewith, the notion of historical monument extends also on small works that over time acquired a cultural signification.

Lin, Tzu-Chin, and Tseng Yu-Hsuan. Assembling Sites for High Street Offices and Shops In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Lack of land for a large project in Taiwan is not only a problem for housing but also for office and retailing development. In order to satisfy the requirements for eminent office spaces and high-end shops to be located in a prime location, developers often engage in the assembly of a number of contiguous sites. In spite of numerous studies into land assembly for housing development, very little research has been undertaken to examine office or retailing development. Studies on land assembly for housing development have highlighted the problem of land fragmentation and its effects on later development, including development pace and pattern. We set out in this study to examine how land is assembled for office and retailing development in one of the major commercial areas of Taipei. The study area is Sinyi shopping area where both Taipei 101 Building and Taipei City Hall are located.Our expectation is that small sites need to be assembled into a larger one before those large-scale projects are possible. With the help of detailed cadastral and ownership records, we measure the degree of land fragmentation over time. We hope through this study to understand how commercial sites are assembled and how the degree of land fragmentation changes in response to the market conditions and development pressure. Also, we hope to understand why after over 30 years, some sites have now developed into high-end offices and department stores, but some fairly expensive sites next to them are still left idle. All these findings could significantly improve our understanding of how Taipei grows and if land at prime locations is in an efficient use.

Kavarnou, Dimitra, and Anupam Nanda. Assessing the impact of public amenities on house prices in the Greek islands In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper examines the impact of local public amenities on house prices in the islands of Greece. By taking the Greek islands as the case study, which has not been studied in detail on this topic, we analyse how the presence of a public hospital, an airport, a higher educational institution along with other public amenities affect the housing market (primary and second houses). The housing market attributes of the Greek islands that greatly characterise the market affect the housing needs and consumption behaviour, determinants of the demand and supply, the significance of hospital care for the residents, and the need for fast transportation. With the use of hedonic modelling approach and a large dataset of residential properties in the islands of Greece, we try to ascertain the effects of these amenities on the house prices. The model also controls for several structural and locational characteristics of the properties as well as economic and demographic attributes of the islands. The econometric estimation attempts to address common sources of bias with such modelling framework i.e. unobserved heterogeneity, omitted variable bias, non-linear effects. Models are also tested for robustness across several specifications and samples.

Donovan, Jamie, Mikael Postila, Seppo Koponen, and Kauko Viitanen. Auditing automated valuation model – case: multivariate regression model for residential property In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

In this paper, the authors explore the central tenets behind automated valuation models (AVMs) and professional auditing, reconcile them, and aim to provide a solid framework upon which auditors can make their case when auditing AVMs. More specifically, we present a mass valuation model for the Finnish residential property market used by Orava Residential REIT and its annual auditing process conducted by Realia Management Oy. Emphasis is given to the auditing process.Despite their long methodological history (Hotelling 1931, Rosen 1974), automated valuation models have been used by Real Estate professionals for a relatively short while, only gaining traction with the advent of digitisation. Currently, these methods are primarily used for taxation and mortgage evaluation purposes and their use in defining fair value is less common. According to the international accounting standard IFRS 13, a company must value investment properties to IFRS fair value. The company management is ultimately responsible for defining fair values.The use of AVMs in fair value definition requires external opinion of values and inspection of in-house modelling due to investor demand and local legislation. The combination of increasingly advanced valuation tools and growing popularity of new real estate investments ownership structures that allows for easy investment by real estate non-professionals creates additional transparency needs. These needs are fulfilled by external auditing which tests the validity of the assumptions, the data and the models and processes that were employed in the use of the valuation tools. Auditing quality is maintained by organisations such as the Auditing Standards Board and the International Organisation of Standards. However, outside accounting and certification audits, a relative freedom exists. In auditing AVMs, task-specific tools, such as guidance notes are either missing or are still under development (RICS, IVS).Orava Residential REIT solely uses its in-house, multivariate regression model for determining fair values in quarterly and annual financial reporting. This model is presented in the first section of the paper. In the second section the annual auditing process of Orava AVM is explained in detail. In the third and last part, the authors discuss the best practices of auditing while exploring and taking into account nuances that relate specifically to real estate valuation and automated value estimation models.

Dalderup, Ruben, Monique H. Arkesteijn, Louk Heijnders, and Hans de Jonge. "Beating the crunch? How corporate real estate management responsed to the credit crunch." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The macroeconomic environment is important for businesses and their competitiveness. The 2007 credit crunch has dominated Western economies for over seven years. In which, corporations have been confronted with dropping demand and profits. Their most common response is to cut back on spending to conserve cash, particularly on investments that can be deferred or delayed. Since real estate is the second largest cost factor; corporate real estate activities have direct financial impact on corporate performance as well as indirect influence through accommodating core business activities. Strategic corporate real estate management (CREM) is becoming better aligned with core business strategy, which should increase the value that CREM adds to the firm. Researchers, however, believe there is a need to test which strategy or combination of strategies is most successful in assisting in accomplishing the firm’s core business objective in both good and bad economic conditions combining information on firms’ financial performance, core strategies, corporate real estate strategies and real estate operating decisions. This paper provides an understanding of CREM within five multinational corporations from different industries and demonstrates the impact of the economic conjuncture on their CRE activities. The conceptual model links four elements: (1) macroeconomic environment, (2) corporate business results, (3) corporate strategy and (4) real estate strategy. Two models are designed to predict the linkage or alignment between the elements: (1) the impact matrix and (2) the real estate classification model. According to the impact matrix, corporations that are sensitive to the economic context show to respond more incrementally. According to the real estate classification model, corporations that operate customer-focused real estate show to respond quicker and more vigorously. The research demonstrates that the credit crunch has directly and indirectly influenced CREM strategies. The case studies show that the credit crunch brings change in the organizational structure and their real estate strategies. There are two contradicting responses towards the credit crunch: (1) conservative decision-making or (2) increase of competitive advantage. Cost reductions lie at the basis of all real estate strategies. The corporate real estate response is related to the impact of the credit crunch on the corporation, their industry and the type of real estate.

Morri, Giacomo, and Andrea Artegiani. Before and after the Global Financial Crisis: capital structure comparison of European property companies In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Real estate is an industry that deserves some attentions to capital structure due to its own peculiarities. As a consequence, existing relevant literature and research is abundant of analyses that are focused on this industry as well. However, such studies have been centered mainly in the more developed USA market and, because the Global Financial Crisis of late 2000s is a relatively a recent event, research has not yet much considered how this phenomenon has impacted on corporate financing decisions.This study is based on the 68 European publicly listed companies that have been continuously included in the EPRA/NAREIT Europe Index for the 10-year period from 2003 through 2012. Asset Size, profitability, growth opportunities, cost of debt, ownership and risk are considered as the variables that can best help explain the capital structure of such companies. On this purpose, a panel regression model with such variables will be employed. The impact of the GFC on their capital structure will be included by means of a temporal dummy variable. The implications of the empirical findings will be interpreted in light of the three major theories and the prevalent literature about financing decisions.It will be illustrated that the six variables entered in the model can be used to get a better understanding of the capital structure of the companies in the EPRA/NAREIT Europe Index. The findings of this study are indicative of the fact that the GFC has had a significant impact on the financing decisions of such companies. The inclusion of the impact of the GFC is certainly an element of innovativeness for the studies of this type, and this is particularly true considering that the results will show that some variables have acted differently before and after the burst of the GFC. In this sense, this research adds much on existing literature about corporate finance and in particular on that literature focused on the real estate industry.

Kucharska-Stasiak, Ewa, and Konrad Zelazowski. Behavioral aspects of real estate valuation In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

In majority of cases real estate valuation requires market objectivization. According to the definition, market value should reflect the most probable selling prices and typical behaviors of market participants. Valuation methodology often relies on an assumption of full rationality of market actors. However, valuation is a multistage process, to some extent, biased by valuers' subjectivity. The range of subjectivity depends on the complexity of valuated real estate, characteristics of real estate market, like market imperfections and inefficiency, as well as valuers' individual judgments and choices. In the decision-making process, valuers experience cognitive dissonance and use heuristics which affect the valuation accuracy. The goal of the paper is to investigate behavioral determinants of real estate valuation and their consequences for valuation process.

Branigan, Clare, and Paul Ryan. Bidding Strategies at Auctions for Residential Properties In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper examines bidding strategies at auctions for residential property market sales in Dublin, Ireland during the property boom of 2004 to 2005. At that time, sales of properties through the auction mechanism was more common for premium properties. In the case of properties sold through auction, the form adopted was the first-price English method. English auctions are marked by discrete increases in bids. The auctioneer raises the price incrementally and each participant chooses whether to stay in or drop out of the auction. This study sets out to compare bidding strategies of first bidders to those of snipers. (A “sniper” is defined to be a late bidder at the auction; who does not bid until only one remaining bidder is left.) This paper also examines how behavioural biases (such as “escalation of commitment”) influences the behaviour of bidders at these auctions. Actual bids can signal that an item’s true value has not been reached (Kagel, 1995) and increased bids by others can cause other to copy. In other words, bidders use traffic as an indication of value, and more traffic implies higher value. This is consistent to Shiller’s (1990) theory on a shortage illusion. Similar to bluffing in a poker game, a sniper strategy can serve the purpose of signalling an aggressive strategy, sending the message “Don’t continue bidding as I am going to keep bidding higher”. This message discourages competition for two related reasons: it suggests that the sniper bidder values the property more than anyone else, and also if the aggressive bidder drops out at any stage it implies that the other bidder has overbid for the item. Our results show that snipers are more successful at auctions in terms of winning more auctions and paying lower prices than first bidders. In summary, our results suggest that sniper bidders in residential house auctions are suggestions of keen strategies.

Kashyap, Anil, and Jim Berry. Bridging the Infrastructure Gap: Innovative financing and investment models for emerging economies In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Infrastructure provision is a multidimensional problem for governments and businesses globally. Decades of under-investment within developed economies combined with an insatiable appetite for infrastructure within emerging economies has culminated in an infrastructural deficit estimated at circa US$50 trillion over the next 25 years (Ernst and Young, 2010). The scale of the global infrastructural investment challenge markedly exceeds public sector capacity. Indeed, a central theme of national government policies pertaining to infrastructure provision has been premised upon partnership based procurement. Central to the expansion in partnership-based procurement has been the international roll-out of the Public Private Partnership (PPP) model, which has now been adopted in more than 40 countries around the world. Within emerging economic markets partnership models are being widely used in the development of transport related infrastructure including roads and ports (air and sea) as well as energy provision. However, investors in complementary sectors such as health and education are using core infrastructure to hedge risk relative to the returns offered in traditional asset classes. This paper utilises synthesis of structured interviews from financial institutions, (banks, private equity and debt funds), policy makers and infrastructure development companies. Infrastructure Journal (IJ) data will also be used to analyse the financial structure (debt-equity ratios) and risk-return characteristics of partnership models globally across the different stages of the infrastructure provision at pre-development, development and post-development stages.

Krieger, Patrick. Can only a genius handles chaos? – A behavioural dynamic systems viewpoint on real estate management In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Purpose – This paper argues that usual key indicators used in real estate management only show differences to a planned level. For this reason we consider the construction of behavioural key indicators supporting the human decision-making and learning process to improve decision-making in real estate management.Design / methodology / approach – We draw on findings in the area of dynamic decision-making. This viewpoint implicates the existence of a dynamic system on the property level thus employing an analytical case for showing the dynamics in the rental cash flow pattern. Findings – The dynamics in real estate cash flow pattern are driven by interdependencies and feedback processes between a set of variables. Thus, traditional instruments of managing the rental process are prone to erroneous perception about the ‘real-world’. Furthermore classical key indicators neither support the human decision-making process as well as the learning process for understanding such dynamic systems. A computational system is proposed to address support for both the dynamic decision-making and learning process.Research limitations / implications – (1) More research is needed on the validation of dynamic behaviour in cash flow pattern. (2) Validation on the performance of decision-making in the specific context of the rental process is needed. For this paper it is intended to raise questions for future research rather than delivering answers to this difficult and complex topic. Originality / value – The paper provides a new viewpoint on decision-making in real estate management by means of transforming task methodology in real estate management.Paper type – Viewpoint, Case studyArticle Classification: R10, G02, G17, C58

Akinbogun, Solomon Pelumi, and Tunbosun Oyedokun. Commercial Property Development in Peripheral Areas of Cities: the Inherent Risk In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Commercial properties are mostly in high demand in cities; the demand becomes more profound in cities that serve as administrative headquarters of a region, state and country. Without doubt, commercial properties normally command higher rental value per square meter than many other uses. This explains the reason behind the conversion of most residential properties at the Central business districts to commercial properties. Therefore, Real estate investors tend to invests in this investment vehicle in various locations for optimum returns. However, the breakthroughs in information superhighways and the increasing adoption of ICT seem to have undermined the performance of commercial properties given the resultant flexibility associated with change in business and commercial operations. This paper seeks to examine the unique characteristics of high rise commercial properties in capital cities where demand for office spaces is at the peak. It takes a global view of the issue by considering a European and an African capital city namely Edinburgh and Akure to examine the inherent risk in such property. Based on the findings, the paper would provide useful advice for commitment of capital for the development of office property in city periphery.

Crosby, Neil. "Commercial property valuations – Useful or useless? Or “What have they ever done for us?”." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Keynote Address

Ibrahimaj, Delina, and Gianluca Mattarocci. Construction activity and real estate market trend: evidence from Albania In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

PurposeThe aim is to identify the main macro-economic drivers of construction in an Eastern European country that is experiencing significant changes in the real estate sector.Design/methodology/approachUsing a proprietary database provided by Bank of Albania, the paper evaluate the relationship between macro-economic determinants and a set of macro-economic drivers using the granger causality test and the impulse response function.FindingsResults show that in Albania, as in other new developed economies, the credit market and the amounts of remittances are the main sources of construction changes. Real estate sector characteristics are more relevant in explaining the construction development in the short and in the long run.Research limitationsThe paper is based only on a detailed dataset on the Albanian economy but results cannot be generalized for all Eastern European countries.Practical implicationsResults obtained are useful for policy market and macro-economists interested to evaluate the dynamics of the construction sector and evaluate the effect of any macro-economic change on the size and growth of the sectorOriginality/valueThe paper is the only one available for the Albanian market and the methodology adopted is never used before for any European country.

Sundrani, Deepak. Consumer Behaviour in Real Estate, in India In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

An identical house in a different location is not priced the same. This is because a home-buyer does not pay only for the physical construction but for a lot of externalities like location, amenities, etc. Many authors have pointed out that most home-buyers have to make a trade-off, such as location for the size of the house, etc. In this paper, the researcher has tried to explore which segment of the urban home-buyers, give priority to which factor. The Hypotheses are that Price is the most important influencing factor for buyers of a small house ( 1 Bedroom + Hall + Kitchen), Location is the most important influencing factor for a moderate size house ( 2 Bedrooms + Hall + Kitchen) and Amenities is the most important influencing factor for a large house ( 3 Bedrooms + Hall + Kitchen). The study was carried out in Pune ( in India). A sample of 600 home-buyers ( 200 of 1 BHK, 200 of 2 BHK and 200 of 3 BHK, who had recently purchased a house were administered a structured questionnaire and the empirical analysis proved that for 1 BHK and for 2 BHK, the hypotheses were proved correct, but for 3 BHK the Product characteristics were the most important influencing factor instead of the amenities.

Cao, Albert. Containing housing price inflation in China: is local intervention more effective than central intervention? In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

China’s housing market has had 18 years of rapid price inflation. To prevent deterioration of affordability, from 2005 to 2013 the central government used a combination of administrative interventions and macro-economic measures to contain housing price rises. However, centrally formulated housing policies and intervention measures could not be fully implemented at local levels and thus have only limited short-term successes. From 2013, the central government retreated from direction intervention at the national level and left local governments to intervene to contain renewed rapid price hikes. This paper analysed demand and supply in China’s housing market and evolution of institutional arrangements that increase demand but distort supply using data obtained from fieldwork conducted in 2011 and 2013. It argues that localisation of intervention could be more effective than the one-size-fits-all approach adopted by the central government but reforms on institutional arrangements that prioritise high-end housing market and housing investors rather than owner occupiers are necessary to re-position the housing market to the middle class and ease affordability problems.

Beckers, Ronald, and Theo van der Voordt. "Corporate Real Estate Alignment Strategies in Dutch Higher Education." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Purpose – This paper aims to explore the variables that affect the process of aligning Corporate Real Estate (CRE) with organizational goals on a strategic level, and regarding day-to-day operating activities in higher education institutes.Methodology/approach – The paper first outlines theoretical issues of CRE alignment processes in general. It then presents the findings from 13 interviews with CRE managers who are responsible for the accommodation of large Dutch Universities of Applied Sciences. Findings – The review of CRE theory shows three key CRE alignment process activities and six variables that influence these activities. The empirical study shows how these variables can be used to distinct two extreme strategies for CRE alignment processes, based on control-orientation and involvement-orientation. Originality/value – There are two gaps in research literature on CRE alignment processes. First, there is a need for better CRE alignment tools and techniques with a solid empirical basis. Secondly, the managerial decision-making regarding space issues and its effects on students and staff in higher education is an under exposed topic in CRE research. There is still limited understanding of how to optimally align educational buildings to education. The current research provides practitioners and researchers insights in possible CRE alignment strategies and underlying variables in the field of higher education. The findings might be applicable in other sectors as well.

Mittal, Jay. Creating New Property Market Opportunities via Land Readjustment Technique in Developing Markets - What's the Connection? In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper is based on a case study of a 47 mile long Ring Road, which was developed using market-friendly land-readjustment technique. The paper first presents the methodology of land readjustment (LR) technique as used in several developed countries such as Germany and Japan and developing countries such as India. LR technique is used to make provision for roads and other public infrastructure without additional budgetary expenses and is aimed to create land values and achieve planned urban growth. In LR technique first multiple individual land parcels are pooled and then their lot boundaries are reorganized after making provision for infrastructure and providing road frontage. Organization of road fronting parcels, regular shape, and access to public infrastructure provides a property value enhancement to these lots. This paper in its second part presents a case study of how this LR technique was extended to develop a regional level infrastructure -- a case of 47 mile Ring Road with 200’ wide public right of way in rapidly growing fringe areas of a 5 million population city of Ahmedabad in India. This same technique was used to acquire the ROW for the ring road. Benefits and constraints of the process are discussed and comparative advantages and disadvantages with the traditional eminent domain and the superior market-friendly LR technique are discussed. The process involves fostering partnership with the existing land owners and the result of the process is equitable benefits to all land owners involved in the development.The paper in its third part, develops strategies and opportunities for its applications in the United States. Barring a few prerequisites (legal and political will), land readjustment technique can be effectively used to service rapidly growing cities. Lessons from this LR technique case study can be applied in the United States, especially, in areas where eminent domain is popularly employed in acquisition of private properties for redevelopment purposes to facilitate economic development. This paper proposes a plan of action of how land owners could be engaged in planning and how the land owners could be made economic partner in the new real estate led economic opportunities and how lessons from land readjustment technique be used in United States.ReferencesLin, Tzu-Chin. 2005. Land assembly in a fragmented land market through land readjustment. Land Use Policy 22 :95–102Sorensen, Andrew. 2000. Conflict, consensus or consen

Kelly, Rachel, Stanley McGreal, Jim Berry, and Martin Haran. Cross country analysis of asset management corporations: impact on property markets In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Ireland’s entry into the EU in 1973 marked a prolific step in the country’s economic development, manifesting in an era of financial liberalisation that was defined by banking deregulation, the development of new financial instruments and increased leverage within the market. The financial crisis of 2008 and subsequent collapse of the property market led to burgeoning levels of non-performing loans in Ireland’s banking sector. The Irish government took a pivotal step in December 2009 with the implementation of the National Asset Management Agency (NAMA) whose function was to acquire troubled assets and loans from the country’s struggling financial institutions. NAMA accumulated a portfolio of €73.8 billion loans and assets, meaning that it is one of the world’s largest property holding corporations. NAMA is not the first corporation of its kind, and accordingly, this research draws comparative analysis from international practice of asset management corporations (AMCs), as a government intervention strategy. Prominent country cases include the Resolution Trust Corporation in the United States in the late 1980's, the Swedish experience of Securum in the early 1990's, The Thai Asset Management Corporation that was formed in 1998 and the Resolution Collection Corporation created in Japan in 1998 also. The cross-institutional analysis pays particular attention to each of the respective models objectives and designated time-span, governance, vehicle structure, asset eligibility, valuation methodologies applied in the transfer of assets, loan workout strategies and various mechanisms of disposal. These underlying processes are fundamental to the overall performance of the AMC’s and are applied to the NAMA model to establish any institutional strengths and flaws in terms of both design and operation. The paper focuses upon the property investment market on the island of Ireland, as this comprises 48 % of the NAMA portfolio. With the property market in Ireland displaying signs of renewed confidence and increasing levels of liquidity, the study aims to evaluate NAMA’s role in this recovery.

Zhao, Yuan. Cross-sector fund performance comparison: the role of real estate mutual funds In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

We firstly examine the performance of active sector funds as a whole as equal- and value-weighted portfolios, against a stock market benchmark (Carhart four-factor model), an associated sector market benchmark, and the combined five-factor model benchmarks. We consider the gross and net returns to show the impact of expenses on performance. We also employ the residual bootstrap approach for portfolios to separate genuine skills from luck. We also look into individual sector fund managers, to examine the proportion of truly skilled sector fund managers after false discoveries have been controlled using false discovery rate (FDR) approach. Among all 13 sectors, most sector fund managers on average cannot add enough to cover expenses irrespective of benchmarks. We find mediocre performance on real estate mutual funds (REMFs), comparing with funds of other sectors. Weak evidence of outperformance relative to sector index is found in sectors of gold, and consumer services, even after deduction of expenses. Healthcare and technology sectors, as a whole, can marginally beat the stock market. When the combined sector and stock market benchmark is employed, funds of health care and technology oriented sectors overall can still outperform after costs. Finally, at each sector fund level, we implement joint test to control false discoveries from false positive-alpha funds, and find limited proportion of skilled sector fund managers, after costs.

Wojewnik-Filipkowska, Anna, and Colin Elliot. Decision making in local governments - a comparative analysis of investment strategy In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Local governments manage various investment projects which determine development potential and capabilities of both cities and enterprises. Managing in the twenty-first century is a great challenge for managers because of changing operating conditions, changing market economy as a whole, and economic recession. Therefore, investment management becomes so important, and the issue of making effective investment decisions becomes one of the most vital questions. The aim of the research is then recognizing and comparing the methods of the investment planning process and decision making in two local governments – Gdansk in Poland, and Edinburgh in United Kingdom. Planning, which contributes to decision-making, is the first function of management, which every organization must face and which is realized under certain conditions. The concept of deciding (synonymous with the concept of problem solving) involves a series of steps in addition to the act of choice itself, and goes beyond the definition of deciding in the strict sense. Deciding in the broad sense (sensu largo) include the analysis of policies, review and evaluation criteria for decision-making, the use of selected criteria and finally a choice based on the course of action. The research covers these aspects. The research uses the following methods: analysis of the literature, analysis and logical design. Research tools include, in particular: observation, survey and interview. Survey covers two selected local governments. The pool research and interviews have been addressed to directors (general managers) responsible for investment management. Interviewees have answered the questions, which focus on: organisation of investment management, investment strategy, investment management and decision-making in investment management. The project limitation is connected with selected local governments, therefore results cannot be transferred to general economy, however the research can be useful for public investment managers and private investors, too. The research results can improve communication, raise efficiency, precision and common approval of the process within public administration and in public-private cooperation.

Appel-Meulenbroek, Rianne, Astrid Kemperman, Marianne Liebregts, and Tim Oldman. "Designing the modern work environment to support important activities: An analysis of different preferences in 5 European countries." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Purpose – Nowadays the worker is the most important production factor for knowledge organisations, and thus Corporate Real Estate Managers (CREM) must focus on supporting employees. Modern work environments must be designed to meet their preferences for satisfaction and leveraging talent. But the way employees experience and use the office environment depends on national culture, so implementing a new work environment might require different strategies in different countries. This paper describes research into employee preferences regarding work activities and the work environment in 5 European countries, and the implications of differences that came forward.Design/methodology/approach –Based on literature, hypotheses are formulated about the importance of different activities in and features/facilities of the modern work environment. These are tested with the Leesman database, from which 32,006 employee questionnaires from Sweden, the Netherlands, Great Britain, France and Germany were selected. The data are analysed with principal component analyses and Chi Square or F- Tests to study differences between the importance the employees in these 5 countries attached to 21 workplace activities, 19 workplace features and 18 workplace facilities.Findings – With regard to activities, the Germans value interaction activities, while the Dutch and Swedish employees mention collaboration activities as most important. With regard to workplace features/facilities, the French and Germans find it most important to be able to work place independent, while the Swedish care extra about meeting areas. Building services are only important to British employees. More differences between the countries are discussed, after relating the workplace components to the important activities.Implications –The results of this study make clear, that a one-size-fits-all concept is not always the best way for multinationals to support your employees.Originality value – Previous studies focused on employee satisfaction with the work environment that is offered (pre/post move) or asked designers about influence of culture. In this paper we actually ask employees what their preferences are, regardless of the current work environment. It is the first study that compares and tests differences between preferences of European employees on this scale, and also to study these preferences for the work environment in relation to preferences for certain activities and compare countries.

Dan, Popescu Dumitru, and Ciora Costin. Determinants of the real estate market:the Romanian case In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Real estate represents a significant portion of most people's wealth, and this is especially true for many homeowners everywhere in the world. The size and scale of the real estate market make it an attractive and lucrative sector for many investors. This paper aim at presenting the main determinants of the real estate market in Romania such as demographics, interest rates of financing instruments, the economy (measured by economic indicators such as the GDP, employment data, manufacturing activity, the prices of goods), government policies/subsidieslegislation that can have a sizable impact on property demand and price, real estate investment opportunities, depth and sophistication of capital markets, investor protection and legal framework, administrative burdens and regulatory limitations, and socio-cultural and political environment.

Popescu, Ana-Maria, and Stefania-Cristina Curea. Determination of market rent for the application of the direct capitalization approach in assessing the real estate investment In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

In approaching the value of a real estate investment through the income, the most important matter is to credibly determine the market rent level. The current practice of taking over from different public data sources, a level of the market rent from an interval of contractual or requested rents and using it as a representation of a market rent is not appropriate, out of at least two reasons, respectively: (a) the real estate investment subject of the assessment has some features that can be substantially different from the features of comparable real estate investments; and (b) in the current practice, the real estate investors grant many facilities in order to attract and maintain the tenants, which makes the effective rent to be different from the displayed rent.The authors try to describe and argue the need of taking into account these two reasons.

Dan, Popescu Dumitru, and Ciora Costin. Diversifying the financing sources of real estate in post-crisis Romania In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The real estate industry from transition countries in Eastern and South-Eastern Europe including Romania were hit harder than any other region in the world by the global recession of 2008–2009 (United Nations, 2010). Economic recovery started in the second half of 2009, but—for most of these economies—the crisis made painfully clear that the transition from a centrally planned to an open market economy has broad new prosperity which is highly sensitive to global economic shocks. Real estate has a crucial role in the global financial markets, with major real estate investors including besides banking the pension funds, sovereign wealth funds, private equity and endowments. However, the global financial crisis has had a major impact on real estate investing.Prior to the financial crisis, the ready availability of capital saw high levels of debt utilized by many real estate investors. As we move out of the crisis, the clear investment priorities are for lower debt levels, effective risk management, conservative investments (e.g. core real estate portfolios), increased professionalism, simpler and more transparent investment structures, reduced return expectations and greater consideration of the impact of increased financial regulations. Real estate continues to be seen as an important, long-term asset class for major investors, as well as an essential element in the economic and social.This paper aims at presenting the trends, structure and financing sources of real estate industry in Romania and their specificities in post-recession period.

Ke, Qiulin, and Patrick McAllister. Does corporate transparency pay off for European listed real estate companies? In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The objective of the research is to investigate the relationship between financial reporting disclosure and the financial performance of European publicly traded real estate companies. Information risks and agency costs are key issues for investors. Agency costs arise when managers have incentives to pursue their own interests at the expense of investors. A lack of transparent financial information can result in greater information risk for investors who experience increased uncertainty about the true economic value of the firm creating potential adverse selection problems. Without sufficient controls and monitoring, investors will tend to pay the same prices for ‘lemons’ and ‘good’ companies. The topic of corporate governance has attracted major attention in the professional sphere and across different areas of academic research. In real estate sector, there is a body of work; most of them look at US REITS on the relationship between corporate governance and firm performance (e.g , Ghosh and Sirmans, 2001,and 2003; Feng, et al. 2005, Bauer, et. al. 2010; Bianco, et. al. 2007; Hartzell, 2008). In most of these studies, the researchers tended to focus on individual governance variables to find out which of the conventional corporate governance mechanisms, be it board size and independence, insider ownership, ownership concentration play a significant role in the governance structure of US REITS and the REITs performance and market value. Results have been mixed. In these studies, the financial disclosure transparency by REITs as one of corporate governance variables was not explicitly examined, though it is an important governance issue of a firm. In this study, we investigate whether enhanced level of financing reporting disclosure and transparency of European listed real estate companies will reduce the information asymmetry, minimise firm risk and enhance firm’s performance. The level of disclosure and transparency will be proxied by the winners of the EPRA’s best annual report survey conducted by Deloitte. To assess the linkages, a dynamic ordinary least squares model will be employed to test a range of factors that affect corporate disclosure transparency as a corporate governance variable and its impact on firm’s performance.

Cheung, Mingyan, and Chicheong Lei. "Does Property Transaction Matter in Price Discovery in Real Estate Markets? Evidence from International Firm Level Data." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

We study the cointegrating relationship(s) between public and private market pricing of real estate using international data for U.S., U.K., Australia, Canada, Singapore and Japan from 2001 to 2013. Unlike earlier studies in the literature, we employ a unique dataset of property transaction to form public and private return pairs around transaction windows, not by regular calendar days. We estimate the normalized Gonzalo and Granger (1995) common factor loadings of the public and private real estate markets by vector error-correction models and find significant proportion of price discovery from the private markets of U.K., Australia, Singapore and Japan, in contrast to previous studies. However we also find significant heterogeneity across property types and individual firms within each type. Further investigation of the VECM suggests that variances of price innovation and the short-run dynamic adjustment mechanism change significantly over the recent crisis. Our results are robust to the (de)leverage of REIT returns and length of transaction windows.

Coen, Alain, and Pierre-Arnaud Drouhin. Dynamic REITs Style Analysis with Errors-in-Variables: New Insights In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

In this paper, our aim is to shed a new light on the analysis of REITs in the presence of time-varying exposures and errors-in-variables (EIV). From different multi-factor asset pricing models including the standard Fama-French-Carhart asset pricing model and the Pastor and Stambaugh model, we use the Kalman filter and show evidence of EIV in the dynamic factor loadings. Our approach revisits the dynamic return-based style analysis in the REITs industry in USA, UK and Canada. Our promising results clearly report significant improvement of factor loadings and an increase of the accuracy of the return risk sources for eight REITs styles.

Sobolevschi, David Maria Iuli, Vasile Robu, Monica Aureliana Petcu, and Costin Ciora. Economic and financial performance of real estate transactions under accounting rules and specific taxes In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Characterization of the economic and financial performance of real estate transactions involves the processing of accounting information under the regulations specific tax. In this sense, information with a high degree of concentration is provided by accounting mechanisms using the balance sheet, profit and loss account, statement of equity and explanatory notes. Tha accounting and taxation referential influences the performance of financial accounting statements highlighted. Performance evaluation of real estate transactions is considering complex issues regarding on the one hand economic and financial principles that circumscribe the capital allocation decision based on risk-return specific arbitrage and on the other hand the impact of accounting and tax provisions in the field. The concatenation of these issues is the foundation of reasoning investment, which in real estate, on the globalized markets, incumbent multiplier effects.

Heinrich, Michael, and Daniel Wurstbauer. Effects of Solvency II on Asset Allocation In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The current structural low-interest environment is encouraging institutional investors to rethink their asset allocation strategies and increase their exposure towards alternative asset classes, such as real estate and infrastructure. This is particularly the case for insurance companies, which come under pressure to reduce their investment in currently low-yielding government bonds, given the high interest rate guarantees associated with obligations from existing life insurance contracts. As a consequence, insurance companies may be forced to rearrange their assets appropriately. However, the forthcoming Solvency II Directive could counteract this scenario. After Solvency II comes into effect, insurance companies will be subject to higher capital requirements aimed at ensuring insurance-protection even in the case of macroeconomic shocks. The Solvency Capital Requirements (SCR) varies by asset class and is determined by the Solvency II standard formula, which also determines the methodology used to aggregate the respective required equity position. Therefore, it may become necessary for insurers to minimize the SCR by means of their asset allocation, depending on their capitalization, profitability and the general competitive dynamics. If the results of such an optimization are not in accordance with those of conventional optimal asset allocation, Solvency II will lead to inefficient capital allocation in practice. As a result, the portfolio risk would increase, which contradicts the original purpose of the regulation. Furthermore, changing investment behavior from insurers might also have direct effects on the pricing and the product range offered on the capital markets, e.g. for real estate investments.We therefore analyze, whether the Solvency II standard formula could indeed cause the abovementioned incentive incompatibility with respect to the asset allocation process. The main focus lies on the potential shift of direct real estate and direct infrastructure weights within the portfolios of insurers under the Solvency II regime.

Jay, Graeme. Encouraging private sector investment in affordable housing the inner city in Johannesburg In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

There has been a high rate of urbanization and influx of people into the Central Business District (CBD) and inner city of Johannesburg, South Africa over the last thirty years. One of the consequences of this rapid urbanization is a severe housing shortage, especially for lower income individuals. Investors and developers need to have a sound business case when making any investment in real estate; more so when the target market is tenants seeking affordable housing as these tenants are extremely sensitive to rentals that do not fall within a certain range. One of the questions that arise is what factors encourage or discourage private sector investment into affordable housing in a large city like Johannesburg in a developing country like South Africa.Various developers, property managers and asset managers were surveyed to assess their views regarding the factors that encourage or discourage private sector investment into affordable housing in Johannesburg.The purpose of this paper is to:•Consider the relevant literature, in an international context, regarding the factors that encourage private sector investment in the inner cities of major cities, especially in developing countries; •Consider what factors are specifically relevant in Johannesburg;•Share the results of research conducted with various developers, property managers and asset managers; and•Suggest what factors will encourage private sector investment in the inner city of not only Johannesburg, but also other major cities in South Africa, as well as other developing countries and whether or not these differ from the factors identified in the international literature.

Glumac, Brano, Oosterbaan Marieke, and Wim Schaefer. "Energy saving potential for corporate property: system dynamic approach." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Within the maintenance activities of non-residential real estate, there is a substantial potential to implement energy efficiency measures leading to the reduction of energy consumption. A focus on the optimization of energy usage can contribute to lowering overall maintenance and energy costs, preserving the technical performance of a building, and realizing energy saving objectives. Therefore a dynamic assessment tool to support an optimal energy usage in a non-residential building was developed. The tool is based on a system dynamic model that has sensitive variables for: two potential maintenance scenarios, external factors, and case specific conditions. In addition, by introducing a case study of Nijmegen City Hall the assessment tool has been verified.

Poon, Joanna. Engaging sustainability good practice within the curriculum and property portfolio in the higher education sector In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

There is a large body of research that has discussed sustainability in the higher education sector, albeit the main focus being curriculum design and development. Extant literature also provides evidence how organisational strategic plans can positively impact sustainable development. Whilst these exemplars have predominantly focused on other sectors (e.g. Manufacturing/Retail), there is a paucity of research on curriculum design, property development, management and maintenance in the higher education sector. Real estate is one of the key assets for large organisations such as universities. However, there is lack of research focusing on ‘sustainability and education’ in the built environment within the higher education sector. The aim of this paper is to identify good practice for incorporating sustainability within the curriculum and property portfolio within the higher education sector. This paper is discussed in the context of a case study. The case study university is Deakin University in Australia. Sustainability is overtly recognised in Deakin University’s Strategic Plan, LIVE (Learning, Ideas, Values and Experience) Strategy. Given this, ‘sustainability’ within the context of this paper can be seen as: (1) the incorporation of core sustainability drivers into the curriculum, and (2) embedding and promoting sector-specific (property and built environment) sustainability agenda.The research methods for this paper include desk-top study and discussion with stakeholders who have responsibility on sustainable development, in areas of curriculum development and property portfolio development and management, within the University. The author reviews Deakin’ University’s policy documents on sustainability and hold discussions with the University’s Sustainability Team in order to identify the University’s current priorities and future plans for sustainable property development, management and maintenance . Discussion will also be held with colleagues in Deakin Learning Futures and the Learning Innovation Team of the Faculty of Business and Law (i.e. University and Faculty’s Learning and Teaching Departments respectively) identifying the good practice on incorporating sustainability within the curriculum.This paper will conclude a list of recommendations to the higher education sector on sustainability strategies that could be incorporated into the curriculum and a strategic framework for the Facilities Services Division on sustainable, property development, management and maintenance.

Reinert, Jan, and Natalie Bayfield. Equivalent Yields and Ex-Post Property Valuations in the UK In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper is an analysis of the equivalent yield as defined by IPD, Investment Property Databank. It investigates the historical development of equivalent yields in the UK between 1998 and 2012 across different locations, investor types, lot sizes and sectors. Due to the size and quality of the data set, courtesy of MSCI – IPD, it is further possible to compare equivalent yields of freehold and leasehold properties.The second part of the analysis focuses on ex-post property valuations. Detailed information on net income and costs make it possible to derive historical capital values based on actual (ex-post) rather than expected (ex-ante) income streams. Real Estate valuations act as a point of reference for capital employed and hence influence the investment performance of a property. Since the boom and bust of the recent real estate crisis was unknown to valuers at the time of valuation, it is expected that the estimated ex-post capital values differ significantly from their corresponding ex-ante valuations. The derived ex-post values can be used to re-measure performance and compare it to that of the initial valuations.The analysis shows 1) how perceptions of risk and future performance change over time, across sectors, locations and investors and 2) how reliable property valuations really are, especially in times of unanticipated crises.

Vlachostergiou, Vassiliki. Estimating the effect of sustainability factors on apartment prices: The case of Athens greater area In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Multiple regression analysis is widely used as a research tool for modeling several aspects of both commercial and residential property. Such statistical analysis is mainly implemented for the assessment of the effect of property characteristics on values and rental prices. The aim of this paper is to estimate, through the implementation of multiple regression analysis, the impact of different environmental and sustainability characteristics on the apartment values within the wider Athens area. The relevant available literature has been thoroughly examined in order for the environmental factors which affect residential prices to be identified. The final selection of the variables of the model was determined by restrictions and limitations imposed by the nature of the factors and the availability of the data. The sample used for the statistical analysis derived from the database of Bank of Greece, which compiles all residential property valuations carried out by the Greek credit institutions. The independent variables introduced to the model are population density, infrastructure quality, building factor,compatibility of uses and built and natural environment quality. The overall explanatory power of the selected linear regression model was substantial, with the most significant independent variable being quality of built environment. Alternative models have also been attempted, though with inferior results. A number of factors with a potentially significant explanatory power have been omitted, due to the increased complexity involved in the data collection. This fact has dictated the need for further research on potential alternatives and additions to the model, which could provide with improved results.

Mitrakos, Theodoros, Calliope Akantziliotou, Vassiliki Vlachostergiou, and Sotiris Tsolacos. Exploring the determinants of residential property values in a crisis: evidence from Greece In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The recent financial crisis demonstrated once again the importance of the housing market to macro-economic performance and financial stability highlighting the need to understand better the determinants of house prices in different jurisdictions. But similarly the economic swing caused by the financial crisis has had an impact on residential values calling for empirical evidence on the specific factors behind residential price adjustments in this characteristic macroeconomic environment. The objective of this paper is to establish the most important determinants of residential property values in Greece focusing on residential prices in twenty-five major cities in the country. For this purpose, alternative hedonic models have been estimated using a large database of appraisal-based values provided by commercial banks for the period 2006-2013. This particular sample period makes the study of residential prices of greater interest. The determinants of property values across cities are examined in a period of an unprecedented swing in the Greek economy, the result of the sovereign debt crisis, with positive growth rates giving way to a cumulative contraction of the economy of over 20%. Indeed, residential property values in Greece have shown a significant cross section variation.This analysis controls for the impact of macroeconomic conditions across cities and examines the cross city variation in house prices with reference to four categories of influences: (i)socio-economic influences in particular the prefecture’s population density and GDP(ii)location characteristics (eg accessibility) (iii)Infrastructure (eg airport) and amenities(ii) physical characteristics and property specification, primarily age, property type, surface, floor-level, construction quality, storage area, parking space, etc. We find that the location characteristics variables carry significant power for the observed differences in house prices in key cities in Greece. The empirical investigation also offers support to the role of physical characteristics in determining the value of the property. On the other hand amenities like the existence of an airport, university or hospital seem to have a limited effect.

Zdankus, Narimantas, Gintare Baltrusaityte, Ala Daugeliene, and Rasa Apanaviciene. Feasibility study of abandoned buildings reuse in Lithuania In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Changes in economic structure, followed by the decline in traditional activities, redundancy and general recession in the region, have influenced the increasing number of unattended, obsolete and abandoned buildings all over the world. According to the recent studies, there are more than 9 thousand abandoned buildings in Lithuania, the biggest number of which arose in rural area due to the restructuring of agriculture; and the other part is concentrated in urban area and represents public, industrial or military use properties. Therefore, planning and management of urban development is often a matter of derelict buildings: demolition or preservation by means of conversion, supporting social environment, creating new jobs and reducing visual pollution. The general aim of the study is to develop complex model for efficient abandoned buildings utilization. The paper gives the analysis of scientific research on the above stated problems, describes the relevancy of abandoned buildings utilization and identifies possible solutions for its refurbishment. It provides a comparative model containing various criteria by which different options for abandoned buildings reuse can be evaluated and the most rational alternative can be selected. The applicability of developed model is illustrated by using example of derelict building of hotel located in the center of Kaunas city.

Milcheva, Stanimira, and Bing Zhu. Financial Integration and Spatial Linkages in Housing Markets In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This study investigates whether an increase in cross-border bank lending can lead to spillover effects among housing markets of developed countries using a dynamic spatial panel model. Variations in house prices in one country can spill over house prices in other countries by transmitting counterparty risks through a foreign-bank lending channel. Foreign banks intermediate wholesale bank funding and can affect domestic credit supply and asset prices by transmitting financial conditions across borders. Cross-border bank flows transmit financial risks such as currency, maturity, credit and funding risks which may be associated with a change in either global financial conditions or country-specific factors. While controlling for country-level and global risk factors, we find stronger co-movement among house prices between countries with stronger financial integration. Our findings have implications for international portfolio diversification based merely on geographic factors. While other studies find that economic integration drives cross-country correlations in property returns, we show that the fact that the major global institutional markets are highly linked through the financial markets also can lead to increased inter-linkages with hosing markets and a reduction in the attractiveness of real estate in a mixed-asset context.

Azasu, Samuel, and Aashen Lalloo. Generational Differences in the Experience of the Office Space - 2 Case Studies in South Africa In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The purpose of the study was to explore the existence of generational differences in the employees’ experiences in the office environment in Johannesburg. The authors conducted a survey of employees in two financial institutions in South Africa.Open plan offices were found to be the dominant office form. Private offices were the least common type of space. Most offices also had supplementary facilities like restaurants/canteens and covered parking. We found no generational differences in the trade-off between privacy and collaboration in the workplace. There were, however, significant associations between generational differences and group cohesion in the work-space.Cost savings in the dominance of open plan offices create a trade-off between privacy and collaboration. The privacy concerns appear to be compensated for by the dominance of private meeting rooms. It is unclear if the differences in group cohesion are related to physical work-space or other concerns.

Far, Mohsen Shojaee, and Carlos Marrmolejo Duarte. "Geopolitical Brownfields: introducing a new terminology for brownfields within conflict zones." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Traditionally brownfield sites are one of the impacts of deindustrialization and suburbanization within urban environment, however many sites around the world became abandoned and derelict as a result of geopolitical conflicts by means of internal and/or international conflicts of interests between powers over space. As a matter of fact many post-conflict and post-war reconstruction approaches have been developed to deal with these sites, but the question is if these abandoned sites stay abandoned for long period of time, or the conflict extends with an open ended solution, what is the best way to deal with these abandoned and possibly contaminated lands? The main aim of this paper is to introduce and propose a new perspective on dealing with these abandoned sites throughout the concept of the proposed term “Geopolitical Brownfield”. As the main methodological approach of this study, a documentary investigation will take place, in addition to references and evaluations on the case of Cyprus Buffer Zone. This paper concludes with a conceptual definition as introduction to the new proposed terminology as geopolitical brownfields.

Ramón, Sotelo. Germanys housing policy after the general elections of 2013 In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

During the electoral campaign for the general elections held on 22nd September 2013 the lobby group representing the tenants proposed a rent regulation in the housing sector concerning also new contracts for existing housing beyond social housing. This proposal was immediately included into their political agenda by the social democrats (SPD) and very shortly afterwards also taken as a position by chancellor Merkel as leader of the Cristian Democratic Party (SPD), although many doubts were expressed within her own party. Only the liberal party opposed to any type of rent control, but did in the end not enter parliament. After elections a coalition between the Social Democrats and the Cristian Democratic Parties was established and the implementation of the rent control fixed. This paper analyses the political reasons for the behavior of Angela Merkel, looks at the expected results from this rent control concerning the allocation of flats, the proportion of home-ownership, the ongoing segregation within cities, and the future construction of new housing.

Zhao, Yuan. Global Real Estate Mutual Funds Performance: Managerial Skills and Diversification Benefits? In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

We examine the performance of global active real estate mutual fund (REMF) industry as a whole and at individual fund level, relative to the global real estate and stock markets, and both before and net of expenses. We have used the cross-sectional bootstrap to separate genuine skills from luck. We also evaluate whether global active REMF, at aggregate industry and individual fund level, can gain significant benefit from investing internationally, by comparing them with U.S. domestic real estate and stock market. A series of robustness tests are implemented, especially conditional model, timing model, subperiod test, recursive estimates, and Kalman filter, to examine whether performance and global diversification benefit are sensitive to the impact of macroeconomic background. We find that actively-managed global REMF industry, as a whole, fails to beat the global real estate market and stock market, even before the consideration of expenses. It also cannot beat the U.S. domestic real estate and stock market either, implying no significant benefit from globalization. Same inferences hold when the combined benchmark models are employed. At the individual global REMF level, we find limited evidence for the existence of skills and diversification benefits for any global REMFs. These results hold after a series of robustness checks are implemented. Implementing cross-sectional bootstrap provides new insight to the conventional tests based on asymptotic assumptions. Based on simulated empirical cross-sectional distribution, we find fewer fund managers are truly skilled, and most of the outperformed funds are merely lucky.

Botis, Andrei. Green Building Trends in Commercial Real Estate In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The interest in green building solutions including materials, products, technology and services has improved significantly all over the world in the past years.A green building can be any project that is built or renovated with due concern for minimizing the full environmental impact of its design, construction/renovation, operations and (possible) de-construction. Key findings for green buildings:• Construction Costs• Building Value• Operational Costs• Health and Productivity• Risk Mitigation Construction CostResearch shows that building green does not necessarily need to cost more, particularly when cost strategies, program management and environmental strategies are integrated into the development process right from the start. Overall trend towards the reduction in design and construction costs associated with green building as building codes around the world become stricter, supply chains for green materials and technologies mature and the industry becomes more skilled at delivering green buildings.Building ValueEvidence from studies carried out over the past decade, primarily based on data gathered from certified office buildings in the United States and UK, has shown that green buildings tend to have higher asset values than their conventional code-compliant counterparts within a range of 9%-13%:•Higher rental/lease rates•Higher occupancy rates•Lower operating expenses•Lower yieldsIn the study of NABERS - rated buildings in Australia, it is important to note that while the higher levels of performance (NABERS 5*) tended to achieve a sales premium of up to 21%. A building in Romania has been sold to an international investment fund at 7.5% yield comparing with the prime office market , which is situated around 8.0 %. Operational CostGreen buildings have been proven to save money through reduced energy and water use and lower long-term operations and lower maintenance costs. High-performing green buildings need to be backed up by robust commissioning, effective management, leadership and communication in order to achieve their predicted performance.HealthGreen design attributes of buildings and indoor and outdoor equipments can improve worker productivity and occupant health and well being and stress reducing.Risk MitigationRisk factors can significantly affect the rental income and the future value of real estate, affecting their return on investment. Investor risk relates to the potential reduction in value.

de Castro, Aliane Vieira, Javier Neila, and Ramirez Gema Pacheco. "Greenfield Shopping centre development. The integration between environmental features, building design and investment analysis at the decision making stage." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Shopping centre is a long term investments in which Greenfield development decisions are often taken based on risks analysis regarding construction costs, location, competition, market and an “expected” DCF. Furthermore, integration among the building design, project planning, operating costs and investment analysis is not entirely considered by the investor at the decision making stage. The absence of such information tends to produce certain negative impacts on the future running costs and annual maintenance of the building, especially on the energy demand and other occupancy expenses paid by the tenants to the landlord. From the investor´s point of view, this blind spot in strategy development will possibly decrease their profit margin as changes in the occupancy expenses have a direct outcome on the profit margin. In order to try to reduce some higher operating cost components such as energy use and other utility savings as well as their CO2 emissions, quite a few income properties worldwide have some type of environmental label such as BREEAM and LEED. The drawback identified in this labelling is that usually the investments required to get an ecolabel are high and the investor finds no direct evidence that it increases Market Values. However there is research on certified commercial properties (especially offices) that shows better performance in terms of occupancy rate and rental cost (see Warren-Myers, 2012 for a detailed discussion). Additionally, Sayce (2011) says that the certification only provides a quick reference point i.e. the lack of a certificate does not indicate that a building is not sustainable or efficient.Based on the issues described above, the research compares important components of the development stages such as investments costs, concept/ strategy development as well as the current investor’s income and property value. The subjects for this analysis are a shopping centre designed with passive cooling/ bioclimatic strategies measured at the decision making stage, a certified and a non-certified standard regional shopping centre. Moreover, the proposal intends to provide decision makers with some tools for linking up green design features to the investment analysis in order to optimize the decision making process when looking into costs savings and design quality.

Surmann, Markus, Wolfgang Brunauer, and Sven Bienert. Grey discounts – do less energy efficient buildings face economic obsolescence and decreasing prices over time? In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Properties with outstanding green features and their potential influence on increasing rents and values in the market place associated with higher economic performance on investments have been investigated on a global scale in the past. As a result the upside of green credentials is well understood and has been proved by various empirical studies. However, the competitive advantage of sustainable buildings affecting the building stock and therefore the contrary effect has not been well investigated based on empirical evidence. It is generally assumed that a potential Sustainability Impairment for the existing building stock with inferior energy efficiency etc. is emerging over time caused by the fact that more and more Green Buildings and the ongoing process of increasing energy efficiency regulation for new construction will lead to a situation where sustainable buildings are market standard and older properties face discounts beyond the regular age-related depreciation. In this light the paper investigates two aspects. First the authors explore if the existence of a negative influence on rents, values and economic performance for less energy efficient existing commercial buildings controlling all other factors, especially the effect of age can be proved for the German property market. Data sets from appraisal-based indices are analyzed to provide evidence. Second we analyze the market dynamics over time and try to answer the questions if grey discounts are increasing continuously while green credentials become more and more common. To answer this question we are looking at different timeframes.

Swidler, Steve, Patrick Schorno, and Michael Wittry. Hedging house price risk with futures contracts after the bubble burst In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper extends the existing literature on managing house price risk. While previous work finds that a hedger would have reduced a large amount of variance in housing returns in Las Vegas, Nevada using a static in-sample strategy in Chicago Mercantile Exchange (CME) futures contracts, we show that neither static nor dynamic strategies would have maintained an effective hedge during the significant decline in housing prices. The inability to hedge house price risk using CME contracts ultimately calls into question the long-term viability of housing futures.

Jamiyansuren, Burmaa. Hedonic model of house pricing based on customer analysis In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Consumption of Mongolians was changed greatly since Mongolia transferred into free-market economy. One of them is house market were formed in Mongolia through privatization houses to households. However, it is still the big problem to civil servant and democracy that have middle and lower income because house -price has bubble. For that reason, to evaluate background of house market and economy situation in this paper. Also I intended to determine customer features by cluster analysis. The aim of this research is to analyze price using hedonic regressions based on consumer’s analyze about either house price increased quickly compared with GDP in a last decade or factors influenced and determine actual value that is met the interests of consumers and supplier. Keyword: housing price, consumer’s analysis, hedonic regression, factors that influenced the price, bubble of housing price, emerging economy

Oprescu, Claudiu, Lucian Buse, and Mirela Ganea. Highest and Best Use Problems in Market Value Appraisals In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The analysis of relevant data to develop a market value opinion requires two important steps in the valuation process before the applicable approaches to value are applied. Market/marketability analisys begins the process of narrowing the focus from a broader macro view to data that is especially pertinent to the appraised property. Highest and Best Use is the overriding to be applied in the analysis and ultimate selection of comparable data used in real estate valuation. In all valuation assignments, opinions of value are based on use. Highest and Best Use relies on that analisys to identify the most profitable, competitive use to which the subject property can be put. Highest and Best Use is often identified as the key concept supporting real estate use and value decisions. This paper addresses this ambiguity and identifies the theoretical premises of Highest and Best Use as employed in the various land use disciplines. There are many highest and best use problems associated with real estate appraisels today.

Havermans, D.W.Q., M.I.K. Leussink, and J.J.A.M. Smeets. Home ownership and housing costs Between dream and nightmare In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The housing costs of households are diverse. During the stages of the lifecycle the living costs of households vary substantially. Especially the costs for home-owners fluctuate considerably during their lifecycle. The house of a lot of older households is completely paid for, their loan to value ratio is zero and their remaining housing costs are low. On the other hand, younger households have high costs for mortgages, a high loan to value – even more than 1 – beside their remaining costs.The paper deals with this variation of housing costs among owner occupiers in several life stages and explores the consequences for the housing market. It focuses on the situation of younger households. As a consequence of the long lasting Dutch crisis the selling price of dwellings has gone down and a lot of these households potentially have a residual debt, because the value of their house is lower than their mortgage.This paper explores the extent of the problem, the consequences for the housing market and the possible solutions.

Salzman, Diego A.. Homeownership and The Property LadderA study about illusions and their influence in the British Housing Market In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The hierarchical Property Ladder is often said to encapsulate the British housing market. This overtly rational investment driven theory is explored in its truthfulness. Behavioural biases are shown in house price data for the British market over the last two decades. Additionally, survey responses seems to provide evidence that the Property Ladder approach to housing is poorly understood, and, somewhat ironically, irrational behaviours maybe being exaggerated through the belief of the social construct

de La Paz, Paloma Taltavull, and Francisco Juarez. Housing and Poverty. Concepts and Analysis In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The literature approach the lack on housing as one of the consequences of household poverty. This paper turns around the argument and assesses how housing tenure triggers poverty situations. It estimates several affordability indicators associated to housing tenure, finding empirical evidence of different poverty threshold among Spanish households depending on their tenant status. Using micro-data of the Survey of Quality of Life for Spain , data is segmented by residential tenure and calculate poverty lines for homeowners, renters (both at a market prices and below market prices) and the free housing , the four tenure formulas existing in the Spanish housing market. Results suggest that high ownership rate has prevent from poverty to a large number of homeowners with income below the poverty line, especially after the economic crisis in Spain.

Hiller, Norbert, and Oliver Lerbs. Housing Prices and Demography at City Level: The Case of Germany In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Macroeconomists have long been interested in the role of money and credit growth for residential real estate price developments. For example, Goodhart and Hofmann (2008) analyze money effects on house prices across industrialized nations. Using panel vector autoregression (Holtz-Eakin et al. 1988), the authors find significant evidence for a strong link between monetary policy and housing price booms or even bubbles. Housing prices may be affected through different monetary transmission channels, like the volume of credit or interest rates. Although housing is produced and consumed locally, the focus of this research has been relying heavily upon national-level data. However, if economists want to examine house price effects of monetary variables, the viability of cross-country comparisons may be offset by a lack of comparability with regard to different institutions. Usually, researchers conclude that the impact of monetary and financial variables differs substantially between countries characterized by different institutional settings. Subnational economies, such as regions or local housing markets, can represent useful quasi-laboratories for examining monetary policy effects under fixed institutional or financial frameworks, because they share the same legal, political and social systems (Carlino and DeFina 2008).Since the financial crisis in 2008-09, residential real estate prices are significantly increasing in many major German cities. This may arguably be a result of the low interest rate policy, which has been applied to stabilize the European Monetary Union. To analyze the dynamic relationships between changes in interest rates, changes in the local demand for housing, and local housing price developments, we apply panel vector autoregression to city-level data from Germany. Our panel dataset contains 90 German cities and spans a time period of 16 years. By using Arellano-Bond (Arellano and Bond 1991) estimators we calculate orthogonalized impulse-response functions. Hence we are able to separate fundamental factors (demography, income) from monetary factors (interest rates) that influence city-level housing prices. We find that monetary shocks, like lower interest rates, affect local house prices differently across different city groups. Housing markets with low elasticity of supply are very sensitive to interest rate changes. Therefore a continued low interest rate policy may accelerate local residential real estate booms in parts of Germany.

Burhan, Burhaida, and Kazunori Hokao. Housing units act as multidimensional goods within spatial proximity patterns In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Housing units are known as multidimensional goods, yet the approach of identifying this multiple characters of properties are seldom clarified. This study allocates a perspective of identifying the many dimensions of housing unit from spatial point of view. The concept of proximity or nearness in particular is essential in many forms of human reasoning. Distance is then one of the factors that determine proximity, but not the measure of proximity itself. While the proximity measure is mostly a conceptual formation, it is often inversely proportional to a distance measure. This study identifies appropriate measures of distance using Nearest Neighbourhood Analysis (NNA) to generate spatial attributes. Kernel Density Estimators (KDE) is later used to illustrate patterns of spatial clusters for housing units’ distances patterns. The analyses show distance matrices as appropriate benefactor to derive appropriate spatial attributes, while the diversity of Kernel Density patterns shows different spatial perspectives of housing units. The implications of monocentric and polycentric patterns determine contributions of distance matrices in multidimensional aspect of a housing unit.

Christersson, Matti, and Peggie Rothe. "How far and Finnish HQ’s have relocated? - The role of short distance relocations in Finnish HQ moves." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Relocation is one of the tasks that corporate real estate management is responsible for. They are important events for organizations as there can be a variety of short and long term impacts due to the relocation. Large portion of previous research has focused on longer distance relocations i.e. relocation between cities or countries although short distance relocations have certain impacts, too. The case with especially smaller organizations is often that they do not withhold required expertise on relocations as they are not conducted on regular basis.This paper focuses on contributing to the knowledge of the relocation phenomenon. The aim is to examine the scale and volume of companies’ HQ relocations. This is done by analyzing the relocation distances and the amounts of relocated companies in order to formulate an understanding of how far and how often companies have relocated. The study uses quantitative data of address changes of Finnish limited liability companies between years 2006 – 2011. The findings of this study indicate that the vast majority of relocations are short distance relocations. Over two thirds of all of the moves were relocations of less than ten kilometres by distance. The average distance that the companies relocated was circa 29 kilometres and the median only less than five kilometres. Further, according to the analysis, some 27 percent of all of the companies had relocated at least once during the five and half year time period of the dataset and some six percent during the last year of the data.The findings of the study give an overall image of the scale and volume of the relocations phenomenon within the private sector in Finland. It is concluded that the vast majority of relocations are actually short distance ones and that average organizations do not conduct relocations that often. Thus, in addition to long distance relocations, the focus in future research should be set more on the impacts of these types of relocations as well.

Fuerst, Franz, and Elias Oikarinen. How important is building energy efficiency in markets with cold winters? Pricing evidence from Finland In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This study uses a unique dataset of the Finnish housing market to investigate the hypothesised link between energy efficiency and house prices. It explores the following research questions: 1) Does the energy efficiency rating of a dwelling have an independent impact on its price and if so, how large is the price effect? 2) Does the energy efficiency rating affect the liquidity of housing? 3) Does a high energy efficiency rating always translate into lower maintenance costs (and vice versa)? 4) Has the capitalization of energy efficiency ratings into prices changed during 2006-2012, as the rating system has matured and the awareness of the rating system has grown? 5) Do the lower maintenance costs induced by energy efficiency fully capitalise into house prices? Controlling for a large number of spatial and property characteristics, we find that a low energy efficiency rating affects the price negatively but do not detect a significant premium for higher-rated buildings in most estimations.

Goodchild, Robin. How property markets work: some lessons learned over three cycles In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Property markets around the world are cyclical.The author, using the experience he has gained as a practising real estate professional for over 40 years,analyses how cycles occur and the key drivers. This includes how property cycles can best be exploited.

Johnston, Nicole, Richard Reed, Eric Too, and Dulani Halvitigala. Identifying governance factors that impact upon multi-owned developments In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Multi-owned developments are a unique property type due to the incorporation of a private governance association. Although there are jurisdictional differences, these associations are generally responsible for, amongst other things: the management, maintenance and control of the commonly owned property, determining the contributions payable by each lot owner to the operation of the association; enforcing the rules of the association; and ensuring that records meet legislative requirements. As a volunteer based entity, these associations can be plagued with dysfunction which can impact upon the viability of the association and in turn the individual lots within a development. Anecdotally it appears that property stakeholders often do not undertake an inspection of association records to determine the level of functionality. By categorising the identified governance factors, understanding can be gained of the risks associated with this property type. This paper seeks to identify governance factors that impact upon multi-owned developments in Australia by evaluating relevant legislative requirements and analysing a collection of association inspection reports. The implications for the wider property market is also assessed. Internationally, there is scant literature on multi-owned developments and the impacts dysfunctional associations have on a development and the wider property market.

Leão, Jr, Souza, Fernando pontual de, Cristóvão de Souza Brito, and Edgard Leonardo N. Lima. "Impact of socioeconomic characteristics in Brazilian real estate market choices: a case study in the city of Recife-PE, Brazil." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The objective of this paper is to analyze the impact of socioeconomic characteristics of neighborhoods in Recife-PE, Brazil, that determines the preferences of real estate market developers. To achieve the proposal it was used a cluster analysis in the database of ITBI (Tax on Transfer of housing Property), gotten with a Recife City Hall. The socioeconomic characteristics of neighborhoods are included as input variables jointly with the real estate market performance indicators of each neighborhood. The result indicates that the neighborhoods with high level values of socioeconomic indicators present more efficiency to real estate investments of promoters. There is a tendency to a concentration of real estate activities in the reach places of the city, even with other places that have appropriate geomorphologic characteristics and low land prices. The study presents a real estate investment map in the city territory. The real estate market expansion doesn´t occupies these areas. This implies in great urban problems, like difficult traffic mobility and deficient urban services (water supply, sanitation system, and others).

Leão, Jr, Souza, and Fernando pontual de. Impact of socioeconomic condition and market characteristics on the location choice of real estate developers in Brazil: a case study in the city of Recife, Brazil In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The changes that South America economies has experienced, especially from the 1990s, inserted some countries in the global economic context and increased the some countries growth. Closer relations among the state and market agents marked it. This article discuss the impact of socioeconomic variables in the location choice of real estate developers in the territory of Recife city, Brazil. It proposed a statistical model using the socioeconomic characteristics of the 94 districts of the city, based on the database of Census of the IBGE (Brazilian Institute of Geography and Statistics, 2000 and 2010). In spite of the different methodology techniques used in other papers, this work concludes that the socioeconomic condition (economic status of neighborhood, or population externalities), are fundamental to understand the segmentation of City´s territory. The occupation determines increasingly segmented areas for poor people that lives in the suburbs, while the best living spaces stays with the rich part of population. This case presents the occupation process most common in the Brazilian’s cities, mainly in the major urban agglomerations.

Copiello, Sergio, and Pietro Bonifaci. Improving the energetic efficiency of residential buildings: empirical findings from financial evaluation of case studies in Northern Italy. Is it worthwhile? In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The theme of buildings' energy efficiency occupies a prominent place on the agenda. This study aims to assess the convenience of improving the energy performance of residential buildings: higher costs to be incurred during construction or renovation are offset by lower operating costs? The point of view is purely financial, externalities are not considered. The evaluation model is set on the discounted cash flow analysis, and partly based on life cycle assessment methodology. Variables are simplified by comparing the incremental costs of investment with the savings achieved on energy supply cost.The model is applied to three case studies located in the Northern Italy. The first is related to the design of a new single-family house. The second and third cases concern the renovation of two different public housing estates. For all cases several improvement alternatives are analyzed.The estimate of the investments constitutes a critical element; the literature has shown that many thermo-economic studies may underestimate them, due to the lack of consideration of hidden costs. The discount rate is estimated as the opportunity cost of capital, and thus in a range representative for an household interested in investing in energy efficiency.Most of the alternatives analyzed are not feasible: the discounted amount of savings is not enough to fairly compensate or fully reimburse the investment. Additional simulations were performed, considering several trends of the future growth in energy prices. If the energy prices grow considerably, each of the project alternatives analyzed will exhibit a higher convenience, and some of them will become feasible within the time frame considered.The results of the research can be summarized as follows: investment in upgrading the energy efficiency of residential buildings currently lacks viability, in purely financial terms. Nevertheless, it can be interpreted, as a hedge against the risk that the prices of energy supply will grow significantly in the coming years. As original contribution, this research allows to highlight a new kind of energy efficiency paradox: improving buildings performance should allow to reduce both climate-altering emissions and, in an efficient market, the prices of energy supplies, but decreasing energy prices disincentive to invest in buildings improvement.

Kauko, Tom. "Innovation in real estate and evolutionary agendas." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Ideally, the notion of innovation enables paving the avenue of research towards evaluation of sustainability in all research areas dealing with the built environment, also real estate. While innovativeness can be understood as an extension of the current paradigm in urban real estate economics, it can also be understood as an alternative paradigm involving more evolutionary perspectives. What happens in the mother discipline of general economics is a reasonable prediction of what eventually will happen in applied disciplines such as real estate economics. However, given the vast differences between physical and asset-oriented views of real estate, it is realistic to assume inertia among real estate economists trained in neoclassical economics in adapting new concepts such as evolutionary dynamics, in which case some other discipline (economic geography, for instance) must set the cross-disciplinary agenda. This paper reviews various literatures involved in this adaption of the innovation-concept and seeks to make connections across them. It argues for the need for real estate economists to open up horizons for dialogue with other disciplines.

Vlachostergiou, Vassiliki, and Norman Hutchison. Innovative financing instruments for real estate development in Western Europe In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The scale of the real estate development investment challenge allied with capital budget constraints has meant that the prospect of implementing innovative finance instruments has gained considerable momentum in recent years, at a time when Western European government policy has shifted towards supporting the decentralisation of power to local authorities. For instance in the UK, the introduction of the Community Infrastructure Levy (CIL) has provided local authorities with revenue generating streams to fund infrastructure provision, contributing to the economic viability of real estate development. At a macro-level, the broader economic aspects of the ‘crisis’ of finance in the EU post 2007-08, have taken urban development and regeneration trajectories in different directions. Furthermore, the effects of this ‘crisis’ at a regional EU level have seen different national export structures and dependence on other sources of foreign-currency earnings.In this research, exploration of financial instruments for real estate development is taken from a pan-European perspective. Views are targeted to Western European nations of the United Kingdom, Germany, France, The Netherlands and Spain. The broader pan-European context has been researched institutionally, such as through the JESSICA (Joint European Support for Sustainable Investment in City Areas) initiative of the European Commission, developed in co-operation with the European Investment Bank (EIB) and the Council of Europe Development Bank (CEB). The clear aim and output from the project has been to generate a contemporary conceptual model of financial instruments, used in real estate for urban development and regeneration in Western Europe, that have developed post 2007-08 Global Financial Crisis (GFC). The research has been sponsored by the RICS (Royal Institution of Chartered Surveyors) Research Trust.

Siniak, Nikolai, and Kiryl Saltykou. "Innovative Land Administration Approaches for Sustainable Development: Belarusian Success Factors." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Belarus has preserved its third position in Registering Property in the World Bank’s Doing Business 2014 report. Constant improvement of property registration procedures has allowed Belarus to achieve that. The Registering Property indicator takes into account three factors: the number of procedures required to transfer rights to property, the time spent on completing all the necessary procedures and the cost of procedures. From ”The Earth Summit“ in Brazil 1992 sustainable development recognized by almost all societies as one of the major global goals. In a broad sense it’s incorporates economic, social and environmental concerns in decision making for development which thereby should meet the needs of the present, without compromising the ability of future generations to meet their own needs. Till nowadays sustainable development continued to be a driving force in land administration, which is about processes of determining, recording, and disseminating information about the ownership, value, and use of land, when implementing land management policies. UN-FIG Bathurst Declaration, 1999 established a strong link between land administration and sustainable development, outlines its significance in poverty reduction, social, environmental and economic development. The article provides basic innovative approaches on land administration in the Republic of Belarus, discusses main sustainability issues and challenges to resolve in a forthcoming period to meet the international trends in cadastral reform.

Parker, David. Interaction of Value and Market Concepts in IVS In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

International valuation standards have now become an established part of global valuation practice.Definitions of value (such as “market value” and “special value”) have become part of the lexicon of valuation practice, but with limited apparent consideration of the concepts of market underlying such definitions of value.This paper investigates the interaction between concepts of value and concepts of market within the IVS framework and identifies areas of ambiguity for further consideration.

Squires, Graham, and Erwin Heurkens. International approaches to real estate development: applying a conceptual model to compare and contrast themes and issues In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Real estate development is a significant factor in shaping the built environment. It shapes the way people live and work, and by doing so determines and enables human activity to evolve. Real estate development within specific national geographies form a contemporary reflection of social, economic, environmental, and political forces that are occurring. Nonetheless, due to globalisation we increasingly witness similar demands for space despite institutional differences existing between countries, and cities contained within their national borders. Analysis and discussion in this study focuses on comparing and contrasting international approaches to real estate development, in order to create a comprehensive understanding of real estate development in Europe and around the world – in particular, we explore; the broad philosophy, mechanisms and characteristics, geography of site and situation, implementation, and outcomes. We evaluate the main themes and issues covered in international approaches to real estate development by providing a detailed comparison of case studies, set against a new conceptual framework in this field. Additionally, we summarise the usefulness of the comparative applications, before we conclude with some recommendations for further studies on international approaches to real estate development.

Jones, Colin, and Nicola Livingstone. Internet Retailing and the Emerging Implications for Real Estate In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

British high street shopping centres are suffering high vacancy rates and a large extent of the ‘blame’ is placed on the web. The UK has the greatest proportion of internet sales in the world and there are inevitable implications for existing high street shops, retail parks and out of town malls. This paper seeks first to look at the ways the internet has already changed shopping and its impact so far on real estate of different retail sectors. It then examines potential strategies for retailers to embrace the web. It considers how the strategies vary between retail sectors, including books, CDs/DVDs, food, department stores, clothes, and white goods. The research seeks to quantify the impacts by reference to company reports and other published sources. The paper seeks to relate these strategies back to current retail property market trends and discusses the implications for the future of retail investment.

Christensen, Bjarke, and Tony Vittrup Sørensen. Interpretability versus out-of-sample prediction performance in spatial hedonic models In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The presence of spatial correlation in the error terms is a well-known concern in the estimation of hedonic real estate valuation models. Several methods have been devised to address this issue in order to improve precision of parameter estimates and model predictions. When the hedonic model is used for valuation of externalities or amenities, such as noise or green spaces, focus is on reducing omitted variable bias on parameter estimates. In this context, interpretability of the spatial component is paramount. In the context of appraisal or automatic valuation, focus is primarily on out-of-sample prediction performance. This dichotomy of objectives implies a potential trade-off between interpretability of parameter estimates and out-of-sample prediction accuracy. Here, we compare four methods in terms of their suitability for amenity valuation and real estate valuation respectively. These include an aspatial OLS model, the fixed spatial effects OLS model, the spatial error model and a spatial generalized additive model utilizing a soap film smoother over geographic coordinates. Each model is estimated under differing spatial specifications, utilizing a rich, Danish dataset, and the trade-off between predictive accuracy and stability of parameter estimates for a spatial variable of interest is studied.

Kurylchyk, Kateryna, Daniel Hill, and Gunther Maier. Investments into the energy efficiency of buildings: the role of local and regional administrations In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper presents results from the EU project “Transnational cooperation for the improvement of buildings energy performance and efficiency“(TRACE) which aims to provide a better understanding of reasoning behind scarce investments in energy efficiency in order to improve relevant policies.Due to the complexity and heterogeneity of the real estate market, it is crucial to understand the basic principles of interplay between its different components and stakeholders in the context of energy efficiency in order to create sound policies for enhancing investment in energy efficient buildings. This becomes more important when it comes to implementing policies on a local level and/or in less developed countries. The focus of the study rests therefore upon identifying economic aspects influencing private investments in energy efficient buildings and gaps where policy interventions should be considered in order to encourage such investments. The paper starts with a thorough analysis of the institutional framework of energy efficiency investments. In particular, it elaborates on the links between the real estate market and energy efficiency investments, with a particular focus given to the relationship between key market actors. By approaching the problem from an investor’s point of view, such issues as informational problems, split incentives and prisoner’s dilemma situations are argued inter alia to be critical when considering improvements in energy efficiency investments in buildings. This analysis allows us to identify key factors that may hamper investments into energy efficiency of buildings. At the same time, it makes possible to determine points where local and regional administrations can influence the energy efficiency related investment behaviour of private companies. The paper categorizes such routes for policy intervention and presents which of them are utilized to what extent by local and regional administrations in South-Eastern Europe.

Michael, Lynne. Is London a safe haven for UK Real Estate during times of instability? In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

London has long been viewed as having an international standing in terms of financial power and strategic influence and is now recognised as a ‘global city’ and a favoured destination for property investment funds.The purpose of this paper is to assess the robustness of capital flows into London commercial property over an extended period including the pre and post global financial crisis (GFC). An investigation is made between capital flows into London, being an International Financial Centre (IFC), and how these compare with flows into commercial property markets of a selection of UK cities whose economic base is less directly influenced by the finance industry.Using the Real Capital Analytics (RCA) data base of commercial property transactions recorded over the period of study, the robustness and therefore volatility of capital flows into London commercial real estate are compared against those of selected alternative major UK cities. These capital flows are analysed to reveal the range of volatility over the timeframe enabling a more informed and critical understanding of the London market relative to alternative commercial property markets in the UK. These findings have a potential influence on strategic allocation of assets within portfolio planning.

Thompson, Bob. It is all about ME! Personal branding in Property Research In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Just as companies brand their products to create unique associations in the minds of their target consumers, personal branding involves the creation of strong, unique and favourable associations in the minds of the people around them. However, unlike products which have a conscious marketing program to build and maintain brand values, personal brands are often built unconsciously. Yet content creators have a complete set of tools at their disposal to ensure that they are in control of their own brand. Academics have long been judged, albeit crudely, by the volume of their published work and their ability to place it in the “right” journal. In the commercial world, by comparison, personal branding is often subsumed into the brand of the corporate paymaster. In this context letting personal branding become visible raises important issues of trust often buried by blanket bans on the use of social media for example..On the other hand, employers are increasingly using social media tools to vet applicants before offering them interviews. Such techniques range from searching the applicants Facebook or Twitter feed to conducting large background checks using search engines and other tools.This paper presents significant research into the relationship between corporate and personal branding undertaken across the whole business services sector and presents the results of a survey taken amongst corporate and academic researchers about their own efforts to build and maintain a personal brand. This is triangulated against a survey of companies within the real estate sector seeking out the corporate view.Personal branding cuts across established ideas of employment policy and the monitoring of employees as well as having an impact on the marketing drivers of real estate. It sits at the heart of what property research is and what it might become.

Cheng, Yu-Chun, and Jen-Jia Lin. "Job Accessibility Effects on Apartment Rentals." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The previous studies applied the transaction price to explore the relationship between job accessibility and housing cost and concluded that transaction price and job accessibility are positively correlated. After The Financial Tsunami in 2008, investors turned their capital to more stable investment targets, which include real estate markets, and have resulted in elevated property prices worldwide in recent years. Consequently, house rentals have been getting more important while have not been well explored before. To fill the research gap, this study empirically investigates the job accessibility effects on apartment rentals using sample data in Taipei, Taiwan.This study examines the effects of job accessibility on apartment rentals for different markets, which include building types, and apartment types, and for different transportation modes. There are five hypotheses examined in this study: H1: job accessibility positively affects apartment rentals; H2: the effects of job accessibility on apartment rentals are different among various transportation modes; H3: the effects of job accessibility on apartment rentals are different among various building types; H4: the effects of job accessibility on apartment rentals are different among various property types; and, H5: the effects of job accessibility on apartment rentals are different among various rentals. To examine the hypothesis, this study employs a gravity-type job accessibility index and uses 9,157 observations in Taipei metropolitan area in 2009 as the study sample. The linear regression and quantile regression are both used to analyze the sample data.The results show that job accessibility is positively associated with apartment rentals. And, different building types and property types have different effects of job accessibility on apartment rentals. Also, different accessibility of transportation modes have different effects on apartment rentals. Furthermore, the accessibility effects on low rentals are significantly larger than that on high rentals.The empirical findings of this study make two important contributions to the literatures. First, this study presents new evidence regarding the effects of job accessibility on apartment rentals. Previous studies focused on transaction prices instead of rentals. Second, the findings of the present study provide a reference for governments in developing housing strategies using land-use and transportation measures.

Braun, Thomas, Marcelo Cajias, and Sven Bienert. Labeled properties = Prime Locations? A Spatial View on the Diffusion of Green Buildings In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

In terms of climate change mitigation, the response of the property sector is apparent by the diffusion of green buildings. Hence, it is necessary to analyse its diffusion pattern in order to identify the current stage of adoption. By now, the focus of the green building diffusion literature lies more on the temporal than on the spatial dimension. As one might assume a CSR and image driven demand of international institutional investors for green buildings, this paper contributes to answering the question, if certificates exclusively are a product for prime locations.

Castanheira, Paulo, and João Oliveira. "Land Expectation Value Calculation in Pinus pinaster forestry." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Appraisers often use discounted cash flow (DCF) techniques to value timber and timberland. Land expectation value (LEV) is a standard DCF technique applied to many timberland situations. LEV calculates the value of bare land in perpetual timber production and is often used to value even- aged pine plantations. However, it is also useful in the valuation of immature timber stands and uneven-aged timber stands cut periodically. These models have wide applicability in timberland appraisal situations. LEV as used to estimate the oportunity costs or varoius management regimes for pinnus pinaster forestry in several locations in Portugal. We made modelation to estimate present value of costs and revenues from an infinite series of identical even-aged forest rotations starting from bare land and take a Forest Value (a generalization of LEV): the present value of a property with an existing stand of trees plus the present value of a LEV for all future rotations of timber that will be grown on the property after harvesting the current stand. So we determine when a given stand should be cut; separate the management of the current stand from that of future stands and account for price changes that might occur during the life of the current stand. We will still assume that the rotations and prices associated with the future stands (i.e., the stands that are established after the current stand is cut) will be the same. We show some exemples os land value and timber value for the pinnus pinaster forestry.

Gu, Guowei, Lynne Michael, and Yapeng Cheng. Land Supply To Housing Supply: Evidence From Shanghai, China In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Given its importance, housing has recently once again become a red-hot topic for politicians, economists and others in many western countries, derived mainly from the housing market failures such as unaffordability and short of supply. This prompts new interest in the area. Housing studies has attracted the attention of academics for some time. But the focus has been more on price and demand side than on supply side.DiPasqualh (1999) raised the question of “why don’t we know more about housing supply?” and offered the explanation that this is “because there is so little information where the unit of observation is the builder, investor, or landlord.” One decade later, the problem of lack of segregate supply side information still haunts housing researchers. “Aggregate data is sufficient for addressing cross metropolitan variation and works well for documenting housing market time series.” But without incorporating the micro data of the individual supply units, it is difficult to better understand the individual behaviour that determines these aggregate patterns. (Murphy, 2010)By using the data of 907 individual housing projects from the official website managed by Shanghai Housing Administration Bureau, the registration of the projects on the website being mandatory for all housing developers who want to sell the housing in the market and the information being public access free, the paper tries to unravel the mechanism of how land supply, one of the fundamentally important inputs, influences housing supply by investigating three issues: 1) how aggregate housing supply responds to major external economic and financial factors which include land supply; 2) how the land supplied is developed to produce the housing supplied in terms of area (square meter) and unit (flat or house); 3) how long the production process lasts from the purchase of land to the marketing of housing.DiPasqualh, D. (1999) Why don’t we know more about housing supply? Journal of Real Estate Economics and Finance, 18:1.Murphy, A. (2010) A Dynamic Model of Housing Supply. PHD thesis, Washington University in St. Louis.

Leshinsky, Deborah Miriam. Legal implications for property valuers and property professionals In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This research paper will show the challenges property valuers and property professionals are facing in their working environment and an understanding of the current job requirements in regard to what they are required to do according to the law. A property valuer is hired to place a dollar value on a property. Hyam (2004) mentions that the valuation of land and building involves a matter of judgement and those opinions vary on this subject matter.Property Valuers concerns are about whether they are acting within the law for the last few decades have impacted on individuals at an increasing rate. In addition to property valuers doing their job there are always concerns about their limitations within the industry. This topic pertains to other professionals in the property real estate industry as well.This article will look at case law and relevant guidelines for property valuers and professionals who are at times scrutinised. We professionals are attending risk seminars and working for organisations that follow protocol, however there are still some concerns about what is and is not permitted that are not addressed every day which need to be examined closely. This paper will be both informative and instructional for universities teaching new property laws and also property valuers starting up in the industry and more experienced property professionals who have obtain bad habbits over the years.This paper will show entry level valuers as well as more experienced valuers that there are restrictions and constraints in their role as a valuer. Additionally will focus on field notes, sales evidence provided, valuation methods and several reasons why valuers are sued and at what point in the sales/valuing process the lawsuits usually occur and what the typical outcomes are. Few studies to date have directly addressed recent court cases and duties of property valuers and or property professionals in regards to negligence. In this study and research paper it will be shown principles that can be followed by property professionals that will make property professionals aware of their duties and in turn reduce potential court cases in the future, both on an international and national level. Liability insurance and premiums on current insurance will also be addressed. Insurance premiums are escalating every year; reasons for this will be explored in relation to the working professionals through there every day working life.

Key, Tony. Leverage, risk and appraisal methodology in commercial property investment: it’s the way we teach them In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Recent research (notably Fuerst et al, Drivers of Fund Performance, INREV 2013) has revealed the negative impacts of leverage on returns to investors in commercial real estate over the last decade. As usual in post-crash inquests, it is most common to blame bank lenders for “rash” lending in booms, followed by investors or managers for “rash” borrowing. This paper argues that some of the blame also lies with the appraisal methods applied to leveraged investments, and therefore ultimately with the way those methods are taught. A schematic valuation model, based on standard WACC and DCF calculations, is used to investigate the often misunderstood factors – inter alia the relative pricing of real estate and debt, relationships between asset returns and interest rates, asset income growth, tax regimes - which determine the risk adjusted returns on leveraged compared to unleveraged investments. The model is used to illuminate the critical conditions necessary to produce risk-adjusted return - or even absolute returns - on leverage investment superior to unleveraged investment. It is suggested that the prospectuses for leveraged real estate funds presented to investors should include quantified risk statements showing these critical conditions, plus the probability distributions of likely outcomes. In addition, the paper reviews the treatment of leveraged risk in the most widely used appraisal textbook, and (via an informal survey) the appraisal models applied by leading fund managers. In both cases, it is argued that a lack of explicit treatment of risk and risk adjusted returns has contributed to the excess leverage of commercial real estate, and therefore that teachers of appraisal methodology need to go well beyond the current standard texts in their treatment of leverage and risk.

Cherfouh, Souad. Long-run Equilibrium for the Greater Paris Office Market and Rental and Demand Adjustments In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

While there is an abundant literature on office market modeling, only few studies focus on the Greater Paris case. This article aims at contributing to the understanding of the Parisian office market underlying mechanisms. We combine the use of cointegration techniques to a multiple structural break approach to model the market over the period 1991-2012. We employ a two stage error correction framework to identify both long and short-run market determinants in the context of rent and demand relationships. The findings show that once made allowance for level shifts in the long-run relationships, the specified models explain relatively well the Parisian market. The results highlight the role of the vacancy rate as a long-run driver of rental values while both employment and rents explain long-run office demand. Yet, in the short-run, lagged dependent variables appear to be drifting both variables away from their equilibrium.

Barthélémy, Fabrice, Francois Des Rosiers, Michel Baroni, and Charles-Olivier Amedee-Manesme. Market Heterogeneity and Investment Risk – Applying Quantile Regression to the Paris Apartment Market, 1990-2006 In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Since the second quarter of 1998, and with the exception of the 10% downturn experienced in the first half of 2009, apartment prices in Paris have been rising steadily. Their pace of growth even accelerated from early 2010 onward and, unless interest rates are raised to their historical trend levels – which remains highly improbable, most “arrondissements” are still expected to experience value rises over the years to come due to both the relative scarcity of apartment supply and the profile of buyers that are little affected by the current European economic crisis. In the presence of market heterogeneity, the ability of traditional appraisal methods to capture the true property market value may be questioned and emerges as a major issue for local authorities that collect property tax as well as for mortgage lenders confined to tight lending provisions in a crisis context. Assessing such differences in a reliable way is a step forward towards improving mortgage lending risk management. In this paper, the heterogeneity of the Paris apartment market is addressed through assessing the differences in both the hedonic price of housing attributes and price appreciation over time for various price, hence income, segments of the housing market. For that purpose, quantile regression is applied to the 20 “arrondissements” as well as to the 80 neighborhoods, or “quartiers” (each “arrondissement” is composed of four “quartiers”) and segmented constant-quality house price indices are computed and compared with an overall index. The database, which is provided by the Chambre des Notaires de France, includes cases spread over a 17 year period, that is, from 1990 to 2006. Housing descriptors include, among other things, the building age, the apartment size and the number of rooms, the floor level, the presence of a garage, the type of street and access to building (boulevard, square, alley, etc.) as well as a series of location dummy variables standing for the “arrondissements” and “quartiers”. Preliminary findings suggest that, during the slump, extreme prices by and large define the efficient frontier, with higher returns being reported for lower-price, central apartments as opposed to a lower volatility for upper-price, outlying ones. During the recovery and boom stages of the cycle, the optimal portfolio is obtained through a blend of middle-price apartments, with a lower volatility and higher returns for central and outlying “arrondissements”, respectively.

Schoenmaker, Dennis, and Arno Van der Vlist. Market Liquidity and Commercial Real Estate Asset Prices: Transaction-Based Evidence tor Prime, Secondary and Regional Office Markets In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper measures the effects of local market liquidity on asset prices. It offers a framework for decomposing asset prices into cash-flow and market liquidity effects. Furthermore, we test for prime, secondary, and regional market differences, it also tests for the lower-end and upper-end price market. For this, we use transaction-based data for office markets in the Netherlands over 1990-2011. The results reveal that market liquidity increases asset prices by approximately 0.8 to 7.0 percent. The market liquidity effect is much more modest in the secondary and regional market compared to the prime market. The market liquidity effect is the strongest on the upper-end of the real estate market and the weakest for the lower-end market.

Lundgren, Berndt. Measuring potential resident’s and buyer’s attitudes towards non-existing residential developments In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Purpose - The purpose of this paper is to show how value creation from a customer perspective can be empirically verified using a structural equation model and LISREL. A video animation of a planned residential project was used in combination with a structural equation modeling approach to statistically verify differences in attitudes towards the design of buildings, the landscaping and the location of a residential project nearby Stockholm, Sweden. Moreover an experimental design was used to investigate the effect of raising estimated market prices by 25 %. The purpose was to investigate if differences in attitudes could be revealed between socio-demographic groups. Proven successful, consumer values can be increased by investigating attitudes towards different design solutions of non-existing residential developments using video animations or 3-D pictures.FindingsStatistical results confirm differences in attitudes held by different socio-demographic groups towards a video animated residential development.Research limitations/implicationsResearch shows how it is possible to analyze for example, design solutions in ongoing and upcoming phases of residential projects. Multivariate techniques can be used to advise developers, architects and planners before large investments is made.Originality/valueThis paper contributes to research in market analysis and real estate development by presenting a new approach in how to perform market studies using multivariate techniques.

Janssen, Ingrid, and Mark Smits. Measuring real estate management performances In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Since the increase of value of real estate is no longer taken for granted, investors are looking for ways to ensure their direct return on real estate. Optimizing the occupancy rate and minimizing operating costs are important issues when calculating the direct return. For that reason, the role of the real estate manager that is responsible for daily management of the investor’s real estate portfolio, has become more important. The real estate manager has to demonstrate to the investor his or her capabilities in managing and controlling rental income and operating costs. The aim of this paper is to define the key indicators for measuring real estate management performances. The measurement of these indicators provides investors important information when improving their real estate management processes and evaluating their contracted real estate managers. Also the paper demonstrates how information about management performances can be shared by real estate investors as well as their managers by means of an online management information tool.

Lin, Tzu-Chin, and Fang-Hsin Huang. Measuring the Outcomes of Anticommons in Land Development In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Housing price in Taipei has been soaring to an exceedingly unaffordable level. Most critics have placed blame on the demand side for the oversupply of capital seeking investment opportunities. This is certainly true, but also seems to be only a partial explanation. For the high price of a good or asset, demand and supply factors shall both be at play. Several recent studies have repeatedly argued that stringent land use regulations shall be responsible in some US cities for their unsustainably high price of housing. This is a supply-side explanation. We would like to through this article add one more supply-side argument for a high housing price phenomenon, at least for a densely populated city such as Taipei. For a city where land plots are small and land ownership is fragmented, its supply of land is almost bound to be inelastic and slow in adjustment. Housing price is in consequence susceptible to how land is supplied. Difficult as it may be, demand-side problems of housing price might be overcome through monetary or fiscal policies. But what makes this supply-side ownership issue a concern for policy is that any coercive measure to force owners to sell his plot or merge it with others is fairly impractical. We employ Gini Coefficient to measure changes in the distribution of size of sites in Wanhua station areas over time before land development. This study area is where Taipei was firstly developed and redevelopment is now in need. It is found that over time the distribution of site size has become increasingly uneven. In addition, a significant proportion of the large sites came from the merger of small sites. However, this assembly process has taken a period of time longer than a usual economic life of buildings. It is therefore difficult not to conclude that the anticommons in land development is in place and has led to an inefficient use of land, thus a tragedy.

MacFarlane, John. Measuring Volatility in Statutory Valuation In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Land and property taxes are important components of a broad-based taxation regime. These are ‘ad valorum’ taxes, imposed on the basis of property values, requiring the generation of regular, cost effective, consistent and accurate estimates of value. It is important that the general public has confidence is the mass valuation process that generates the underlying values.In New South Wales, annual Land Valuations are produced for approximately 2.5 million properties. This paper will describe the basic mass valuation model and discuss a variety of quality assurance related issues. A recent Parliamentary Inquiry into the Land Valuation System concluded that “individual property holders experience material volatility in land values”. This raises a number of questions:•What are appropriate measures of volatility for land values and a land valuation system?•Are the currently accepted and widely used standards (COD, MVP and PRD) able to identify “material” or “excessive” volatility?•If not, what standards might apply to identify “material” or “excessive” volatility?At issue here are questions of identification of outliers and whether they should be removed from analyses which are focusing on trends and standards to be applied to “typical” properties. The paper will focus on these questions using data from the NSW land valuation process over the last decade.

Deschermeier, Philipp, Michael Voigtländer, and Björn Seipelt. "Modelling a hedonic index for commercial properties in Berlin." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Commercial properties play a central role in economics. They are the most important real estate investment class for institutional investors, even more important than the housing market. On the other hand corporations and self-employed people consider commercial properties as input factors, for which especially the quality and costs matter. Despite the fact, that estate agents, consulting firms and banks publish market reports on a regular basis, the commercial properties market lacks behind other investment markets in terms of transparency and data availability, as these reports only monitor very small fragments of the market.On this account the paper aims at developing a hedonic rental price index for commercial properties using supply data for the case of Berlin. The index will be divided in 2 subcategories for office and retail. The data was provided by “Immobilien Scout 24”, a German internet platform. To find a suitable method for constructing an index, the time dummy method is compared to the hedonic imputation method. Our approach focuses on geospatial variables to improve the hedonic functions.

Weberndorfer, Ronald S., and Wolfgang Brunauer. Modelling micro-location variables for hedonic house price models In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

In this paper we model small-scale (micro) location variables using geographic information systems (GIS). These variables include information that is usually not available on a small scale from public sources, for example residential environment, noise, accessibility or elevation. The modeling of micro-location variables is mainly based on grid technology with a resolution accuracy of up to 30 meter covering the whole research area (Austria). We give several examples how to model spatial raster variables using the Python programming language. These variables are then used as explanatory covariates in hedonic house price models. We apply a generalized additive modeling (GAM) framework, where continuous covariate effects are modeled as polynomial splines and unexplained spatial heterogeneity (beyond what can be explained by location covariates) as random effects. We find that additional usage of high resolution micro-location variables improves the model quality significantly. The results are displayed on overview maps for Austria as well as in detail for some selected regions, which allows inspecting the effects of the applied grid technology in more depth. The resulting models are used for automated valuation purposes for residential real estate in a large Austrian bank.

Rodriguez, Ramiro. Modelling residential prices in Spain under the light of cointegrating techniques and automatic selection algorithms In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

In this paper we have developed a VEC model to capture long term equilibrium trends as well as short term dynamics of the residential prices of the Spanish market. A parsimonious model has been selected, based on economic fundamental variables, explaining supply and demand interplay in the period 1995-2012 with quarterly observations. GDP per-capita, mortgage rate, Gross capital formation in dwellings and building starts have proxied demand, supply and opportunity costs. Insights on the impact of these variables on residential prices have been brought to light as well as the speed of adjustment once the price deviates from the long term equilibrium. Our model suggests that the Spanish residential prices adjust relatively fast, with around 22% of the deviation of the long term trend corrected each quarter. Furthermore, house prices are mainly driven by income (GDP per-capita) while impacts on prices are less important if come from variations in mortgage rates or stock changes.The time span used has conveniently allowed us to analyze the market in the recent residential price bubble context. As expected, during this period market rationale drifted from economic fundamentals and shock conditions sprang. Therefore, in our model we successfully identify structural break conditions since early 2008, instance when the residential prices busted in Spain. For this study a comprehensive database of real estate variables has been constructed for the Spanish market. 52 variables (six of them correspond to different definitions of housing prices) have been collected offering a pool of 46 candidate regressors to explain residential prices. In this context we have tried methods of automatic modelling selection using Genetic Algorithms (GA). Preliminary results point to similar results to the structural modelling. Different specifications obtained tend to render the same variables set, including purchasing capacity, opportunity costs measures and housing stock. With some definitions of prices, demographic and credit conditions are added to our structural specification.

Akinbogun, Solomon Pelumi. Modelling Tenants’ Choices with a Negative Externality; the Case of Residential Property Market In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Residential properties are globally recognized as essential part of human life where dealings between landlords and tenants would continue in perpetuity. They encompass bundles of unique characteristics affecting willingness to pay by prospective tenants looking to rent. Therefore, the need to ensure that the common property resource embedded in a property is not over-consumed by landlords to the detriment of market rent and tenants’ welfare is imperative. This study examines the impact of negative externality created by location of graves within residential properties in an unregulated informal property market. In the absence of hedonic expression of values on the observed negative externality, the study applied stated choice method to collect choice data from respondents. In specific term, the research methodology involves the use of choice based conjoint analysis for research design and data collection. Data analysis involves application of basic Multinomial logit model for parameter estimation at aggregate level. In order to overcome the shortcomings of this model, parameters were further estimated using Hierachical Bayes model which allows individual estimation of level effect and internal model validation. Estimation of average contribution of attributes to the tenants' choice process shows a departure from previous studies that found rent as the major factor affecting possibility of renting a residential property. Grave has the greatest impact on probability of choosing a residential property, with 22% contribution to decision to rent. Model also reveals that tenants are willing to accept between 15% and 20% discount of property's market rent to rent a property with grave; however, the discount vary across different location of graves within the residential properties.

Ostroumoff, Charles. Modern Portfolio optimiser techniques enabling more effective property 'market risk' management In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

In this paper I will analyse the efficacy of current property portfolio risk management techniques employed by multi asset portfolio managers and property portfolio fund managers in the UK. I will differentiate between techniques employed at the asset specific level (bottom up approach) and techniques employed at the portfolio level (top down approach). Specifically, I will be analysing property “market risk” (beta) using time series data of IPD Capital Value Annual Returns since 1971. I will be assessing how possible it is to predict bubbles and troughs in the property cycle and then show how effective modern portfolio risk management optimiser techniques, currently employed in other asset classes (equities and bonds), but now available to real estate practitioners with the launch of annual IPD Property Futures could be used to eliminate future expected volatility and downside property market risk. Property Portfolio Risk Management, market risk, beta, diversification, IPD Property Futures, UK

Chaney, Alain, and Martin Hoesli. Multifamiliy Asset and Space Markets and Linkages with the Economy In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

We show that a proper assessment of the linkages between commercial real estate markets and the economy requires state of the art modelling techniques, which treat economic variables endogenously and allow for a number of long run relationships. We therefore use a long run structural modelling approach, which incorporates equilibrium relationships that are predicted by economic theory, in an otherwise unrestricted vector autoregressive model. The application of this approach to Swiss multifamily data for the period 1974Q1–2012Q2 shows that four long run equilibrium relations exist among inflation, long- and short-term interest rates, real M2, real GDP, real construction expenditures, real market rents, and capitalization rates. The analysis of the short run dynamics additionally suggests that the linkages between the real estate and economic variables are bi-directional. Given that the basic principles of macroeconomics and of real estate economics that underlie our model are country-independent, our main findings should provide for a better understanding of the various linkages and feedback mechanisms between any developed economy and its real estate markets and thereby help in the identification and quantification of both market interventions by policy makers and risks borne by investors.

McCord, Michael, Peadar Davis, John McCord, and Martin Haran. New Kid on the Block?: Measuring the Cointegration of house prices in the Northern Ireland Housing Market. In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper investigates the endogenous relationships and characteristics of price data operating between and within the housing sectors comprising the Northern Irish housing market in order to examine the dynamic linkages and causal relationships between six key property types. The paper employs the Johansen cointegration technique, Granger causality testing in conjunction with a Vector Error Correction Model and generalized impulse response and variance decomposition analysis to unearth the extent and resulting magnitude of the relationships across property type. The estimated long-run relationship between house prices appear to have remained cointegrated throughout the sample period, with the exception of the apartment property type. The empirical results show causal relationships between house prices at particular pricing structures, however limited causalities at different ends of the price spectrum – illustrating a clear filtration effect within the NI housing market. Indeed, characterizing the price series patterns enables a dynamic specification of the pricing structure and supports a foundation for a pricing/forecasting model going forward in future research.

Saxinger, Andreas, and Michaela Nachtsheim. New Long-Distance Bus Terminals in Germany In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

For many decades long-distance busses were never of great importance in Germany. This part of public transport was almost exclusively provided by railway transportation. Legally, railway transportation was protected from competition. Applications for long-distance bus line concessions had no chance of success.However the amendment of the German Federal Passenger Transportation Act to 1st January 2013 liberalized the German market for long-distance busses significantly. Entrepreneurs still need an official concession, but for granting concessions, it is irrelevant, whether other bus or railway companies already operate the transportation service applied for. On long-distance transportation routes competition between different bus companies is now possible. Parallel operations are allowed.Within a short time applications for many new connections from different companies were submitted. The acceptance of domestic long-distance bus services by passengers is extremely high. Nevertheless, it becomes evident, that new infrastructure in the form of central long-distance bus terminals for the passengers is required. The German Federal Legislator provides no regulations for this type of infrastructure. The German Federal Passenger Transportation Act only knows the term “bus stop”, which requires signage by the bus company (minimal standard.Long-distance bus terminals can be planned in central or peripheral areas of a city. The location depends on the individual case, e.g. if local authorities contribute financially to the construction of the building or finance the construction of the building completely. Beside urban-planning reasons, also reasons of city marketing can be of importance. The actual operation of the terminal is often transferred to external operators. External operators finance themselves by user fees and rental income from shops and offices. It is essential that external operators act neutrally and non-discriminatory towards all terminal users. In addition, rules are required regulating the possible congestion of terminals operated by external operators.

Rasila, Heidi. New service development in public sector tenant-landlord context In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

In Finnish context some landlords in business-to-business context are seeking ways to widen their service offering to cover more aspects of the corporate real (CRE) function of their tenant. The window for offering such services is open, as at the same time tenants understand better the importance of the CRE function and they still lack the ability to carry out CRE activities themselves. This is especially the case in SME’s.This paper looks at the service development process of one big Finnish real estate actor. The aim is to understand the potential area of the CRE related services that may be provided by the landlords to commercial tenants. Secondary aim is to look at the hindrances and enablers that affect the potential to widen the service offering to CRE services in commercial rental business. The methodology of this paper is based on action research philosophy. The material for the article is gathered with interviews and workshops in the case organization. The process is iterative in manner and the previous interviews and workshops provide input for the next ones. Thus the paper outlines the service development process in the case setting. The findings suggest that there is a wide range of CRE related services that the landlords may offer to their tenants in commercial context. There are still some CRE management activities that are so close to the tenant core business, that these services will probably not be outsourced. Finally, the research suggests some hindrances and enablers to providing the CRE services for the tenant. The enablers include, for example, the expert knowledge in real estate business while the lack of marketing and communication skills in realm of services is an example of hindrances. Theoretically this article adds the amount of empirical research in the service development and services marketing fields. The article takes a look at one field of services that is not so often studied. Further, the article offers insights into service development for the practitioners in landlord organizations and other business-to-business actors in real estate field.

Akimov, Alexey, and Simon Stevenson. Non-Linear Mean Reversion in the Discount to Net Asset Value of Public Real Estate Firms In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Using both aggregate and firm level data we consider the divergence in the share prices of UK listed real estate firms relative to their Net Asset Value (NAV). Whilst it is often argued that REITs should trade close to their NAV the existing empirical evidence has often provided quite distinct results. The UK market is of interest in a number of respects. Firstly, due to the adoption of IFRS accounting standards in the UK, regular estimates of market value NAV are available. This is in contrast to markets such as the US where REITs place their real estate assets on their balance sheet at historic depreciated cost. Secondly, the UK only introduced REITs in January 2007. Prior to that date all listed real estate firms adopted a standard corporate structure, meaning that factors such as Contingent Capital Gains Tax played a major role in the premium-discount of the shares to NAV. As we have data available from 1990 this allows us to examine whether the dynamics altered following the introduction of the REIT regime. The data used is obtained from EPRA and runs from the early nineties until 2013. The methodological framework adopted in this study is based upon recent studies in the field of Purchasing Power Parity. There are a number of marked similarities between the study of reversion towards PPP with foreign exchange rates and the behaviour of public real estate firms relative to their NAV. The paper builds upon a relative small literature that has considered public real estate (e.g. Barkham & Ward, 1999; Liow, 2003; Liow & Li, 2006; Patel et al., 2008). We expand upon these existing studies in a number of respects. Firstly, we specifically utilize recent methodological advances with respect to the use of non-linear unit root tests (e.g. Sarno et al., 2004; Chortareas et al., 2008; Menkhoff & Rebitzky, 2008; Wu & Lee, 2009; Norman, 2010). Secondly, we not only empirically consider sector wide measures but also test for deviations across individual firms in a panel setting, as a number of recent PPP studies have similarly done so (e.g. Frankel & Rose, 1996; Coakley & Fuertes, 1997; Kaloncu & Kalyoncu, 2008; Chortareas & Kapetanios, 2009; Lau, 2009; Wu & Lee, 2009; Chang & Su, 2010; Koedijk et al., 2011).

Borst, Jeanne, Hilde Remøy, and Philip Koppels. Now hiring; Wanted - User of tomorrow for space of the future In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Purpose - The purpose of this paper is to explore decision-making from the perspective of different types of investors for future use of vacant offices. The change of the Dutch office market into a buyers’ and replacement market in combination with the continuous overproduction and oversupply, contribute to (structural) vacancy in the real estate portfolios of real estate investors. This vacancy is often the result of a qualitative and quantitative mismatch in the performance of the office building. A well-substantiated decision-making process is essential for investors to make balanced decisions. As such, vacancy management can enhance the decision-making with regard to the future use of office buildings from the perspective of the value-add and core-plus investor. Design/methodology/approach – This paper defines the selection criteria investors use to categorise properties in deprived, mediocre and promising properties. Consequently, the determining criteria and their relative importance for future use of a vacant office building are studied, based upon three partial Delphi studies. These three Dephi studies include criteria on market, location and building level for consolidation, within use adaptation and conversion of an office building. Findings – The results of the Delphi studies are used as input for decision-making about vacancy on portfolio level. Vacancy management enables insight in the qualitative and quantitative (mis-)match of the office portfolio based on the most important criteria on market, location and building level. Practical implications – Possible actions are presented to support decision-making for future use of (vacant) offices for the value-add and core-plus investor. Based on the Delphi studies, buildings are compared and rated to describe the possibilities for different types of future use. Consequently, this paper supports the establishment of a strategy for an (vacant) office building within the portfolio, leading to a practical framework for vacancy management.Originality/value – This paper aims extending existing scientific knowledge by focusing on vacancy management at portfolio level from the perspective of an investor. Vacancy management can contribute to understanding and extending the solution space for problems related to vacant buildings and opportunities for future use of such properties.

Koppels, Philip, Hilde Remøy, and Ruud Boots. Office Market Dynamics: The Workings of the Amsterdam Office Market In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Conventional economic theory dictates that higher vacancy levels should lead to downward price-pressure and lower (real) average office space rent levels. Despite this, the reported average rent levels do not demonstrate the sever price decrease one might expect. Previous studies and inductive reasoning indicate that three main factors might explain this seemingly paradoxical situation. Understanding these factors requires further investigation and are identified in this research: First, the reported rent indexes might not accurately reflect the current price level for the use of office space, because the indexes are not corrected for lease incentives; possibly concealing the downward price effect of the currently higher vacancy rate. Second, the reported vacancy levels might not accurately reflect the prevailing space market condition, because the figure is distorted due to inclusion of outdated supply, which it is not considered a viable accommodation alternative. Finally, the scale of the analysis might not reflect the actual market process. Urban office markets are considered to consist of a system of interrelated submarkets. However, most studies model the market as an unitary – city-wide – office market, ignoring the spatially and functionally segmented structure.This paper investigates the office space supply and rent development relationship, within a rental adjustment framework. For this purpose a lease transaction and supply dataset was collected, spanning the period 2002-2012, in combination with the compilation of an office stock database. For each lease transaction data were collected regarding the (initial) asking rent, initial contract rent and the effective rent (contract rent corrected for lease incentives). Consequently, different rental adjustment models were specified and compared in accordance with the formulated hypothesis; considering the three possible factors effectively concealing the market mechanism.

Verhoeff, Tim J., Monique H. Arkesteijn, Ruud Binnekamp, and Hans de Jonge. "Optimising Juridical-financial Flexibility of Corporate Real Estate." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Societal developments are timeless and occur at an ever increasing pace that affects demand for Corporate Real Estate (CRE). Real estate flexibility, as part of a CRE strategy, enables the ability to anticipate on those uncertain societal developments. Many studies refer to real estate flexibility which could be grouped into physical; technical; organizational; and juridical-financial flexibility. The focus in this article is on the latter.Juridical-financial flexibility is the management ability to quickly decrease real estate expenses or to quickly increase real estate benefits if the quantitative demand for space changes. The inclusion of juridical-financial flexibility can assure that the risk of redundancy or shortage of space is minimized through short term leases. However, it is accompanied with additional costs which makes maximal flexibility unprofitable, thus the question is which level of juridical-financial flexibility is optimal?We have built a decision model to determine the optimal level of juridical-financial flexibility in CRE portfolios, an operational step that is missing in the field of CRE management. The decision model is a linear programming model that produces a strategic recommendation to CRE management by defining the portfolio compilation with an optimal juridical-financial flexibility level. At this level, the financial investment in juridical-financial flexibility is minimal while the mix of juridical structures guarantees the ability to anticipate on an uncertain quantitative CRE demand in the future.In literature, several models have been developed that could be used to differentiate CRE assets into peripheries, based on their envisioned future strategic role. With these existing models, four peripheries are composed with the objective to link CRE assets to an appropriate juridical format. These peripheries are: the core ownership periphery, the core leased periphery, the 1st periphery, and the 2nd periphery.Next to the quantitative demand for space, also the qualitative demand is an important asset level aspect, at present and in the future. Therefore, the differentiation approach is applied per user profile to combine the two dimensions.The future demand for corporate space has an uncertain value, which is tackled with the differentiation approach, but to determine periphery sizes, three scenarios are developed with the current demand as a starting point.To transform a current into a future desired CRE portfolio

Rochdi, Karim Fabrizio S., and Marian Alexander Dietzel. Outperforming the Benchmark: Online Information Demand and REIT Market Performance In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Purpose: The purpose of this paper is to investigate whether there is a relationship between asset-specific online search interest and movements in the US REIT market. 

Design/methodology/approach: The authors collect search volume (SV) data from “Google Trends” for a set of keywords representing the information demand of real estate (equity) investors. On this basis, the authors test hypothetical investment strategies based on changes in internet SV, to anticipate REIT market movements.

Findings: The results reveal that people’s information demand can indeed serve as a successful predictor for the US REIT market. Among other findings, evidence is provided that there is a significant relationship between asset-specific keywords and the US REIT market. Specifically, investment strategies based on weekly changes in Google SV would have outperformed a buy-and-hold strategy (0.1 percent p.a.) for the Morgan Stanley Capital International US REIT Index by a remarkable 15.4 percent p.a. between 2006 and 2013. Furthermore, the authors find that real-estate-related terms are more suitable than rather general, finance-related terms for predicting REIT market movements.

Practical implications: The findings should be of particular interest for REIT market investors, as the established relationships can potentially be utilized to anticipate short-term REIT market movements.

Originality/value: This is the first paper which applies Google search query data to the REIT market.

Multescu, Gheorghe Petru, and Jeannine Eder. Outsourcing Corporate Real Estate Asset Management (CREAM) services as part of supporting cost-efficiency in the banking sector: Does it work? In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The 2008-9 financial crisis left its mark on the European banking sector. States had to intervene in many cases in order to rescue banking institutions struggling with increasing levels of bad loans. Adopted solutions included the creation of vehicles for bad assets alongside the creation of strategies for luring property investors. At the same time banks were faced with internal restructuring in an attempt to cut costs and comply with new European financial regulations. In dealing with Corporate Real Estate Asset Management, cost-efficiency led to the selection of a number of main drivers in aligning strategic business objectives with the Corporate Real Estate Strategy. Against this background outsourcing of CREAM services regained senior management’s attention: however what is the best practice and how can this process meet the core strategic business objectives? The paper examines the implications of the banking sector restructuring process in Germany, with a particular emphasis on the centralisation of real estate competencies in a wholly owned subsidiary (WOS). The challenges of using this vehicle as a catalyst for aligning strategic business objectives with the bank’s Corporate Real Estate Strategy are also critically appraised. A case study approach is used, involving mainly qualitative data analysis of one of the German Landesbanks. The effects of the specific model of outsourcing are analysed from a ‘client’s perspective’. Main findings emphasise the importance of retaining control over CREAM and solutions to the ‘dilemma’ of reconciling divergent interests of shareholders and third parties involved.

De Bruyne, Evi. "PACT: Calculating nWOW accommodation that suits the organisations’ work processes." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Workplace change and New Ways of Working seem to have become a fixed value in FM practice in the Netherlands today. Stimulated by new technological possibilities and maybe even by the world-wide crisis, companies are rethinking their office environments. The possibility to work anytime and anywhere seems key. However this requires a different approach to quantify the needed space and determine the types of workplaces to fit an organisations’ processes.Since one employee is no longer automatically linked to one (specific) desk, and employees are expected to choose an appropriate workplace depending on the task at hand, the calculation of the needed floor space has become more complex. The expected attendance (presence in the office) needs to be quantified to give an indication of how much ‘desk space’ needs to be facilitated. However one also needs to take the activities that employees perform into account, to be able to specify different types of workplaces that can accommodate them. For this purpose a new calculation model was created. The PACT (Places and ACTivities) calculation model allows us to gain insight in the number and type of spaces needed, modulated by different scenarios and fitting to the organisation and its work processes. Additionally calculations can be limited to an existing framework (e. g.: the dimensions of the current building) as calculating a completely ‘hypothetical’ building often has little value. New variables in the model allow for calculations to be limited by dimension and time constraints.Different scenarios help to discover which space requirements fit the ambitions and work processes of the organisation best. Through manipulation of different variables in PACT, valuable insight can be obtained into the number of work spaces (of specific types) needed. Moreover they allow us to consciously consider an ‘allowed level of margin’ while determining the dimensions of a work space (where the possibility of providing too many work places and the possibility of providing too little places is optimal).

Farrelly, Kieran, Michal Gluszak, and George Matysiak. Panel Modelling of European Office Market Rent Dynamics and Asymmetries In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The study makes use of a panel dataset for twelve European cities provided by DTZ and augmented by financial and business services employment data provided by Oxford Economics. In recent years there has been significant development in panel testing and modeling for non-stationary panel data and ‘macro panel datasets’ i.e. where the number of time series units is greater than the number of cross section units. Notably, most prior panel work on rent dynamics does not address unit roots and cointegration testing does not address cross section dependence and employs unsuitable methods for the modelling of macro panel datasets. As a consequence of cross section dependence, panel estimators may be biased and inconsistent, thus the conclusions drawn from most prior panel work on the rental adjustment process may prove to be inaccurate. Employing the latest panel econometric tests and estimation procedures we estimate variants of a cointegrated rental determination model, where asymmetric responses are detected. This has implications and asymmetries should be considered when formulating investment strategies and underwriting future rental growth, together with lease/lease renewal negotiations. Reflecting this aspect of rent and market dynamics should also be considered when undertaking risk modelling involving the projection of rental growth outcomes. If ignored, key asymmetries impacting the risk-return profile of the investment/portfolio under consideration would be missed.

Larceneux, Fabrice, Thomas Lefebvre, and Arnaud Simon. Perceived transactions costs: an explanation of the real estate brokerage In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The objective of this research is to study the determinants of the use of intermediated solutions by homeowners. The theoretical perspective of perceived transaction costs provides a relevant framework for understanding the existence of this type of transaction in the real estate sector. From a survey, a large and novel database was collected : 3992 responses relating to effective completed transactions in the French Real Estate Market. A conceptual framework based on expected earnings tested empirically shows that five major reasons explain today the real estate brokerage. Three commercial arguments used by real estate agents to convince their owners entrust their mandates are explored as influencing the choice of the type of transaction via the mediation of the five perceived benefits.These results may be useful to brokers in order to improve their communication toward consumers both mentioning the perceived benefits and illustrating them with concrete commercial statements linked with them. Estate agents get new opportunities to transform their economic model, no longer basing their business solely on the informational advantage, but on a more general proposal of agency services that certain decision-makers perceive as useful.

Bouchouicha, Ranoua. Performance of Asian REITs in a portfolio context In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Due to their diversity and maturity, Asian Real Estate Trusts presents an interesting investment asset that has an increasing impact in a portfolio management. In this paper, we investigate the role of Asian REITs in a mixed asset portfolio. To the best of our knowledge, this is the first study that investigates the role of Asian REITs in a mixed portfolio taking into account the post 2008 crisis period. We look at the performance of Asian REITs using the market portfolio theory and different performance measures. In addition, we draw the main stylized investment characteristics of Asian REITs (focused versus diversified strategy) and their performance in a currency hedging strategy. Furthermore, we explore their performance in an international portfolio context.

Farrelly, Kieran, and Simon Stevenson. Performance Persistence and Capital Formation in Private Real Estate Funds In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This study examines whether closed-ended private real estate funds exhibit performance persistence across vintage years. The relationship between capital flows and track-record, namely the performance flow relation, is also analyzed. The results provide evidence that performance persistence is a relatively short-term phenomenon for these investment conduits, both across fund family vintage years and the time period between successive fund launches (the overlap period). When considering performance on an ex-ante basis which is the track record investors can observe when committing to a newly launched fund, this persistence effect disappears. However, underperforming funds show a strong persistence effect when performance is measured on an ex-post or ex-ante basis but no performance flow relationship. This can be attributed to the actions of less sophisticated investors. Conversely outperforming funds, which we would expect to be backed by more sophisticated investors, show no performance predictability but do have a positive performance flow relationship. These results are consistent with the predictions of the Berk and Green (2004) model.

Arslanli, Kerem Yavuz. Planning Istanbul: “Central vs Local” Real Estate Markets In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

After 2002 economic restructuring encouraged the growth in Turkey. Between the years 2002 and 2006, Turkish economy has grown by 7.5%. Consequently, private consumption expenditure have increased by 8% annually, by 6% per capita and private sector investments in fixed assets have increased by 23%. In parallel, the housing and commercial real estate sectors have also demonstrated a considerable growth. Foreign capital investments and the shares of international investors in commercial real estates have also increased. In this paper multi-centre development of Istanbul is investigated with respect to Office, Retail and Residential markets. The Central Business District of Istanbul begins with the Barbaros Boulevard, continues along the Büyükdere Avenue and reaches to Maslak. The high-rise plaza type offices on the Esentepe-Zincirlikuyu-Levent-Maslak direction have contributed to the development of this central business district. This paper investigates and models the possible outcomes of additional 3 million population among districts of Istanbul as the local planning authority predicts.

Haran, Martin, Alastair Adair, Jim Berry, Allan Kotin, Richard Peiser, and Bing Wang. Practice of Public and Private Development in Mixed-used ProjectsPartnership Models for Public-private development: an international comparison In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Joint ventures between the public and private sectors for large-scale mixed-use development projects stem from a widely used model conceived in the United States in the 1970s, with a specific focus on downtown redevelopment. Beginning in the 1990s, as more cities in the world experienced post-industrial transformation and public resources were dwindling, collaborative efforts by public and private partnerships offered significant and mutually-beneficial advantages in terms of efficiency, flexibility, and risk sharing principles for project delivery. This paper establishes a framework of key criteria for use in evaluating the effectiveness of public and private development as a vehicle for constructing and delivering the dual purposes of regeneration and sustainability for the mixed-use development in various urban fabrics. Two development projects are selected and examined as case studies: one from the European/British context and one from the United States. They are the Liverpool ONE scheme in Liverpool City Centre and the California Plaza development in Los Angeles. Although the projects and public and private joint ventures are site-specific and context-bound, a conceptual framework is important for both the public and private sectors to identify opportunities and avoid potential pitfalls. In this paper, through the comparative examination and analyses of institutional structures, financing arrangements, delivery mechanisms, channels of public participation, and the key milestones represented by physical characteristics identified within the development processes, the dynamics of public and private developments are examined. The paper compares the partnership models under the different regulatory regimes in the United States and Europe and evaluates the success of the two case studies both from the private sector and the public sector perspectives. It also summarizes the possible evaluative parameters including costs and benefits of each project relative to regeneration and sustainability, some of which promise value for universal application.

Valks, Bart, Monique H. Arkesteijn, Ruud Binnekamp, Peter Barendse, and Hans de Jonge. "Preference-based Accommodation Strategy - A pilot study in scheduling and planning at the Delft University of Technology." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

One of the long-standing issues in the field of corporate real estate management is the alignment of an organisation’s real estate to its corporate strategy. Despite extensive research, existing approaches have not had much uptake in practice and fall short in a number of aspects (H 2011). In 1995, Dutch universities became owners of their real estate, and since then they are confronted with the same issue of alignment. Investments in real estate need to be weighed against investments in education or research programs, making campus management more challenging with more stakeholders, opportunities and threats to consider. Furthermore, this allocation of resources is put under pressure because of decreasing public involvement and funding for Dutch universities. As a result, campus managers have indicated that they need better information and tools to support campus decision making. (DH 2011)To enhance real estate decision making we tested the Preference-based Portfolio Design methodology (PBPD) (A&B 2012) in a gaming context. In this methodology decision makers define criteria and iteratively test and adjust these criteria by designing new real estate portfolios. The new portfolio with the highest overall preference is suggested as the portfolio which optimally aligns real estate to corporate strategy. This process is termed ‘Preference-based Accommodation Strategy’ (PAS). PAS is tested at the Delft University of Technology (DUT) for its real estate portfolio of lecture halls. New portfolio design are made based on 1) stakeholder preferences, in order to optimally align real estate to corporate strategy; and 2) the feasibility of the university’s timetable, in order to ensure that the portfolio design is able to accommodate the university’s programs. The decision makers could not only choose from real estate interventions but also from organizational interventions, which change the scheduling process. The tests done at the DUT prove that the participants are able to use the PBPD methodology to define criteria and that they are able to design portfolios with a higher overall preference. The results suggest that PAS can be used as a tool to align real estate to corporate strategy and to support campus decision making.

Culley, James, Liam Bailey, and Mikael Postila. Prime London Housing: Drivers and submarkets In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The prime housing market is an area of research in which there has been limited attention given in recent academic studies. In this paper we try to identify drivers behind the formation of prime residential property submarkets. We argue that as well as relying on prior knowledge and assumptions of property agents and market participants, the submarkets can and, to an extent, should be derived empirically. As an example we compare our empirically defined submarkets with boundaries defined by experts and analyse differences. We recognise the differing motivations between defining a submarket through prior knowledge versus empirical means and try and evaluate the benefits of combining both methods. London is one of the largest prime residential property markets with a significant amount of foreign ownership, and thus it was chosen as a pilot for our prime submarket research. Drivers for prime residential real estate differ from the ones for the rest of the residential markets. We compile the appropriate dataset for London markets by using Knight Frank’s own transaction data supplemented with information from Land Registry in addition to relevant socio-economic and economic data sources. Spatial and locational effects are accounted for both in the methodology and variables within the models. In this study we utilise a combination of hedonic modelling, principal component analysis and cluster analysis. We will build upon previous studies into defining housing submarkets by assessing the suitability of incorporating local spatial econometric principals into the methodology.

Sundberg, Anna, and Ana Chadburn. Priorities in Workplace Performance: a measure of spend and design In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Background: The highest cost to any business is labour and in the UK this is typically followed by real estate (Bootle, 2002). How property affects business performance has been the focus of academic study for some time. Generally well procured and well managed space is thought to bring increased productivity, flexibility and enhanced corporate image (Krumm and De Vries (2003)). Occupiers’ response to a more competitive business environment has perhaps foremost been focused on attempts to save on real estate costs by occupying space more efficiently. Generally buildings now have to work harder with the allowance of space per worker is reported to have decreased from 12-17 sq m per work station to 8-13 sq m (BCO, 2013). Arguably we are only beginning to understand the impact that the office environment can have on business performance. Recent research has focused on the impact that the working environment is having on employees’ health and wellbeing measured through levels of employee satisfaction (Leaman, 1994), absenteeism (Preller, 1990), staff turnover (CABE, 2001) and the ability of the workplace to support different activities (CABE, 2001). This paper intends to measure annual spend on office occupancy based on rent, fitting out cost and maintenance and will investigate which property attributes that are prioritised in terms of spend amongst employers. Purpose: The purpose of this paper is to investigate the emphasis placed on creating a workplace environment that is ‘right’ measured through levels of spend on a range of property attributes thought to contribute to business productivity.Method: The paper will be based on survey of three categories of employers, namely professional services firms, financial services firms and media firms, whose working practices and culture are significantly different. The survey will be supported by a literature review of publications to date which considers employee satisfaction, productivity and workplace design.Results/conclusion: The paper will highlight employers’ awareness of office design features and their perception of their relative importance in terms of supporting business success and productivity. Results will also highlight the spend and design priorities and enable an analysis of the correlation between these and the attributes perceived to enhance the office environment and supporting business performance and productivity.

Mansell, Greg. Private Real Estate: From Asset Class to Asset In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The paper comprises two key sections; the first explores the role of real estate in multi-asset portfolios and the importance of different measures of market risk when allocating to the asset class. The second section covers active risk focusing on the significance of strategic and asset-specific factors when investing domestically and across global markets. Together these themes represent critical considerations for real estate investors, and provide an important context for ongoing research into the role of real estate in multi-asset-class portfolios.When investing globally, investors should take a long-term macro view on national economies and real estate markets, as countries can consistently outperform or underperform in the long run. However, despite the importance of market factors, active risk is unavoidable when investing directly and remains an ever-present consideration. The paper identifies the proportion of active risk that can be driven by the market and the proportion that can be driven by asset-specific factors, for an average-sized portfolio.The global portfolio results show a fairly even split between the variance of market allocation scores and property selection scores. The domestic portfolio results for the UK and US markets show that around 60% of the variation in tracking errors, between the portfolios and the benchmark, is attributable to property selection. The rest of the variation could be attributed to the market components of the benchmark.

Garimort, John. Property and Infrastructure: Correctly separated at birth, or economic tomfoolery In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

There are a number of articles already published that include discussion on the characteristics of property and infrastructure (see Davis 2009, Peng and Newell 2007, Finkenzeller et al 2010, Bitsch, et al 2010). At an asset specific level there appear many more similar individual characteristics of property and infrastructure than there are material differences. Despite this, the vast majority of academic opinion sides on the view that the two asset classes are different. Investor behaviour also now places these assets under the care of different management teams. This research offers some alternative views that add to the current thinking. This paper argues that a definitive classification of the risk reward characteristics of infrastructure cannot yet be made, and will in all likelyhood never be able to be statistically quantified without adjustments to base data. Further, amalgamating a large number of investments with very different attributes might be a convenient data source for research, but is sub-optimal from an academic and practical point of view.

van de Wetering, Jorn. Property and sustainability - identifying the risk gap In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Many studies have sought to establish the direct financial impacts of ecolabels on properties, however, it has also been proposed that the impacts of sustainability issues are more likely to manifest themselves through property risk adjustments over time, depending on the sustainability performance of buildings. Accelerated depreciation of buildings with inferior sustainability attributes may lead to new forms of sustainability-related obsolescence.Under the European Energy Performance of Buildings Directive (EPBD), buildings in the UK are assessed using energy labels (EPCs and DECs), thus providing the property market with signals regarding the energy performance of buildings. The Energy Act 2011 will make it unlawful for private landlords to rent out residential or business premises that do not achieve minimum energy efficiency standards and these will most likely include those that achieve EPC F and G ratings. This legislation is likely to impact on a significant number of buildings.Building on existing theories that investigate the impacts of ecolabels on property values, this study investigates sustainability-related risks that properties in the UK are exposed to. The study will provide a theoretical basis for the impacts that key sustainability drivers are likely to have on the property industry. It will then assess various types of building sustainability risks. Finally, the study will explore which types of properties will be most strongly affected by these risks.The results of this study provide further insights into the scope of sustainability risk-related challenges that properties may face in the future and how such risks can be identified and managed.

Gluszak, Michal, and Bartlomiej Marona. Property Tax and the Fiscal Independence of local government in Poland In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

In order to provide a sufficient level of public services, a municipality - as a basic unit of local government in Poland - must be supplied with an adequate level of regular revenues. In a long run the level should rise proportionally to the development of the region. The main purpose of this article is to describe a role of recurrent taxes on immovable property in local government revenues in Poland. In the first part of the paper, we address the problem from international perspective, and examine revenues from recurrent taxes on immovable property in OECD countries. In the second part of the paper, we:(i) explore differences in property tax policy at local level, (ii) analyze similarities between local municipality in Poland with the use of cluster analysis,(iii) analyze relations between tax policy and tax revenues.

Wojewnik-Filipkowska, Anna, and Alasad Raaja. Public-private partnership in transportation infrastructure – comparative analysis of selected case study in United Kingdom and Poland In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Transportation infrastructure is an essential component of our physical environment. This article is primarily about investigating public-private partnership in motorways in order to understand the potential for its application, improvement, and secondarily about comparing public-private partnership in transportation sector in United Kingdom and Poland. The research takes a qualitative approach focusing on the process of project organisation, financing, realisation and functioning. The governance process is analysed to define main actors, the rules they interact with and their rationalities to participate in the project. This analysis includes locality-specific regulations review, literature study, case study documentation investigation and finally interviews with key informants. The case studies analysis is undertaken against the background of a survey of public-private partnership in transportation in UK and Poland. The results of the study can be useful for public managers and private investors. The main conclusion of the research is that the different countries, different legal and financial determinants lead similarly to public-private cooperation, however the detailed solutions have been different.

Papastamos, Dimitrios, and Simon Stevenson. Rationality, Bias and Accuracy in Housing Start Forecasts In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The paper compares and contrast the bias, accuracy, and uncertainty in US housing start forecasts. In comparison to the large forecast accuracy literature to have considered macroeconomic series a relatively smaller number of papers have considered the accuracy of property forecasts. Even in this case the majority have looked at commercial real estate. Papers such as McAllister at al. (2007), Bond & Mitchell (2011) and Matysiak et al. (2012) all consider aspects of the IPF Consensus Forecasts for the UK commercial market. Two recent papers (Pierdzioch et al., 2012, 2013) do consider forecasts of housing starts. Our analysis compliments the analysis contained in Pierdzioch et al. (2012, 2013) who concentrate on whether forecasters tend to herd. This paper examines one-year-ahead forecasts, provided by Consensus Economics, covering a total sample period of 1989 to 2012. The focus of our paper is initially on the overall accuracy of the forecasts of US housing starts. Using conventional measures of forecast accuracy we consider the overall performance of the professional forecasts over the course of the an extended cycle. Using a panel framework we then consider the rationality (i.e. bias and efficiency) of the forecasts based upon the Holden & Peel (1990) framework. Finally, building upon papers such as Fulerton et al. (2000, 2001) and Stevenson & Young (2007), we compare the accuracy of the published forecasts with econometrically estimated forecasts.

Constantinescu, Mihnea. Rationally irrational or irrationally rational? Risk perceptions and their influence in the investment process In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The current study explores the degree to which real estate investors rely on extrapolation to form expectations about future returns and risk and whether pricing is influenced by cognitive biases. A survey of Swiss institutional market participants elicits past portfolio returns and risk as well as expected values of return and risk over a one-year period. The data is employed to test the consistency of the relationship between expected risk and return. This test is based on simple relations between vacancy and growth rates in rent as well as on a new dynamic cap rate model derived from Campbell and Shiller’s (1988) dynamic DCF model. Preliminary results indicate that the bias caused by the affect heuristic is not present. One explanation, in line with research from the equity market, is that the lack of time pressure and the increased level of financial literacy impede the affect heuristic from occurring.

Coen, Alain, and Benoit Carmichael. Real Estate and Consumption Growth as Risk Factors: An Empirical Asset Pricing Approach In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

In this article our main objective is to study simultaneously the influence of three important risk factors on asset returns, namely the return on financial market (proxy for financial wealth), the consumption growth and the return on real estate wealth. The third factor has been surprisingly neglected by the financial literature: the global financial crisis has highlighted this drawback. More specifically, we develop a linear multifactor pricing model using monthly data of stock returns. For a long period from January 1972 to December 2013, our results shed new light on the relative importance of real estate risk on the 25 portfolios formed on size and book-to-market as computed from the CRSP database. Dividing our full sample in two sub-periods, we compute for each asset an estimate of the beta coefficient of each factor and then the mean risk premia associated. Using our full sample and dividing it in two sub-periods related to the contrasted evolution of the systemic risk (from January 1972 to December 1990 and from January 1991 to December 2013), we present results based on two alternative GMM procedures, the iterated GMM with optimal weighting matrix and the one-step GMM (introduced by Cochrane (1996)). The second GMM specification exhibits clearly, as suggested by Cochrane (1996), estimates with much lower average pricing errors. More interestingly, we report that the return on real estate wealth is a priced risk factor. Thanks to our sub-periods analysis, we are able to show that this neglected factor is useful to explain the cross-sectional variation of returns, especially for the last two decades associated to the so called «real estate bubble».

Maier, Gunther. Real estate appraisal by use of hedonic price regression In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The hedonic price method is well established as a method for deriving real estate price indices and for identifying the factors that influence real estate prices in the market. Despite a close relationship to the traditional sales comparison approach and conceptual and statistical advantages, the hedonic price method is used much less in the appraisal of individual objects. In recent years, locational facors have been increasingly included into the set of explanatory variables as well as into the specification of the error term. This has not only improved the explanatory power of the method, but also introduced additional challenges for the interpretation of results and particularly for the use of these results for the appraisal of individual objects.The paper discusses the hedonic price approach to real estate appraisal and especially its relation to the traditional sales comparison approach. It will be shown that spatial econometric methods can be applied to improve the power of the hedonic price regression. The main part of the paper will be devoted to the question of how to utilize the results of the hedonic regression for appraisal of individual objects, what challenges the different possible specifications of the regression equation on the one hand and of the structure of the error term on the other hand raise. The paper presents algorithms for handling these computational issues and presents simulation results for each case.

Florentino, Teresa, and Joaquim Casaca. "Real Estate Brokers in Premium Segment - Marketing and Communication through Technologies." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The main purpose of this article is to know how Real Estate Brokers that provide Premium products and services are managing their technology. Their clients are big investors, enterprises or people with high incomes and, for this particular segment, we want to know how and how much they are investing in technology and how much is their contribution to business. In this article is studied how is made the management of technology inside these enterprises, how is this technology incorporated. It is also important to know in what management levels of the company are technologies used and what kind of training is given to employees. From external point of view of these enterprises, this study tries to find out how the communication is made to customers and by what means. It is also analyzed the investment that companies make in these new technologies, how these workers spend their time on managing information resources and technologies, especially considering the current mobile technologies, cloud computing, social networking, Global Positioning Systems (GPS), Quick Response code (QR code), Augmented Reality (AR) among other more traditional applications and sources of information. It is intended to know the contribution of Communication Technologies in general and on Digital Marketing in particular, in terms of the Promotion, or in Relationship Marketing. Finally and most importantly, we want to know if there is added value when these means and techniques are used. According to the collection of data and information on three of the most important Real Estate Brokers that work in the Premium segment in Portugal, some highlights and some conclusions can be found about the way of how technologies have influence on Communication and in Digital Marketing, but mainly, how these technologies can have a global positive return. Recently in Portugal, there has been a substantial investment on Real Estate Premium segment and the Golden Visa seems to be behind the big investors. For these reasons, this study deserves a special attention now. There are very few articles on this topic and the significance of this article lies in the fact of the importance of technology in general for all business, and Real Estate Brokers can not be apart. However, is really the same for Premium segment? This research is not enough, should be extended to more cases and compared, when possible, with other segments and other countries.

Sahk, Kaarel. Real estate expertise – legal foundation, standardized environment or generally applied good practice? In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Real estate expertise in its nature may be divided grounded on the different approaches that are clearly describing the substance of it. The first option of diversification is based on the nature of subject of real estate. According the different definitions of real estate is possible to draw done two independent parallels: i) the land and ii) the essential part of it; important is that the both parts of real estate are at the same time as a part of nature and environment and also surrounded by environment as a generic term. As an environment structure hereby the classification into nature and artifact, with their large taxonomy, is also important. Similarly the subject taxonomies, the huge foundation of different legal acts, as overall, as specialized, is remarkable.Named diversification gives to us a scope to converge to expertise from the side of land and to expertise its parameters up till site class. On the other hand, basically the buildings, but also the forest and standing wood may be classified as an object of expertise. Come to rest of the three different procedures they are straight connected with the procedures of expertise, to the scene are paced three similar and at the same time different activities, the expertise of land, the expertise of standing wood and expertise of buildings. In spite of some differences between the sub-subjects of expertise, the necessity of standardization is evident. Standard solutions for and of expertise may be industry based, national and/or international; the last group must let enough space for the national variances.Hereby may arise a question: How to apply during the expertise’s the many featured legal space or the existing, just constructed standardized environment of expertise procedure? Generalizing the experience of last fifteen years is possible to underline a lack, an emergency need for generally applied expertise practice. Standpoint, according the generally applied practice built up connected with earlier named definitions, classifications or taxonomies, is an object of further discussion.

Lekander, Jon. "Real Estate Portfolio Construction in the context of the Multi-Asset Portfolio." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Several studies have analyzed the role of real estate in a multi asset portfolio, but little work has been done on how to formulate real estate strategies within the context of a multi asset portfolio. An unconstrained real estate strategy needs to take into account the impact of leverage as well as the impact of management fees. This paper explores how two different types of real estate assets, globally dependent office properties and locally dependent retail, residential and industrial can best be utilized over six investor domiciles, given different levels of leverage The results from the analysis indicates that leverage does have an impact on how real estate contributes to the overall portfolio efficiency, and that different types of real estate can be used for different objectives. It can also be concluded that real estate strategies composed of real estate with locally dependent tenant demand are generally preferable for diversification purposes over real estate with globally dependent demand, although not for all investor domiciles.

Sahk, Kaarel. Real estate valuation – experience of two last decades. How to come forward? In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Real estate valuation in Estonia has the lifetime that equal with the Estonian state independence. Named time comparison gives for analysts a possibility to draw down a model valuation development as a function of development of different state development parameters and attributes. For clarity of procedures changes is important to embed them into the nature of classical categories of overall real estate valuation procedure like sources of value, components of value and factors of value with following analyse of the valuation environment. Founded on the international superposition of phenomena of value and/or the valuation procedure as well, the parallelism of national and international progress in area gives a possibility of simultaneous valuation life-cycle construction. The constructed life cycle is based on the standardized nature of valuation environment, on the legal changes arising from EU directions, post crisis changes of economic climate etc. Described approach of analyse supply us with enough strong explanations that had happened in area during the last two decades and this way arm involved in parties with clear vision connected with further steps not only for the next financial perspective of EU but also with the view extended into the next decade up till 2030. On the national level the linkage between financial institutions, private real estate companies providing valuation services and state authorities is important to explicate as founding triangular of changes with valuation as golden section of it.

Biasin, Massimo, and Anna Grazia Quaranta. REIT Managers’ Compensation Structure - The Effects on Capital Structure and REIT Performance In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

REIT managers’ compensation structure typically provides a payment based alternatively on (i) “gross asset value” [GAV] or (ii) “net asset value” [NAV]. In addition, managers usually also gain a performance fee when REIT total return exceeds some minimum level.The paper analyses how the two alternative compensation schemes influence REITs’ investment decisions and capital structure and, consequently, REITs’ share performance at the investor level. The final issue addressed is whether one compensation scheme is superior to the other, i.e. if REITs having a fee-structure based on net asset values outperform REITs with a compensation indexed on gross asset value.Due to the (usually) market price discount on net asset values, both fee structures incentive managers to leverage – even in a tax-free environment – in order to maximize the calculation basis of management fees. However, the leverage motivation is stronger for GAV-based REITs than for NAV-based REITs, which are also expected to be more selective in investment decisions because only positive net present value investment projects increase their compensation basis. Overall, considering initial fee percentage, GAV-based REITs are expected to execute higher management fees than NAV-based REITs due to the relevant leverage effect. Moreover, debt recourse produces different effects on share value if measured upon market price or net asset value due to the different implicit valuation methodologies.The empirical analysis focuses on public Italian REITs for the period 2002-2012 and revises previous investigations for shorter periods of time. The results seem to support the theoretical expectations. GAV-based REITs have higher debt trends and levels than NAV-based REITs. At the same time, GAV-REITs generally experience lower real estate asset returns net of management fees for both current and growth yields. Differences in net real estate returns seem to lead to permanent higher performance over total return indexes of NAV-based REITs compared to GAV-based REITs.While the focus of the paper is largely on Italian REITs compensation, the issue addressed seems to be of broader interest due to the fact that similar compensation structures are also typical of other European REIT regimes.

Lo, Daniel Yet Fhang. Relationship between spatial structure of economic activity and growth: A causality study of Brazil In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The agglomeration effects on growth have been comprehensively documented and studied in growth literature, yet, the same cannot be said for the reverse causality, which poses endogeneity problems for the estimation of growth models. In addition, most, if not all, of the empirical research in the area use some conventional indicators such as labour density to proxy the level of agglomeration of an economy, without acknowledging the actual spatial structure of the economic activities that could be more fully captured by spatial autocorrelation (s.a.) measures. In light of this, this paper attempts to shed additional light on the growth literature by examining the Granger causality between growth and agglomeration using spatial autocorrelation techniques in a VAR framework. Our dataset covers the 26 states of Brazil for the period of 2001-2009. The results suggest that (i) Spatially autocorrelation is evident in the Brazilian economy across the 26 states; (ii) growth, proxied by GDP per capita, can be explained by s.a. of economic activity and labour density; (iii) growth is depressed by s.a. of labour distribution; (iv) growth fosters spatial clustering of economic activity; (v) growth triggers greater within-state spatial variation of GDP per head; and (vi) growth reduces labour density but induces s.a. of labour distribution.

Roche, Celeste. Renegades of Real Estate: Novelties, Threats and Vanguards In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

In the West, real estate development has a relatively firm tradition and a clear set of guidelines. Most developers work for the sake of achieving profit and do so according to the framework provided by their respective societies. What happens when individuals and institutions step outside of those conventions, or even laws? Is there room for new paradigms in real estate development? Is there a need? Or are people trying to fix a system that is not broken? Through evaluating instances of counter-culture, unconventional and radical acts in real estate development, focusing on social response and project sustainability, the author seeks to define the significance of these non-standard practices. Information is acquired mainly through media, public record and personal interviews, but quantitative analysis is employed when practical and purposeful. It is possible that some varieties of unconventional acts of development can become minorities of the mainstream, while others will probably remain anomalistic. Generally, results imply that real estate institutions of various sizes can employ more creative development projects and techniques to excel, even in times of economic lull. Additionally, the social aspects of development and resident-engagement are highlighted as a strong component of future sustainability: an individual civilian can have just as much stake in a project as developers, governments and special-interest groups. This paper adds to the discussion of alternative methods in land use and property development and showcases areas for more involved project-related research.

D'Arcy, Éamonn. Repositioning the Urban Built Environment for the 21st Century: A Case Study of London In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The built environment of any city inevitable exhibits path dependencies and maps imperfectly onto its current accommodation requirements. In turn this impacts on the city’s territorial competitiveness and its capacity to retain and attract the key sectors most likely to drive its economy. In an era of global competition the ability to reposition the urban built environment becomes an even more important concern for those tasked with retaining and enhancing urban competitive advantages. This paper explores these arguments through a case study of the repositioning of London’s built environment in the first two decades of the 21st Century. This repositioning has taken place in a largely uncoordinated way through a combination of area wide regeneration schemes, major infrastructure investments, a desire for tall buildings, the ability to attract global real estate capital flows and the hosting of a major global sporting event. The analysis attempts to rank the relative importance of these factors and examines the extent to which London provides a template for other cites attempting a similar repositioning of their built environment with the view to enhancing urban competitiveness.

Zaleczna, Magdalena. Restitution in Poland – costs and obligations after 25 years of democratic state’s creation In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This article presents the problem of restitution in Poland in the political, social and economic context. The author analyses public obligations resulted from breaking property rights during socialist past and attempts of restitution in Poland, indicating the most important flashpoints. The author examines the current negative attitude toward restitution presented by the government and society. A hypothesis constructed by the author focuses on the negative, but not noticed by the society, effects of a lack of the general restitution. Having an outline of the problem the author wants to concentrate on real example of a city Lodz. Local governments have been coping with many different restitution claims for last 25 years. The collected data indicate hidden costs influencing the local economy. The study is based on the legal documents and the results of public opinion polls.

Gostautas, Ignas. Return and Risk Relationship in English and Wales Housing Market In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This study reveals the evidence of inefficient and divided English and Wales residential real estate market. We examine the relationship between return and risk at a sub-regional level housing markets of the country. The links among the two variables and other housing market and economic factors are investigated with a purpose to explain why the markets do not always follow normal economic practice, according to which, return should be higher in more volatile areas. Additionally, we look for spatial relationships between the markets. We begin with identifying the housing market factors. We proceed by calculating risk ratios, such as standard deviation or market risk (beta) ratio from CAPM model. After that, we continue with spatial diagnostics and multiple and spatial regression models. The results show a very strong spatial autocorrelation among returns of the house price indices in neighbouring areas, while controlling for economic, demographic, liquidity and size factors. However, spatial autocorrelation among risk ratios is of much lower significance or not significant at all. The findings disclose that some local property markets have had returns inadequate to risk, thus proposing adjustments in investment decisions making.

Pekdemir, Dilek. Revisiting Office Rent Determinants : Development of the Istanbul Office Market in the Last Decade from Perspective of Real Estate Brokerage Firms In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Many studies on the office market have been conducted for the last thirty years. Especially variables which are expected to affect office rents were examined for different cities. The extent of variables was used in these studies reflecting variations in locational and/or economical conditions of the different cities.It is aimed to examine the development of the Istanbul office market in the last decade from the perspective of brokerage firms. The perception of brokerage firms on the effectiveness of these academically defined variables is important. First, it will provide some evidence on whether or not the reported influences of these variables remain the same in the Istanbul office market. Second, it may define how well practitioners’ criteria fit academically defined variables during the decision-making process for a new office investment.The study derives the currently well established locational, building, econometric and contract variables from previously published studies. Based on the result of a survey study administrated to the leading real estate brokerage firms in Istanbul, it will be revealed how Istanbul office market changed in the last decade compared to the reported results from the previous study (Oven and Pekdemir, 2004). Istanbul office market experienced two major crisis in 2001 and 2008, former Turkish banking crisis and later global financial crisis. The market behaviour will be examined from the perspective of the brokerage firms.

Dittmann, Iwona. Risk assessment of real estate investment with the use of subjective probability In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Investing in real estate, as in any other market, involves risk. To assess investment risk, different measures are used, including measures based on probability distribution (like volatility measures and safety level) as well as measures based on distribution function (the probability of not achieving the aspiration level).The purpose of this paper is to propose the use of subjective probability in the risk assessment of investment in real estate. This paper: 1) will identify the determinants of subjective probability estimation in the assessment of investment risk in the real estate market, 2) will present heuristics and related possible errors committed by risk analysts and forecasters (like anchoring and adjustment heuristics, availability heuristic, representativeness heuristic, confirmation bias, hindsight bias, conjunction fallacy and unrealistic optimism), 3) will present the possibility of applying the Easyfit software to estimate subjective probability distribution based on the percentiles specified by experts.The theoretical considerations presented in the paper are based on the achievements of finance and behavioral economics. The practical part provides an example of estimating subjective probability distribution based on percentiles with the use of the Easyfit software.

Cooke, Howard. Scale of Commitment of UK Business to Property in the UK In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The commitment to corporate real estate (CRE) is important at several levels. At a country level it is an important factor in the assessment of the scale that corporate real estate has in contributing to the country directly and indirectly. It is also important to understand the relative balance between the landlord and the occupier equation, as corporate real estate has been and still remains the Cinderella of the real estate world, with an under representation in the press, in the professions that service it and within academia. For the corporate themselves CRE tends to be treated as a cost aspect to the business and not something that adds value to the business, both in terms of the bottom line and shareholder value.The work on assessing the actual levels of commitment has been limited and this work is intended to be part of a larger project. This initial piece is a snap shot of 12 months of accounts for the FTSE350, that is the top 350 quoted companies listed in the UK, but with a longitudinal time line for certain sectors. Ultimately the aim is to run the analysis across all sectors of the FTSE350 to ascertain how the profile of property within business has changed over time and in particular through the recession.

Glumac, Brano, Gijs Kant, Alfred van 't Hof, and Wim Schaefer. "Search for sustainable land use policy solutions: a regional case of municipalities in financial danger." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Purpose - Dutch municipalities have an important role in the land market. They may act as an active stakeholder in land developments. At the same time, municipalities are entitled to set the land use policies. As a result, Dutch municipalities are the largest land owners present at the Dutch land market. The impact of the economic crisis badly damaged the financial situation of the municipalities due to their large land portfolio. Therefore, it is important to quantify those risks and test new land use policy solutions for the most risky cases.Design/methodology/approach – First, to indicate which municipalities have the highest financial risk, this paper applies a multi criteria analysis with publicly available financial data from each of 67 municipalities in Noord-Brabant region, the Netherlands. Second, 3 relevant cases within the most vulnerable municipalities were selected in order to derive 2 sustainable land use policy and relevant criteria to estimate their application potential. To estimate the importance of the success criteria and rate the potential policies a fuzzy Delphi method is used. Additionally, we distinguish two groups of experts, municipality (13 participants) and independent consultants (15 participants). Fuzzy Delphi technique is considered as an excellent method to gather such diverse panel data since it supports expert diversity in its procedure and calculation.Findings - This paper benchmarks the municipalities with the greatest financial risks and investigates the applicability of sustainable land use intervention policies.Originality/value – First, this paper reveals the severity of the financial situation of municipalities that took the active role in land market. In addition, this paper contributes to the larger pool of possible sustainable land use policies by identifying, structuring and rating the most relevant criteria to test the best applicable policy. For this purpose, we introduced the method that highlights the importance of rigorous procedure for the panel data collection and advances the weighting of the criteria and rating of potential new land use policies. This is of particular importance for the policy makers since the future land use influences the future marketability and cost of a development.

Domeher, Daniel, Kwame Mreku, and Abdul Samed Muntaka. Secure Property Rights and Access to SME credit: Exploratory Findings from England In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Purpose: The aim of this paper is to establish whether or not the absence of secure property rights is a barrier to credit access amongst SMEsOriginality: Land registration has been heralded globally for its supposed ability to enhance investment through access to credit. It has been argued that the development of the advanced world is attributable to the fact that there is comprehensive registration of property; this stems from the argument that property registration is what makes them acceptable collateral that permits access to credit for business investment and economic growth. Though the advance world is often used as an example in making the arguments above empirical research on the topic is rare. Indeed in England a reasonable proportion of landed property remains unregistered.Methodology: The study involved credit officers who were purposively sampled from the various high street banks. Data was collected using self administered questionnaires and analysed descriptively using SPSS. Findings: the results amongst other things show that most formal lenders accept landed property for collateral purposes irrespective of whether they are registered or not. It is concluded as a result that even though land registration is important in facilitating the verification of land ownership and ensuring security, its absence is doesn’t hinder SMEs access to credit.

Dietzel, Marian Alexander, Nicole Braun, and Wolfgang Schäfers. Sentiment-Based Commercial Real Estate Forecasting with Google Search Volume Data In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Purpose – This article examines internet search query data provided by ‘Google Trends’, with respect to its ability to serve as a sentiment indicator and improve commercial real estate forecasting models for transactions and price indices.Methodology – The study uses data from the two largest data providers of US commercial real estate repeat sales indices, namely CoStar and Real Capital Analytics. We design three groups of models: baseline models including fundamental macro data only, those including Google data only and models combining both sets of data.One-month-ahead forecasts based on VAR models are conducted to compare the forecast accuracy of the models.Findings – The empirical results show that all models augmented with Google data, combining both macro and search data, significantly outperform baseline models which abandon internet search data. Models based on Google data alone, outperform the baseline models in 82% of cases. The models achieve a reduction over the baseline models of the mean squared forecasting error (MSE) for transactions and prices of up to 35% and 54% respectively.Practical Implications – The results suggest that Google data can serve as early market indicators. The findings of this study suggest that the inclusion of Google search data in forecasting models can improve forecast accuracy significantly. This implies that commercial real estate forecasters should consider incorporating this free and timely data set into their market forecasts or when performing plausibility checks for future investment decisions.Originality – This is the first paper applying Google search query data to the commercial real estate sector.

Rothe, Peggie, and Christopher Heywood. "Short-distance relocation management approaches: 5 Case from Finland." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Corporate short-distance relocation is a significant event in the course of an organization’s lifetime. While these kinds of relocations happen frequently, they are an infrequent event from the perspective of a single organization. Therefore, few organizations have experience and knowledge on relocation management, which can result in improvised ways of managing the process. The aim of this paper is to describe different short-distance relocation management approaches applied by organizations in Finland.The paper uses a multiple-case study approach where the relocation management of five organizations are assessed post-relocation. Different aspects of the process, such as process phases and tasks, the organization involved, level of outsourcing, and employee participation, are scrutinized through 32 interviews with company representatives, and documents provided by the organizations.The paper describes the relocation management approaches applied in the five organizations, and also identifies the pros and cons of the different approaches. The study concludes that the most appropriate relocation management approach depends on the organization’s needs and situation, and that there is no one solution that fits all purposes.

Baridoma, Moses Baridi. Social unrest and real estate market recovery in Nigeria(A case study of port Harcourt, rivers state Nigeria) In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Real estate market is a very sensitive environment as perception and sense of security plays key investors and tenants both desires peace of mind and security of income over time.the occurence of local and regional social, religious, economic and political unrest tend s to determine the stability and progress in real estate investment, of all these, social unrest as experienced in the Niger delta region of Nigeria between 2005 - 2009 seems to be the most devastating on the real market in the region. This paper takes a critical look at social unrest globally and particularly in the Niger delta, it's causes, social effects and the impact on the real estate market, measurement of its rate of recovery and proffer useful solutions to prospective property investors in the region.The study adopts simple statistical tools like the bar chart, tables and graphs to deduce inferences from the data obtained from developers, agents and tenants.

Nanda, Anupam, and Jia-Huey Yeh. Spillover effects of infrastructure spending In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper examines the impact of local public expenditure on the built environment. The empirical framework is designed to address the endogenous feedback effects. Various types of expenditures are considered across 29 local areas in Taipei. Using panel data modelling that controls for unobserved heterogeneity, we find some significant effects of infrastructure investment on land values across many areas and, also, some evidence of a social expenditure effect. The local area differences are further explored to examine spillover effects. Spillover effect is not significant when rest of the region is taken into account. However, considerable spillover effects emerge when we focus on neighbouring areas. Also, results show interesting distinctions among various types of public expenditure. Overall, the results are reasonably robust across several model specifications and samples. The results do indicate that public expenditure have some impact and show interesting spatial patterns. These findings highlight important implications for local government policy, spatial planning and the role of public expenditure in local area economic development.

Multescu, Gheorghe Petru, and Barry Symonds. Strategic Alignment of Corporate Real Estate in Post-Socialist Emergent Property Markets: Can this save the day? In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Romania has undergone major reforms and changes since 1989. The privatisation of its former derelict industrial heritage has become attractive for investment funds and private investors. As part of this state managed process, a number of former industrial platforms entered property portfolios of real estate investors keen to speculate land prices. State owned company privatisations resulted in many cases in land banking and non-business related property development rather than re-launching core production facilities and manufacturing processes. On the other hand a limited number of formerly state owned companies did survive and successfully privatised to become the successful owners and managers of portfolios including derelict industrial land, offices, high street retail outlets and manufacturing facilities. Perceived privatisation failures and the post-2008 recession combined with a lack of skills in aligning Corporate Real Estate Strategy (CRES) with Corporate Business Strategies – where neither the state nor the newly established privately managed companies seem to understand the role and potential of CRES – set the scene for a stalemate in the emergent Romanian real estate market. How can CRES make a difference and be a part in re-launching investment in post-socialist emergent property markets? The paper looks at how aligning CRES with strategic business objectives could successfully contribute to make a difference in the ongoing privatisation process and successful development of already privatised companies. A case study approach provides access to a mix of qualitative and quantitative data.

Hoffmann, Martina. Strategies in printed advertisements focused on the Viennese Condominium Market In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Since December 1st, 2012 the new Energy Performance Certificate Template-law 2012 is valid. This law was implemented to encourage customers to buy more energy efficient objects. As this new legal situation has great influence on daily business of real estate agents, it is seen to be important to observe the changes on the real estate market very carefully. This study focused on the Viennese Condominium Market. In a previous study more than 5000 Viennese condominium advertisements, listed in the IMMO Kurier were analyzed and worked out. In fact more than 75% of the listed advertisements in the IMMO Kurier included the requested heating parameter (Hoffmann, ERES 2013). But how does this new information influence the transparency of the real estate market?In which way does the Viennese Condominium Market become more transparent for customers?What are the benefits and what are the disadvantages?It was decided to repeat the investigations by comparing the results from November 17th, 2012 and December 22nd, 2012 with the results from November 16th, 2013 and December 21st, 2013.Several strategies of advertising condominiums on the Viennese real estate market can be identified:For offered Condominiums:The advertisement includes the district/address, information on prices, square meters and heating parameter.Summing up, the transparency of the real estate market is not guaranteed by forcing real estate agents to show the heating parameters in their advertisements, especially, if further information on price and square meters has not to be added.

Le Roux, Pieter. "Student-lead evaluation of a new workplace concept in an academic environment." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper presents the outcome of an evaluation of a new workplace concept in the staff room of the Academy of Hotel and Facility Management at the NHTV – a medium-sized school for higher vocational education – in the city of Breda, the Netherlands. The workplace concept, known as “NHTV@Work”, was centrally developed by the Facilities Division of the said school, with assistance from professional workplace consultants. The objectives of the study was (i) to determine the level of user-satisfaction or dissatisfaction with the new workplace environment, (ii) assess the implementation process by way of self-reporting by staff members using the new workplace environment, and (iii) develop recommendations for improving the overall concept for implementation across all workplace environments of the NHTV. The evaluation of the new workplace concept was considered a suitable project assignment for 2 2nd-year FM student groups of the theme “Corporate Real Estate Management”. As part of the theoretical component of this theme, students were given instruction on diverse methodologies and approaches to workplace performance evaluation through questionnaires, observations and interviews. Through the application of a process-model for supporting decision-making on organisational accommodation as conceptual framework, the various methodologies were structured to provide students an optimal learning experience.Outcomes of the research identified (i) staff members using the workplace concept to be overall satisfied with the new concept, but less satisfied with the implementation and continued monitoring thereof, (ii) the use of the workplaces to be overall well-adopted, but a need for increased diversity in the functionality of specific types of workplaces provided, and (iii) a perceived misalignment of interest between the development and the new workplace concept by the Facilities Division and external consultants on the one hand, and the perceived work culture and functional requirements of staff members. The study provides a comprehensive framework for firstly, assessing all workplace environments where the NHTV@Work concept has been implemented, and secondly, for inter-organisational comparative research and continues monitoring of the effectiveness of the workplace concept. In addition to this, the approach as applied in the current research, provides a qualitative project-based learning experience for FM-students of the Academy.

Anica-Popa, Adrian, and Raluca Florentina Cretu. Survey Regarding The Real Estate Market in Romania and the Sustainable Valuation of the Green Assets In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Green featured buildings have recently penetrated the real estate market. The pervasion of these buildings on the real estate market in Romania is a challenge for real estate assessors. Recently carried out surveys in the real estate field show that the sustainability is not a cost but an investment, due to the fact that the occupancy rate of the building can significantly increase, the management costs might tend to go lower due to innovative technologies, the capitalization and updating rates could be lower due to the fact that these green buildings can be associated with lower risk premiums; also, taxes on such properties can have a decreasing trend due to the fact that these buildings are much more friendly with the environment compared to the traditional ones, etc. The way sustainability transpires into the valuation of real estate, what are the decisions that the assessor will explain and justify in the valuation report are only a few questions that we aim to answer in the hereby survey by presenting a few relevant scenarios.

Huston, Simon, Arvydas Jadevicius, and Negin Minaei. Talent and rental system bottlenecks: a preliminary investigation In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The relationship between talent and economic growth is well established but whether jobs pull in talent or talent incubates start-ups is less certain. Here, we assume talent drives growth. In the UK, demographics and educational deficiencies dictate that much talent will continue to be foreign. We focus on foreign post-graduate students as a rich potential source of talent. Overseas students are sensitive to a number of factors (high tuition fees, immigration policy, and discrimination) but, here, we examine the responsiveness of the UK private rental system In the UK, housing shortages drive up rent and, in tight rental markets, letting agent professional standards can slip. So the broad question emerges: does the private rental system nurture talent? Specifically, how responsive is it to the needs of post-graduate students? For an answer, we turn to the literature, analyse secondary data, investigate rental agencies and conduct some local student interviews.

Radner, Philip. Textual Analysis of REIT IPO Prospectuses: Quantifying Company Rhetoric as an Indicator of Underpricing In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper analyzes the influence of information disclosure in the REIT IPO prospectus on IPO underpricing. It introduces a different approach for measuring information disclosure and then quantifies its effect on initial returns. The IPO prospectuses of 72 REIT companies are analyzed on key words and then tested on abnormal return patterns with regard to the frequent use of these key words. Moreover, future tense is taken as a proxy for the number of promises in an IPO prospectus and the paper tests a risk-based interpretation. Firms that make fewer promises put less information in the marketplace. Consequently, investors should be rewarded for having less information to correctly value the issue by underpricing. Generally, the paper analyzes the impact of the IPO prospectus on underpricing and examines the relationship between the use of key words as well as promises made by a firm in its IPO prospectus and its underpricing level.

Yuo, Tony Shun- Te. The Ambiguity of the Highest and Best Use for Mixed-Use Development In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Mixed-use developments are growing rapidly worldwide in recent years. This emerging establishment combines multiple income producing uses within a building or a group of integrated buildings. Under the concept of compact city and sustainable development, the advantages for mixed-use developments are providing users greatest variety and convenience, fulfilling a live-work-play environment. Nevertheless, from the perspectives of property appraisers and developers, there are limit consensus on the Highest and Best Use (HBU) definition. Ambiguity and complexity of the HBU definition increase the difficulty to achieve the ultimate target: legally permissible, physically possible, and financially feasible, especially for mixed-use developments. This vagueness in HBU valuation may causes uncertainty for decision making and requires a set of more flexible strategies. This research aims to trace the sources of this ambiguity and examine the possible implications.

Hobbs, Peter, and Bert Teuben. The Asset Owner Real Estate Investment Process: Risk Management Insights from the MSCI/IPD survey In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

During the final quarter of 2013, IPD conducted a survey into the asset allocation processes of institutional asset owners, with a particularly close examination of their real estate exposures. This paper provides a detailed analysis of the real estate element of the survey, with a particular focus on risk management through the investment process.The results are based on a desk-based analysis of 138 asset owners, in-person interviews with 40 investors and a literature review. The focus is on Pension Funds and Sovereign Wealth Funds, providing in-depth coverage of these institutions across 28 countries. The research provides a comprehensive review of the role of the $700bn of real estate equity in asset owner portfolios, including their allocations to different investment styles, their geographic exposures and their approaches to execution. The more innovative aspects of the research relate to the approach of asset owners to real estate risk management, explaining the potential for misalignment at various stages of the investment process. This includes alignment between strategic asset allocation and actual real estate exposures, the use of appropriate benchmarks, and the link between portfolio and asset-specific monitoring and the strategic asset allocation process. The final section of the paper draws out some of the implications of the research including a categorization of different types of asset owner and the steps beginning to be taken by a series of ’global leaders‘ seeking to strengthen risk management through the investment process.

Jones, Colin, Kevin Cutsforth, and Neil Dunse. The Changing Real Estate Risk Premium: Comparative Evidence from the UK, Australia and USA In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The global financial crisis was a sharp shock to real estate markets and while interest rates and government bond yields fell in response around the world, real estate yields (cap rates) have risen. The objective of this paper is to analyse the gap between government bonds (index-linked and long dated) and real estate yields over time for the UK, Australia and the USA and determine whether there has been a structural break in this long term relationship. The statistical analysis, based on ARCH models, will identify previous structural breaks in these relationships. The absolute gap levels and their variation over time in the different countries is then linked to the theoretical reasons for the yield gap in terms of a risk premium and compared with the findings from earlier studies.

Jay, Graeme. The critical success factors that need to be considered when developing a sub-regional shopping centre in a former black township, like Soweto in Johannesburg In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The system of institutionalised apartheid during the mid and latter part of the 20th century led to high levels of inequitable real estate and infrastructural development in areas that were inhabited by black residents in South Africa. One of the consequences of this was that the amount of money that was invested in real estate development by the private sector was both, in relative and absolute terms, less than that spent in areas inhabited by white people. There have been significant increases in real estate development over the last 20 years in the former black townships, like Soweto, with the advent of a free and fair democratic system in South Africa. It is estimated that there are some three million people living in Soweto and hence there are significant opportunities for developers of all types of real estate in such areas.Developers, retailers and consumers were surveyed to assess their views regarding the critical success factors that need to be considered when developing a sub-regional shopping centre in a former black township, like Soweto in Johannesburg. This was done in order to determine whether or not the critical success factors that ensure the success of a sub-regional shopping centre in an area like Soweto are different to the factors highlighted in the literature. The purpose of this paper is to:•Consider the relevant literature, in an international context, regarding the critical success factors that need to be considered when developing a sub-regional shopping centre; •Consider whether or not these critical success factors are different when developing a sub-regional shopping centre in a former black township, like Soweto, Johannesburg;•Share the results of research conducted with various developers, retailers and consumers;•Suggest what the critical success factors are when developing a sub-regional shopping center in a former black township, like Soweto, Johannesburg and whether or not these differ from the critical success factors identified in the international literature.

Lang, Stephan, and Alexander Scholz. The Diverging Role of the Systematic Risk Factors: Evidence from European Real Estate Stock Markets In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The risk-return relationship of real estate equities is of particular interest for investors, practitioners and researchers. This paper examines in an asset pricing framework whether the systematic risk factors related to market, size, BE/ME and liquidity play a significantly different role in explaining the returns of listed real estate companies, compared to general equities. By applying the propensity score matching (PSM) algorithm, we bypass the “curse of dimensionality” of traditional matching techniques and identify a comparable control sample of general equities, in terms of the relevant firm characteristics size, BE/ME and liquidity. The empirical results indicate that European real estate equity returns load significantly differently on the size, value and liquidity factor, whilst the influence of the market factor seems to be equivalent. In addition, we find an economically and statistically significant underperformance of European real estate equities, after accounting for the diverging role of the systematic risk factors. Running the conditional time-series regression, we further reveal that these findings are predominately caused by the divergent risk-return behavior of real estate equities in economic downturns. This is the first study to employ the propensity score matching in the context of real estate asset pricing.

van Bronkhorst, Bob, Brano Glumac, Tristan Kunen, Michel van Rhee, and Wim Schaefer. "The Dutch Land Market: A Regional Tool for Policy Impact on Vacancy and Grant Rates." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Purpose – The land market in the Netherlands uses a model in which the municipalities are the land use policy makers, but also act as active stakeholder in the development, and so grant land for profits. The acquisition and granting of this type of land has been very lucrative, this enticed the municipalities to become the largest land owner in the Dutch land market. Municipalities started to act speculatively and rely on these extra incomes. Now, that demand is not evolving as expected, it becomes apparent that even after the crisis there will be a large oversupply. To ensure incomes on business land, municipalities are searching for methods to increase demand. There is large inter-municipal competition for attracting new, but mostly relocating, firms. It is therefore important to examine the effects of policy deployment on the total business property stock, to prevent excessive vacancy in the current stock.Design/methodology/approach – For this paper demand and supply are extruded into two dimensions, quantitative and qualitative. The qualitative aspects are identified with location theory representing the demand on the micro-scale. These aspects influence the companies’ preferences for a location that again vary over different industry sectors. Further, these preferences were quantified with a ‘Bayesian classifier network’ in combination with ‘random utility theory’. On the macro scale, the demand is quantified by using the employment indicators for a certain industry sector. On the other hand, supply is simply represented with the existing business parks stock. Demand and supply are then combined in an agent based model in which simulated companies make microeconomic decisions based on previously determined variables. To verify and indicate the applicability of the developed approach, a real case study was conducted for the conurbation of Eindhoven in the province of Noord Brabant in the Netherlands.Findings – The model approximates the demand and vacancy of the municipal land supply and investigates the applicability of certain land use intervention policies. The developed model is supplied with an interface which allows decision makers to use it as a decision support tool.Originality/value – As previous research has identified the quantitative demand on the macro scale, this research incorporates also ‘qualitative aspects’ such as the location and allocation. These aspects reflect the micro scale supply and demand of business land.

Sun, Zhuo Xiao, and Kwong Wing Chau. The dynamics of retail real estate market in Hong Kong In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This study investigates the effects of government policy in the price determination process of retail property in Hong Kong. In the year of 2003, Hong Kong government launched a new policy named Individual Visit Scheme (IVS) under which the mainland travellers are allowed to visit Hong Kong on an individual basis. The aim of the policy is to boom the economy in Hong Kong and Macau that was severely affected by the SARS event. In this study, IVS policy is introduced for the first time as a demand driver in the price determination equation. It is found that the expensive locations of retail property react significantly stronger to the policy impact than cheap locations utilizing the empirical data in Hong Kong retail property market. However, with the passage of time, this impact on property price declines faster at the costly locations. More than 30 years data of retail property market in Hong Kong is obtained and analysed in the study. Information asymmetry theory is employed to explain the different responding behavior to external shocks in expensive and cheap locations in the price determination process of Hong Kong retail property market.

Yeh, Kuang-Yih, and Hao-Ching Hsia. The Effect of Fairness on individual’s Acceptability of Road Pricing Policy In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The dramatic growing of private vehicles ownership results in heavy traffic congestion and serious environmental pollution in the city, such as air pollution and annoying noise. Professional urban planning experts have attempted to achieve the target mentioned above by adjusting current land use. However, adjusting land use always takes a long time. At the moment, the advanced countries in Europe and the United States have been already paying attention to traffic demand management (TDM) in order to solve these environmental problems and achieve the target of building a sustainable living environment. While road pricing (RP) is generally regarded as one of the most effective measures of TDM, its poor acceptability has been the greatest impediment to its implementation. Japanese scholars proposed the parking deposit system (PDS) as an alternative RP scheme to improve the public acceptance. In view of the above, this study takes a local commercial district of Tainan City as the study area where the data of visitors driving private vehicle are collected by a stated preference questionnaire. Because the acceptances of two policies are considered to be correlated in this study, the choice behavior model of acceptance is established by using bivariate binary probit model. This study also considered that different groups may hold different attitudes, so respondents were separated into two groups according to their consciousness of fairness. Therefore, the choice behavior model of acceptance of fair group and unfair group are built and compared. The result of model estimation has several good implications for the proposal of environmental policy and traffic demand management measures. It indicates that the most important thing that people really care about is cost. That means individual’s behavior can be adjusted by charge schemes. On the other hand, the result of social interaction equilibrium shows that the difference can be obviously distinguished from different groups, so it is recognized that the approval probability of the fair group is higher than the unfair group. The marginal effects of estimated coefficients are also discussed in this study.

Saeheng, Nitchara. "The Effect of Kiosks Service Quality and Kiosk Product Quality on Customer Satisfaction." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Purpose – This study attempts to examine the impacts of the kiosk service quality dimension (that is, personal Interaction, policy, physical aspects, reliability and problem solving) and the kiosk product quality dimension (including features, aesthetics and customer-perceived quality) on customer satisfaction. It focuses on the kiosks in shopping centers in Thailand.Design/methodology/approach – The study adopted well-known theory of retail service quality and product quality. A survey was conducted with the samples that have experience in shopping with kiosk. Data were collected through the online questionnaire. The total of 216 respondents participated.Findings – The results from the regression analysis showed four dimensions, namely personal interaction, policy, product aesthetics and customer-perceived quality had a direct relationship with customer satisfaction with kiosk. Practical implications – Findings provide practical information to mall managers by understanding that what kiosk’s characteristics positively affect shopper satisfaction. Thus, mall managers need to pay more attention to these dimensions for choosing kiosk in the mall. In addition, kiosk owners can apply this study to improve their performance.Originality/value – There is no research to examine the impacts of the kiosk service quality dimension and the kiosk product quality dimension on Thai customer satisfaction. The findings of this study can help kiosk to improve the performance for surviving in shopping centers. And this helps shopping center to reduce the cost of finding new kiosks. Furthermore, mall managers can use this results for choosing kiosk that meet shopper satisfaction.Paper type – Research paper

Peng, Chien-Wen. The effects of fertility rates and dependency rates on housing prices In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Dependency rate is an indicator of demographic structure which usually be used to measure the pressure on productive population. A high dependency ratio can cause serious problems for a country if a large proportion of a government's expenditure is on health, social security and education, which are most used by the youngest and the oldest in a population. Many previous studies found that dependency rate was the main determinant of household saving or wealth accumulation. This study tries further to clarify whether demographic changes, especially dependency rate, affecting housing prices. The empirical results reveal that house price is cointegrated with fertility rate and old dependency rate, respectively. In the long run, an increase of fertility rate increases house price. However, an increase of old dependency rate reduces house price. The expected demographic change in 2015 would be an important signal of housing price change.

Akinsomi, Omokolade, Katlego Kola, Thembelihle Ndlovu, and Millicent Motloung. The Effects of the Black Economic Empowerment (BEE) policies on the Risks and Returns of Listed Property companies in South Africa In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This research provides an investigation into the impact of Broad-Based Black Economic Empowerment (BBBEE) on the risk and returns of listed and delisted property companies on the Johannesburg stock Exchange. The study was investigated to understand the impact of BEE Property Sector Charter and effect of government intervention on property listed markets.The study examines the performance trends of the listed and delisted property companies on the Johannesburg Stock Exchange from January 2006 to January 2012. The data was obtained on McGregor to compute the risk and return measures of the listed and delisted property companies. The study employs a capital asset pricing model (CAPM) to derive the alpha (outperformance) and beta (risk) to examine the trend amongst the BEE and Non-BEE companies, Sharpe ratio was also employed as a measurement of performance. A comparative study is employed to analyse the risks and returns between listed property companies that are BBBEE compliant and BBBEE non-compliant. The study creates a dummy variable to rank BBBEE ratings to test whether there is a correspondence between BBBEE levels of the listed and delisted property company and its risks and returns. Results show that there exists differences in returns and risk between BBBEE compliant firms and non- BBBEE compliant firms. The study shows that non-BBBEE firms have higher returns that BBBEE firms and are less riskier than BBBEE firms. By establishing this relationship, this possibly affects the investor’s decision to invest in BBBEE companies versus non- BEE companies. This can assist the government in strategically adjusting the policy.

Martens, Bob. The ERES Digital Library: An Updated Interface In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This contribution presents the ongoing efforts to further develop the ELPUB digital library, which highly supported the dissemination of published materials within the community in the past years. has been serving the real estate-community in the past years, predominantly aiming to archive the output of the annual conferences and seminars. Doubtless, there is a need for a platform to maintain the “collective memory” of the association and so far over 4,100 entries from 20 conferences and some 25 industry/education seminars were recorded. The repository, which utilized at first the SciX-technology, delivered access to the individual papers and made the data available via an OAI-interface as well. However, in the course of time digital library technology evolved and novel developments were to be considered for implementation. For this reason a shift was performed towards the Architexturez-platform aiming to implement advanced semantic web features. Especially the display of evolving topics as well as their gradual development is appealing. Moreover the aggregation of data, for example individual bibliographies, has to be highlighted. This contribution will elaborate on the transition and deliver an overview on the current prospects along with the technical capabilities.

Oyedokun, Tunbosun B., Neil Dunse, and Colin Jones. The Evolution and Impact of a Green Office Submarket: A Framework for Analysis and a Research Agenda In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Commercial property markets in major cities of the world have experienced significant transformation by the global clamour for incorporation of sustainability in commercial buildings through the introduction of various local and international rating tools. The effect of this trend is the potential emergence of green office property sub-market with a seemingly competitive edge over the non-green office market. This in turn could bring implications for the demand and depreciation of non-green offices. This paper presents a framework for analysing these processes, assesses the evidence so far on these developments and sets out a research agenda.

Anghel, Ion, Popescu Dumitru Dan, and Ciora Costin. The evolution of Romanian Real Estate sector: dynamics towards value creation In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

As real estate is most likely as volatile as the stock exchange, this volatility could determine important diferences of performances in the sector. This paper examines the evolution of the real estate sector between 1990-2014 in Romania and the performances associated with different stages of economic development. Moreover, we analyzed different key performance indicators in Romanian real estate market versus performances of the main companies in this sector, and the dominant need of transparency in the market for the proper information of the players in the market on the actual transaction prices. For the later, the study of real estate indexes from the methodological point of view and a comparrison with similar indexes in the region is essential.

Rahimzad, Reyhaneh, Cospatric Ali Parsa, and Frederick d'Inverno. The Future of Tax Increment Financing: Lessons from San Diego and Scotland In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Urban regeneration strengthens the competitiveness of the local economy, which depends on substantial investment of public/private money to make development happen. Over the last few decades funding of urban regeneration projects at the global level has been the subject of much debate with increasing concern about the high costs and methods of financing. Innovative funding models including Public Private Partnerships (PPP), and Private Finance Initiative (PFI) in the UK and Business Improvement Districts (BIDs) and Tax Increment Financing (TIF) in the US have been utilized to fund urban regeneration projects during this period. This paper assesses the application and outcomes of tax-based incentives in urban regeneration by drawing upon case study analysis in the UK and USA. TIF will examine as the main method of financing regeneration projects in the states of California as the first province to utilize and also the earliest in the United States to eliminate the model. The paper analyses the TIF’s successes and failures, drawing out the potential problems and benefits of the tool, the ability to lever private sector finance and its economic impact. The outcome of this paper comprises recommendations for more viable strategies and policies that TIF offers to finance urban regeneration and make a significance contribution to research which is currently on going.

Porumb, Vlad Andrei, and Ion Anghel. The impact of Basel II Adoption on the Financing of European Real Estate Companies In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

In this paper we analyze the impact of the Basel II adoption on the ability of European real estate companies to access bank loans. The Basel Committee on Banking Supervision (BSBS) adjusted their regulatory recommendations to answer the potentially problematic concentration of loans in the real estate industry. Relative to the former Basel I Capital Accord, the new banking regulation introduces a more detailed categorization of real estate lending categories, with more sensitive credit risk weights. In all classes of Basel II application, Standardized, IRB and A-IRB, credit risk exposure significantly evolved relative to Basel I’s dichotomous residential mortgage/commercial real estate loans categorization. The more sophisticated and risk-sensitive classification is likely to have influenced the borrowing capacity of real estate companies in the post-Basel II adoption period. We focus on the enlarged EU countries because the adoption of Basel II was mandated in 2008 for all listed firms. This homogeneous setting allows us to better assess the impact of the new banking regulation on the lending of real estate companies. To our knowledge we are the first to document the impact of a change in banking regulation on the lending in the real estate industry.

McAllister, Patrick, and Anupam Nanda. The Impact of Cross-border Real Estate Investment on Commercial Real Estate Capitalisation Rates In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The research project outlined proposes to investigate the relationship between the market significance of foreign investors in major office markets and commercial real estate capitalization rates. Drawing upon a database of commercial real estate transactions, it is proposed to model the determinants of market capitalization rates with a particular focus on the significance of the proportion of market transactions involving foreign investors. Whilst there are strong a priori grounds to expect positive price effects from foreign investment, the research will provide quantitative estimates of the extent of potential effects.

Wolski, Rafal, and Magdalena Zaleczna. The impact of the business cycle on the construction companies’ sector inselected states In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The economy is a subject to a periodical changes. They are reflected infinancial situation of households and companies. However, the recenteconomic downturn is particularly acute. After strong growth of activity,in many states related to the real estate boom, there was a suddencessation of the activity of a construction sector. It contributed to aslowdown in an economic growth, or even a lasting economic downturn. Theauthors analyse the conditions of economy, the construction sectors and the state of the residential real estate markets in the Czech Republic, Poland,Slovakia, Hungary, Spain and Ireland to draw a wider picture of an impactof the boom and the slowdown on construction activity. Then on the basis of the database of the financial condition of chosen construction companies from these countries, they look for answers to the question how much these actors havechanged their activity in recent years. The database of constructioncompanies involved in the construction of buildings is established and anassessment of their financial health in the years 2003-2012 allows for therealization of the intended purpose. The analysis should allow torecognize the scale of the impact of the business cycle on constructionactivity in macro and mezzo scales in the chosen states.

Laré, Amandine Loyal, Johanna Choumert, and Eric Kere. The impact of water and sanitation access on housing values: The case of Dapaong, Togo In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The international community has made a commitment that aims to halve, by 2015, the number of people without access to safe drinking water and hygienic sanitation systems. In Togo, the government struggles to provide the population with access to water and sanitation, despite a proactive policy. We argue that a connection to safe water and sanitation increases housing values. Using collected data from the city of Dapaong, we develop a hedonic price model to capture the relationship between housing values and their characteristics. Our results support the need to accompany any investment in access to water and sanitation with real estate policies, so that the poorest households remain beneficiaries of the pro-poor policies.

Kongkajaroen, Pukkapop. "The Influence of Green Condominium Purchase Attitude toward Intention to Purchase: Generation Y Consumers." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

In the world today, qualities of lives among humans are decreasing at a rapid stage. This is caused by our never-ending wants and needs. In order to satisfy our greed, our mother-earth are being destroyed at a rapid stage. More natural resources have to be harvested and of course more pollution are being created inevitably. With this rising concerns, organizations around the world are creating awareness of this phenomenon as part of their corporate social responsibilities.The real estate industry too, is on this trends. No doubt that this industry contributed most to the environmental impacts. They can cause both direct and indirect impacts on the environment. Even the first step in planning, developing to even managing the estates cause an environmental impacts. In recent years, both developers and consumers are being aware of these negative circumstances, in response to this, they are now more concerned when buying and/or developing the real estates.This study have emphasized on the relationships between purchasing attitudes and intentions to purchase green condominiums on Generation Y. Why Gen Y? Research conducted found that this generation of people are more aware of this environmental issues and willing to act accordingly. This research is conducted based on the quantitative method and the questionnaires used to reach the respondents will be online-administered. The target group will be between 18-35 years old and live in Bangkok. After filtering the questionnaire collected, 220 sets were used in analyzing. There are 2 steps in the process when analyzing the data. The descriptive statistic were used on the first step to obtain the demographic characteristics of the respondents. While on the second ,regressions were employed respectively. The results obtained from this study found that “Intentions to Purchase”green Condominium on generation Y has a positive relationship on “purchase attitude”. While “environmental knowledge”, “Perceived Benefits”, “Environment Concern”, “health conscious” and “subjective norms” also have a relationship on “purchase attitude” and indirect effect with “intention to purchase”.After knowing all these relationships developers can apply this knowledge to their business in advertising and analyzing consumers’ targets.

Sangkakoon, Polek. "The influence of group references in home purchase intention in Thailand." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

PurposeThe purpose of this paper is to study the importance of various reference groups which influence the intention to buy a house for the family living in Thailand. Since a house is a durable asset with a high price compared to earned income of the Thai citizens. Moreover, Thai style living is still more of an extended family. Therefore the decision made on acquiring such asset by a decision maker is normally came from many influences, which may include several generations in a family. methodology​The study adopted the well known theory of planned behavior (TPB) of Ajzen. A survey was conducted with the selected target group under the condition that a decision maker on home buying, are likely to be influenced by many reference groups. A total of 180 samples was collected through the online questionnaire, placing in the Google Doc.FindingsAnalysis tools are factor analysis and regression analysis. The hypothesized dimensions of influencing groups, subjective norm of TPB, are the decision maker’s spouse, their children, their elderly and friends. Factor analysis supports the 4 dimensions of subjective norm variables: spouse, children, elderly parents and friends. When all influential groups are combined into subjective norm construct together with other two important constructs of TPB which are attitude towards behavior and perceived behavioral control, the linear regression analysis shows that all 3 latent variables statistically influence change in home purchase intention. However, children seem to be the most influential dimension under subjective norm, followed by spouse. While elderly parents and friends reveal less Influence under subjective norm.ImplicationsThis study helps identifying influential groups affecting the intention to purchase a house of working age decision makers where those influences are associated with designing the product to suit consumer buying power. Marketers should take these findings into consideration while designing and implementing their marketing strategies.OriginalityThis paper proposes a concept relating to Thai culture where a family often stays in a large family home. It is believed that the parents will have an influence on the intention to buy a house. However, when the idea of ​​creating your own family comes, the influence of the reference group is evolving. This study divided the influential group into 4 dimensions according to the clarity of educational reference group effects of the subject

Schier, Michael, and Michael Voigtländer. "The Influence of Taxes and Rent Yields on Tenure Choice: New Evidence from Germany." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Home ownership rates in Germany have increased substantially in recent years. However, the rate still remains on a very low level and shows significant differences across regions. The reasons for these differences and the last developments are not clear. Generally, the decision between renting and buying a house or a flat depends on multiple individual factors like income or risk awareness. Additionally, heterogeneous developments in the real estate markets, indicated by prices, rents or taxes, cause differences in the profitability and the costs of homeownership and renting. The following study analyzes the tenure choice in 402 administrative districts in Germany between 2008 and 2012 with the help of an indicator measuring the relative profitability of letting and buying. The indicator is calculated by taking into account the average rental price and the different tax treatment of tenure choice, the property prices for different administrative districts in Germany, the interest and maintenance costs (user costs of housing). Since tax benefits of landlords are passed through to tenants when competition is severe, the indicator can be used to measure the relative profitability of renting and buying. By using a panel model, we investigate whether the demand for buying or renting – measured by search profiles in ImmobilienScout 24, the leading internet platform for private real estate transactions in Germany – is shifted by changing profitability of letting and buying. Control variables like vacancy rates, demographics or employment validate the robustness of the model as well as accounting for spatial autocorrelation. Results show, that households react on changing profitability and adjust their tenure choice partially to economic factors.

Wellner, Kristin, and Friederike Landau. The influence of ‘touristification’ on Berlin’s real estate market In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Real estate markets are influenced by diverse factors from both the supply and demand side. One influential dimension of real estate developments is tourism. On the one hand, the rising attractiveness of a city or region leads to changing configurations in the services and retail industry in order to consider tourists’ consumption and leisure practices. On the other hand, the real estate market is affected by an influx of tourists, aiming at accommodating the various needs of tourists. Berlin, which has remarkably risen as tourist destination in the past years, now ranking third after Paris and London in Europe, is affected by tourism in various ways: the hotel and catering industry is expanding, especially in the low budget travelling sector (hostels etc.), sometimes rivalling previous usages of the city space. With an estimated number of over 12,000 vacation rentals, many Berlin tourists stay in apartments, which were formerly regular apartments on the rental market. This practice of ‘authentic living’ creates more scarcity of affordable rent space in the city. The present paper discusses the concept of ‘touristification’, partially seen as side effect of gentrification, and its influences on the development of rent prices, modernization efforts and tenant structures. We are investigating the short- and long-term implications for both property owners, looking at higher short-term gains by renting to tourists, and tenants’ perspectives, facing higher pressure on their rents.To this point, the concept of ‘touristification’ has not received much scholarly analysis. Being present in popular discourse in Berlin’s city-specific political debates, the term is commonly used, however weakly defined. With the present research, we seek to conceptualize what phenomena the term ‘touristification’ seeks to describe and in what ways ‘touristification’ has an impact on real estate prices, on the housing market for property owners, as well as national and international tenants. In the present paper, we will delineate research questions and preliminary hypotheses on this very current topic. Applying a mixed-methods approach of real estate know-how and social sciences methodologies, we will present our interdisciplinary research design. We will give insight into the study design, which brings together perspectives on the (perceived and physical) influences of tourism on Berlin neighbourhoods from property owners, tenants and tourists.

Woestenburg, Alexander. The issue of value and price in land market research In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper discusses the reciprocal relationship between land value and the negotiated transaction price of land. In a market that is characterized by many inefficiencies we may hold the hypothesis that price does not equal value (Wyman, Seldin & Worzala, 2011). This hypothesis raises the question of how value and price relate to each other. We present a conceptual framework that understands land transaction outcomes through the lenses of their transaction processes. These processes are shaped by judicial boundaries, laws, regulations and actor behavior. We argue that, together, those institutional aspects determine the interplay between land value and price.In order to allow for transactional aspects in land market analyses, this conceptual framework challenges conventional methodologies and data sources and calls for the use of a combination of both quantitative and qualitative research approaches towards land market research.The framework is applied to two Dutch land market segments: the market for rural land and the market for inner city building land. A hedonic price analysis of rural land prices, based on notarial deeds of purchase, shows the institutional richness of notarial deeds as data source for land market research purposes. It shows the greater explanatory power of including transaction characteristics and with that, it sheds a different light on the use of appraised value or transaction price data in hedonic land market analyses (Ma and Swinton, 2012). Next, an in-depth analysis of inner city land transactions reveals that both value and price are determined during the land transaction process. This finding is different from the causal relation we expected; namely that transaction processes cause a land price to deviate from its value.We conclude that the interplay and difference between land value and land price, caused by the institutional transaction context, should be subject to land market analysis, rather than just the focus on price or value.-----Ma, S. and Swinton, S.M. (2012), “Hedonic valuation of farmland using sale prices versus appraised values”, Land Economics, Vol. 88 No. 1, pp. 1-15.Wyman, D., Seldin, M. and Worzala, E. (2011), “A new paradigm for real estate valuation?”, Journal of Property Investment & Finance, Vol. 29, No. (4/5), pp. 341-358.

Schindler, Felix, Steffen Sebastian, Christian Weis, and René-Ojas Woltering. The Link between NAV Spreads and Returns of Real Estate Stocks – Evidence From Global Capital Markets In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

In this paper, we analyze whether an investment strategy which is based on the net asset value (NAV) spreads of real estate stocks yields positive excess returns. For a global sample of 542 real estate stocks over the 2000 to 2012 period, we find that a portfolio which is long in the quintile of real estate stocks trading at the highest discount to NAV and short in the quintile of stocks trading at the highest premiums (or lowest discounts) yields annualized returns of 9.72%. Estimated annualized alphas from this strategy are between 3.1% and 6.9%. However, the high-discount portfolio is also much riskier than the low-discount portfolio. Furthermore, robustness checks suggest that the exploitability of this investment strategy has diminished over the recent years.

Moss, Alex, and Kieran Farrelly. The performance implications of adding global listed real estate to an unlisted real estate portfolio: A case study for UK Defined Contribution funds In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper seeks to provide a better understanding of the performance implications for investors who choose to combine listed real estate with an unlisted real estate allocation. Specifically, it provides a detailed investor level analysis of the impact of combining UK unlisted fund and global listed real estate fund exposures to satisfy the requirements of a real estate allocation in a UK Defined Contribution Pension fund. It is well understood that direct real estate can be a beneficial component of a multi-asset portfolio primarily due to the diversification benefits that it provides. However, one of the key challenges for both asset allocators and product developers is how to provide a direct or at least a direct-proxy real estate exposure in a mixed asset portfolio with acceptably high levels of liquidity and low levels of cost. This is a challenge for all private market asset classes. Clearly, a 100% exposure to unlisted funds or direct real estate would not be expected to meet this criteria. Key Questions : In this paper we set out to answer the following questions:* Return enhancement: What is the “raw” performance impact of adding listed real estate to an unlisted portfolio?* Risk adjusted impact: What is the impact on portfolio Volatility, Sharpe Ratio and Tracking Error?* Risk attribution: What adjustments are necessary to understand the true relative contributions to portfolio risk?* Portfolio contribution: Does this blended real estate product provide the diversification benefits of real estate in a multi-asset portfolio? Differences from other studies:Firstly, we have taken actual fund data rather than index data i.e. we are analyzing deliverable returns to investors. Similarly, by using fund data we are seeking to capture the impact of identifiable costs at all levels. Secondly, rather than use a single period, or peak to trough periods, we have broken down the study into an analysis during distinct stages of the cycle and over the full horizon (15 years). Thirdly, our dataset comprises UK unlisted funds and global real estate securities funds, whereas previous studies have looked at the performance impact of combining listed and unlisted indices of the same country. Finally, our study is seeking to provide greater understanding of the resultant impact of incorporating a real estate asset exposure for a specific investment requirement, namely the UK DC pension fund market.

Schilder, Frans, Johan Conijn, Bert Kramer, and Jan Rouwendal. The potential of home equity conversion in financing the costs of ageing societies In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

PurposeThere is increasing debate about how to finance the increasing costs of our ageing societies. Much attention in Europe has recently focussed on the extent to which households would be willing to use home equity conversion products. The question to which extent home equity can contribute in financing the needs of elderly has been left unanswered. This study quantifies to what extent future income of elderly can be increased through home equity conversion for the case of The Netherlands.DesignFor a large sample of households that are either now or in the medium long run eligible for home equity conversion we estimate the amount of home equity that can be converted. We use a stochastic model to annuitize home owners’ potential income from home equity.FindingsThere are some groups of households that may substantially increase income at old age through home equity conversion. In general, however, the additional income generated from conversion is limited. This is the result of a significant asymmetry between real estate and financial markets. In the near future additional income from home equity conversion is further decreased as a result of a cohort effect: the future elderly are more highly leveraged than the current elderly. The outcomes are robust for different model assumptions.Social implicationsThe relatively little additional income to be generated from home equity conversion puts debate about financing welfare state arrangements into new perspective. The current popular idea in The Netherlands that welfare arrangements can be partially paid for by the elderly home owners themselves is proven to be false.

Hovhannisyan, Varazdat. The Problems of Expropriation Practice in the Republic of Armenia In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Expropriation, or in other words-compulsory purchase of private property for state or public needs are rather new social phenomena in Armenia. Though a diversity of forms of ownership to immovable property has been introduced in the Armenian social life since 1991, the first cases of expropriation took place in Armenia in 2000-2001, when a big development project aimed to renovation of city center of Yerevan, called Northern Avenue was launched by the Armenian government. It is not necessary to conduct a deep analysis to understand what a big social resonance the expropriation processes have in the modern Armenian society. In order to reveal a vital social interest in the expropriation processes one can just see the periodical demonstrations of owners of property subjected to expropriation. The purpose of this paper is to examine the whole expropriation process in Armenia with the special attention to the valuation and compensation issues. The present article concerns the expropriation institution, operation spheres of that institution and application conditions. It is mentioned that at the base of each legal norm is the notion of public interest because the law is formed in the public for making the lives of people as comfortable and as civil as possible. The main idea of this paper is to try to answer on question how the legal base works in case of expropriation practice and what kind of problems are there (especially in regards of valuation and fair compensation) when the expropriation procedure is implemented when private property is taken for public needs. In the article the issues of social concussions arising as a result of expropriation operation and the challenge of avoiding them are also discussed. The short history and the past of expropriation in Armenia are also presented.

Ryu, Jongpil. The Rent Adjustment Mechanism in Office Market of Major European Cities In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Uncertainty of global economy has been increasing after fiscal crisis in America and Europe. Consequently, real estate asset and office market in Europe has been unstable also. Whereas interest in office market in has increased, studies explaining difference in natural vacancy and rent adjustment rate in European cities are incomplete. Natural vacancy means vacancy rate at equilibrium, and gap between actual vacancy rate and natural vacancy rate plays important role in rent adjustment process. This paper explains natural vacancy rate and different rent adjustment rate in major European cities using quarterly date set since 2000. Results say that natural vacancy rate exists each city and rent adjustment rates are different in those cities significantly. Difference in rent adjustment rate informs that elasticity of excessive demand or supply is different in those cities. Further researches investigating factors that influencing rent adjustment rate are needed.

Stocker, Emanuel, and David Koch. The Residual Method - a useful Method for the Valuation?! In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The residual method is applied for developing land or projects to estimate the value of an undeveloped land. It is used when there are no comparable market prices available. The residual approach starts with a notional value, the gross development value (GDV) from similar projects and less the development cost and also the profit of the developer the residual value (residuum) will be arrived. For the calculation there are many assumptions necessary and the results react very sensitively to even small changes in the input variables. The purpose of this paper is on one hand the theoretically analysis for the sensitivity and on the other hand it presents an empirical analysis based on real input variables for land values in Austria. With the aid of sensitivity analyses the influence of the input parameters are investigated. It is well known and also in the literature it is noted that the residual method is a highly sensitive method of property valuation. The results shows that the sensitivity of the residuum - more precisely, the deviations - depends on the ratio of the property value or the building value to the GDV. The lower the property value or the building value on the GDV is, the higher is the deviation of the residuum. The differences are enormous and the empirical study for Austria shows that the residual method for residential properties is only useful in certain areas.

Newell, Graeme, and Chyi Lin Lee. The risk-adjusted performance of social housing in the Netherlands: 1999-2013 In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Social housing is a key component in the Netherlands housing markets. This paper assesses the risk-adjusted performance and diversification benefits of social housing in the Netherlands over 1999-2013. This is assessed for the various social housing sub-sectors in the Netherlands, as well as being benchmarked against the performance of residential property, commercial property, shares and bonds. The strategic and social dimensions for the performance of social housing in the Netherlands is also assessed.

Theisen, Theis, and Anne Wenche Emblem. The road to higher prices? In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

How do residential property prices respond to new highway connections? We explore the impact of reduced travelling time on house prices in four different cities along the southern coast of Norway. The four towns are located as nodes on a chain, where the town of Kristiansand is located in one end of the chain-of-towns. In 2009, a new highway was opened between Kristiansand and three other towns east of Kristiansand. The three towns are located in increasing distance from Kristiansand. The new road substantially reduced the travelling time between the four towns. We use hedonic price functions estimated on the basis of sales data for dwellings in the period before and after the opening of the new highway and examine the impact of the new road on house prices. The fact that the four towns are located as nodes on a chain along the coast, with sparsely populated rural areas inland and between the towns, makes our case particularly suitable for studying the impact of a new road.We hypothesize that the new road reduced housing prices in Kristiansand, which is the largest of the four towns, and increased housing prices in the other three towns. We find that the house prices in Kristiansand increased only 14 per cent over a four-year period, while the increase was about 25 per cent for the other towns. We examine the robustness of our results by considering alternative explanations for the house price changes. We also examine the robustness of our findings by considering the development of house prices in a different town located west of Kristiansand and not directly affected of the new highway. We conclude that a the new and improved highway lead to a substantially stronger price increase in the smaller towns benefitting from better road connection to the larger town Kristiansand.

D'Arcy, Éamonn, and Sotiris Tsolacos. The Role of Bad Banks in Real Estate Asset Repositioning and Price Discovery – A case study of The National Asset Management Agency (NAMA) In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

One of the many lessons to be learned from the recent global financial crises (GFC) relates to the damage done to the functioning of national banking systems by non-performing real estate loans both residential and commercial. In the European context the experience of banks in Cyprus, Ireland, Spain and the United Kingdom provide many cases in point. From a real estate perspective the market consequences of such loans in terms of depressing market activity and postponing recovery are very significant. As a consequence the need to both recapitalise banking systems and to stimulate real estate market recovery becomes a primary concern for policy makers. This paper explores one solution to this twin problem through a case study of the Irish Governments ‘toxic’ property bank – The National Asset Management Agency (NAMA). Since its inception in 2009 NAMA has been used initially as a vehicle to recapitalise the Irish banks through the removal of in excess of 70 billion euros of non-performing real estate loans from their balance sheets and more recently as a key stimulus to real estate market recovery through a range of asset repositioning activities. In particular these activities have facilitated price discovery and brought considerable transparency to the inherent risks in the assets involved. The papers concludes by assessing the viability of the NAMA model, its principal real estate market and portfolio implications and at a wider level its key policy insights for other attempts to deliver similar outcomes such as the recent creation of a bad real estate bank in Spain.

de La Paz, Paloma Taltavull, and Michael White. The role of liquidity shocks in the housing market In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

In a previous paper (Taltavull and White, 2012) we analysed the role of money supply, migration and mortgage finance in house price evolution. Using a VECM framework we examined these variables together with income, inflation, and interest rates for both Spain and the UK. The results indicated an important role for income, mortgages and migration in UK house price movements, more so than in Spain. Financial deregulation, and increasing monetary integration have been the background against which flows of liquidity have increased. Increasing interbank flows have also linked markets in different countries providing increased liquidity that can impact the mortgage market. Traditionally, monetary policy used interest rate changes to affect GDP. However this policy tool impacts asymmetrically in Eurozone economies and is generally constrained by the highly internationally interconnected money market. In this paper we build upon our previous work and focus on the role that changes in liquidity have played in the evolution of house prices. In doing this we identify the main channels of transmission affecting the housing market. In addition we also consider how the housing market, being impacted by increased liquidity can also feedback to aggregate money supply. The models tested examine Spain and the UK and identify short run and permanent effects in the relationship between liquidity and house prices.

Farromba, Jorge. The role of the Marketing Managers in the affirmation of Brand Parque das Nações - Lisbon In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Today, the globalization , alongside the increase in urban population , brought not only a major role as the territories assigned to them autonomy and increased responsibilities , and induced the necessary conditions for the ascendancy of new strategic territories ( Ahmed , 2008) and thus , cities , regions, or as regards Kotler - places ( places) - assumed tremendous importance in the functioning of economies and people's lives , because it is in them that we live and that is where we seek the answer to our needs .Increasingly corseted time, where development , competitiveness and growth prevail in this perspective , a society and the need on the part of the territories , in particular their managers to take steps to create visible / sustainable competitive advantage emerges , capable of competing territories each other and generate sustainable economic and dynamism.Becomes urgent , create infrastructure , tourism resources , equipment ,host culture, citizenship, localism , inclusion , accessibility , allowing the creation of a separate , unique and distinguishable identity of others as well, to unify the territory in social , economic and operative terms of opportunities .In this sense , the theme of this paper is intended to help analyze how the Parque das Nações, a parish comprised a territory created from scratch , with proper , modern valances , will engage and integrate new districts, urban and antagonistic social matrix , with distinct realities but under the administrative reorganization of Lisbon , are now one parish .

Akimov, Alexey, Chyi Lin Lee, and Simon Stevenson. "The Sensitivity of European Publically Listed Real Estate to Interest Rates." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

A large number of studies have previously examined the effect of interest rate changes on the securitised real estate market. However, the majority have focused on aggregate index level data. Few studies have been undertaken on micro-level data. These lead to a question of whether previous findings can be generalised to individual firms. This study considers the impact of interest rate changes on European listed real estate companies. Using data since 1990 we examine both the aggregate index level sensitivity of European public real estate and also consider the micro-level firm specific sensitivity. Specifically, the study examines the following questions:1: Do interest rate changes have a significant impact on European real estate stocks? 2: Do real estate stocks in different markets behave differently in terms of their interest rate sensitivities?3: Do firm characteristics affect the interest rate sensitivity of real estate stocks?4: Has the interest rate sensitivity of real estate stocks changed pre, during and post financial crisis and quantitative easing ?By answering these questions, this study will offer contributions to the following areas. First, we extend the limited studies on interest rate sensitivity to European real estate markets, particularly emerging European property markets. Second, this study is the first to explicitly examine the linkages between real estate firm characteristics and interest rate sensitivity based on an international large sample. Thirdly, this is one of the first pieces of research to examine the impact of the financial crisis and quantitative easing on the interest rate sensitivity of listed real estate vehicles. The volatility of interest rates in Europe since the GFC means that a fuller understanding of interest rate sensitivity of real estate stocks over different market conditions is of importance for investors’ decision-making.

Newell, Graeme, Anh Khoi Pham, and Chyi Lin Lee. The significance of the emerging markets in the global listed property securities sector In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The emerging property markets have taken on increased significance with international property investors in recent years. This paper assesses the risk-adjusted performance and diversification benefits of listed property securities in the emerging markets over 2005-2013. This is benchmarked with the performance of listed property securities in the developed markets, shares and bonds, with this being done in a global context as well as in a regional context for Asia-Pacific, Europe, Americas and the Middle East/Africa. To understand the investment dynamics over 2005-2013, this is also considered in a pre-GFC and post-GFC sub-period context. The strategic implications for the role of the emerging markets for listed property securities investors are also highlighted.

Teuben, Bert, and Mark Clacy-Jones. The Size and Structure of the Global Real Estate Investment Universe In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

IPD has conducted research on the size of the real estate investment market for individual countries for more than 7 years, identifying the size of the domestically owned direct real estate assets within each market. This work has traditionally been carried out by employing a bottom up methodology identifying all professionally managed real estate holdings using IPD’s own confidential databank and publicly available sources on a country by country basis, concentrating on domestically owned stock.During the latter half of 2013 and into 2014 this work has been refined and extended. Firstly we have attempted to include the growing amount of real estate owned by overseas investors within each market. This foreign ownership is now a key element of many investment markets and represents a significant proportion of key markets such as New York, London & Paris.Secondly we have extended the geographic scope of the research to include more Asian markets than previously tackled plus some other emerging real estate investment markets such as Brazil. Thirdly, real estate sector estimates have been carried out across every country which is an enhancement on the all property national market estimates calculated in the past. Fourthly ownership type has been identified to allow us to better understand which types of vehicle are predominant within each market. Debt to equity ratios have also been examined at a top level to see whether we can learn anything about differing leverage ratios across countries.The IPD market size will be compared to macro-economic figures and assumptions being carried by other organisations. This piece of research gives interesting insight into the size and structure of more than thirty of the most transparent real estate investment markets globally.

Thompson, Bob. The spatial implications of Portcentric warehousing In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Over the last twenty years, investment in European industrial property has been heavily influenced by logistics – in particular optimisation of the location of warehouses. As demand for consumer goods burgeoned, retailers began to exert more power in the whole supply chain to ensure the efficient flow of goods from manufacturer to consumer. The spatial implication of this was a shift from a pattern of warehousing determined by the production of goods to one determined by the pattern of consumption. The location of warehouses was optimised around the servicing of retail outlets.Investors and asset managers bought into this structural shift and, despite their specialist nature, logistics warehouses have become a key component in any multi-sector investment portfolio. From the perspective of value, the highest numbers are seen in so called logistics hotspots identified by the optimisation process.Across Europe the logistics process is dominated by road transport. However, fuel costs and the growing importance of the green agenda have forced logisticians to reappraise the transport modes used. Concurrently, investment in new infrastructure, particularly in eastern Europe, is redrawing the boundaries of what is possible. The optimisation of warehouse location is an ongoing process and one which has a direct impact upon value when hotspots move. This paper looks at the impact of the rise of portcentric warehousing upon the value of those port locations themselves but also upon the investment values seen in existing logistics hotspots.Initially the paper will set out the supply chain context to warehouse location identifying the main trade routes and points of entry.The paper will examine the different models for optimising logistics based upon different combinations of transport modes and examine their spatial impacts in terms of warehouse location. Having identified the current hotspots values will be quantified in each location. Overlaid on this picture will be optimisation based upon a portcentric model where warehousing is developed at or close to ports of import and export. The future impact upon values will be explored using different scenarios.

Solcia, Paola, and Daniela Mosca. The success of a Model of territorial development In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The paper regards the relationship between a unitary process valorisation advantages and the increase in value of the properties analyzed (assets or territorial areas).The aim of a unitary project is to enable a synergical and coordinated approach among the different stakeholders (authorities, property owners, investors) involved in the process of redevelopment of the area, and the assets involved in the process. The success of a Model of territorial development is given by the minimization of risks related to the valorisation of real estate portfolio analyzed. Lower risks, reduce uncertainty of exit, easier disposal of assets leads to an increase in value.Some advantages of this approach: 1. the creation of synergies by exploiting the network structure of the Assets; 2. the activation of a process consistent with the broad urban and regional development;3. the ability to create offsets between different asset value to prevent disparities between properties with higher value and marginal; 4. the creation of real estate instruments in line with the vocation of the territory, with the strategic guidelines and with the real estate market conditions.The valuation model is based on a matrix that analyze factors, such as: the economics, the social context, asset quality, environmental and geological situation and others. The method will be implemented with the market, territory and stakeholders in order to contain any leakage of value and ensure successful initiative.

Sanderson, Danielle Claire, and Victoria Mary Edwards. The Tenant as a Customer: can good service improve commercial real estate performance? In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Customer Relationship Management (CRM) theory suggests that good customer service results in satisfied customers, who in turn are more likely to remain loyal and recommend the service provider to others. Proponents of good customer service for tenants claim that landlords should see a return on any investment in their customer service, in the form of enhanced real estate performance. This paper begins by reviewing research on the service – profit chain, and examines the factors which affect occupier satisfaction and property performance(total return, net rental income and capital appreciation). The research includes an assessment of the reasons occupiers choose particular premises and the differences between the main commercial asset classes (office, retail and industrial).The quantitative study includes preliminary findings from a statistical analysis of the relationship between aspects of occupier satisfaction and property returns over a ten-year period.[Author 1 bio] Danielle Sanderson read physics at Oxford University and worked in computing and operational research before become a researcher and consultant for RealService. She worked part-time whilst competing as an International athlete and raising a family. Danielle is currently a PhD researcher at Henley Business School.[Author 2 bio] Victoria Edwards is a chartered surveyor and valuer with research, consultancy and academic experience in corporate property management (urban and rural). She is a graduate of the Universities of Reading, UK (BSc and PhD) and Canterbury, NZ (MSc). She is an Associate Professor in Real Estate and Planning at the Henley Business School.

Gomes, Sandra Vieira. The traffic noise influence in the housing market. A case study for Lisbon In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The objective of this paper is to provide an empirical analysis of the influence of traffic noise has on the housing market. Traffic noise can be considered as an environmental externality from road transport system. As so, it affects the value that people are willing to pay for their houses. The value of this effect has already been studied by some authors, with Stated Preference-choice (SP-choice) methods, the hedonic pricing model, or others. The approach used in this study combines traditional methods, namely linear modelling techniques used for quantifying the effect on housing prices fluctuation, with newer methods as the spatial analysis associate d to Geographical Information Systems. There are obvious advantages to a GIS in adding spatial analytical capabilities in terms of increasing its functionality and meeting a demand for systems that do something beyond storing, retrieving and displaying large amounts of information. This study was developed for the city of Lisbon, Portugal. A geographical database was created combining information from the Census, on the housing characteristics, with renting and sales activities. This study applies spatial auto-correlation techniques to analyze the relation between traffic noise and the variation on the housing value in Lisbon, and aims to contribute to the scientific knowledge of housing market in Lisbon, with detailed and accurate information on the factors affecting its variation.

Jones, Colin, Friedrich Gormans, and Neil Dunse. The valuation of an airport: Is a cost basis appropriate? In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper will question whether traditional cost approaches apply to the valuation of an airport now that they are no longer public utilities but very much commercial enterprises. In doing so, the research explores the business model, the ownership and the importance of non-aviation business for an airport. It will examine the principles of company valuation and International Accounting Standards in determining an airport’s value and argue that an airport can be viewed as a specialist property company consisting of a series of separable components which can be valued using common property valuation methods based upon value rather than cost.

Roodhof, José Antonio, and Ronald Huisman. The value of Break-Options In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper discusses the current trend in the commercial real estate market to offer more flexible lease contracts. In this paper we assume one form of flexibility: the right to terminate the lease contract prematurely, i.e. a break-option. The lessor is exposed to more risk in cash-flow when he gives this right to a tenant and should actually be financially compensated for this risk. But how much and how? In The Netherlands it is not customary to ask for a financial compensation for flexibility when entering into a lease contract. It is more likely to apply a risk premium on top of the rent; actual a higher rent to compensate for the risk of flexibility. Determining a reasonable risk premium is not trivial because the lessor does not exactly know how long the tenant will lease. This paper describes a method to determine this risk premium and compare the results of this method with risk premiums that appraisers believe are reasonable. The method has been programmed and can be requested from the authors.We apply the real option theory to determine the height of the risk premium. Based on an example we show what the height of the risk premium should be (according to the model) if a standard lease of five years is terminable at the end of year three and year four with a notice of one month. This is just one complex example; it is possible to appraise all other forms of break-options (flexibility) with this method, but in this paper we leave these out of consideration. The results of our model are compared with the estimations of a group of senior appraisers who were asked to determine a risk premium for this break option for a specific building in Amsterdam. They determined an average of 5% risk premium . Our model determined a risk premium of 4%. Although a difference, but fairly small and explainable. The difference is in the estimation of the volatility, the degree in variation of rental prices. To determine the volatility, we used the IPD Index Netherlands, while we asked appraisers to their insight about one specific object. We probably underestimate the volatility because we could not take the unique risks of the object in consideration. We describe how a user of the model may determine the volatility of an unique object, but we do not elaborate further on this.

Bonifaci, Pietro, and Sergio Copiello. The value of energy efficiency in the real estate market of Northern Italy In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

In the last years several studies about the relationship between buildings' energy performance and residential property prices in Europe have been published. Nevertheless, there is a lack of studies regarding the Italian real estate market, probably due to the difficulties to access official data on property characteristics and transactions prices.Following the recast of European Commission's Energy Performance of Building Directive (2010/31/EU), since 2012, in Italy, is mandatory to provide information about energy performance on the real estate advertisements for the sale of a property, including energy label and CO2 emissions. Buildings are rated on a scale A to G, with A being the highest rating.The purpose of this research is to evaluate the impact of buildings' energy performance, as expressed by Energy Performance Certificates (EPCs), on the prices of residential properties in the city of Padua, representative of medium-size cities in Northern Italy.The study is based on a hedonic price model which aims to estimate the impact on house prices due to the improvement of energy performance. The study adopts a semi-logarithmic regression model. The analysis is performed on a dataset of nearly a thousand dwellings, listed on websites for property sales.The model considers as dependent variable the offer prices of dwellings, and includes indipendent variables that represent attributes such as location, typology, dimension, mainteinance condition and other features, as well as the energy label.The dwellings are all located in the city of Padua, with the exclusion of some areas of the city centre, in which the location variable could prevail on the others independent variables. The data collection period lasted from July to September 2013.Empirical findings show a positive and statistically significant relationship between buildings with better EPCs and house prices. Furthermore the relationship is stronger from class G to C, than from class C to A. The price premium for a higher energy rating is tested for robustness and consistency. Nevertheless, the study reveals a negative gap between the net present value of potential future savings and the estimated price premium.

Ryan, Paul, Clare Branigan, and Cal Muckley. The Winner’s Curse, Price Anchors and Bidder Characteristics: Evidence from Successful Residential Real Estate Auctions In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper explores the impact of behavioral biases, specifically the winner’s curse and anchoring and insufficient adjustment on auction outcomes in the Dublin residential real estate market in the period immediately preceding the peak of what became the biggest property crash in recent history in the developed world. In addition, we investigate whether the incidence of these biases is conditioned by two bidder characteristics, his/ her gender and whether the winning bidder is experienced in the residential real estate market. We find that bidders do not shade their auction bids to avoid the winner’s curse, and that auction outcomes are driven by bidder anchoring on the advertised auction guide price, and also the initial auction bid announced by the auctioneer, and are less influenced by the comparable sales prices of similar properties or prices derived from a hedonic asset pricing model. In addition, we find, contrary to expectations, that female bidders are no less prone to behavioural biases in decision making than their male counterparts and that winning experienced bidders, despite their level of expertise, tend on average to pay more for comparable properties than their less experienced counterparts. Our results in aggregate can be interpreted as being consistent with a market where behavioral biases play a part in driving auction prices and are consistent with the arguments made by Shiller (2007, 2008) in his analysis of the US sub- prime crisis.

Levy, Deborah, Helena Cooper-Thomas, Sussie Morrish, and Paul Ballantine. To cluster or not to cluster – post natural disaster relocation decisions of SMEs In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

The Christchurch earthquake of the 24th February 2011 devastated the New Zealand city and in particular its Central Business District. Extreme events such as these not only highlight the vulnerability of our communities, but also demonstrate how communities are dynamic places that are in continual change. There are similarities in the issues that communities face after a natural disaster regardless of the type of disaster that has occurred. Christchurch illustrates that the decision people make on whether they stay to rebuild or move elsewhere is highly dependent upon what happens in property markets both physical and financial. The ability of developers and key industry players to obtain financing and the cost to rebuild to new specifications will decide whether businesses stay in the same area of the city or relocate. Relocation decisions also hinge on how badly affected areas of the city are and the types of damage caused to property and infrastructure. In Christchurch it is evident that some areas that were not particularly desirable before the earthquake but were left relatively unscathed have become highly sought after. This paper utilises Christchurch to examine the relocation decisions of small and medium sized businesses that were located in the CBD. In particular it examines the phenomena of clustering in relation to socialisation and market efficiency. The research takes a qualitative approach by undertaking in-depth interviews with real estate agents working relocating businesses and a number of in-depth interviews with decision makers within a range of small and medium sized businesses.It is suggested that the decision making process of these businesses are common to disaster areas regardless of the type of disaster occurring and will thus explore how people and businesses interact with property. This study will help to increase our understanding of these relocation decisions and the dynamic and eclectic nature of rebuilding after an extreme event.

Ametefe, Frank, Simon Stevenson, and Steven Devaney. Toward a Liability Driven Investment Paradigm for DC Pensions: Implication for Real Estate Allocations In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

In this paper, we propose and implement the concept of Liability Driven Investment within the context of defined contribution pension funds, which do not have implicit liabilities. We adopt a transitional approach, by moving from a one period mean variance analysis through to a dynamic optimisation approach. This approach would enable us to see how different approaches could result in significant allocations to the various asset classes. We begin by constructing one period mean variance portfolios for different points on the risk aversion spectrum. We make use of the risk aversion figures provided in Hanna et al (2001). Here, we observe how the allocation to real estate is influenced by different risk tolerance levels. In general, it is believed that as people get closer to retirement, their risk aversion increases. Thus, results from this section would provide a guideline for the proportion of the various assets would have to be included at different points in time. Next, we run an Asset Liability Management (ALM) using a model similar to that used by Booth (2002). We construct the liability driven portfolios using the following liability benchmarks: (i) Long term government bonds (ii) Index-linked bonds (iii) Age profile of the UK. Further, we analyse the role that real estate plays in these portfolios by imposing regulatory constraints which directly impact the allocation to real estate. We obtain these regulations from the OECD (2013) Annual Survey of Investment Regulation of Pension funds. Our analysis is done from the perspective of a a UK defined contribution pension fund, although we use global indices to diversify globally. Also, in applying the rules, we simply apply the various rules currently in place (as at 2013) in all the countries even though these rules might not be in existence in the UK. We aim to determine, in general, what different regulations with respect to real estate would ultimately impact on pension fund outcomes. Also, further analyse role that real estate assets play in the resulting portfolios, we make use of a disaggregated IPD index instead of overall returns used in other studies. We include all the the various sectors that make up the IPD index and treat them as independent asset classes. Finally, following Dempster et al (2002), we use a dynamic ALM model which is a variant of the Computer-Aided Asset Liability Management (CALM) Model of Dempster (1993). This approach has also been used by Consigli and Dempster (1998

Van Duijn, Mark, Jan Rouwendal, and Richard Boersema. "Transformations of industrial heritage: Insights into external effects on house prices." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Local policy makers seek ways to deal with their abandoned industrial heritage. The investments made in these industrial heritage sites are often very substantial and designed to stimulate urban renewal. In this paper, we study whether the redevelopment of five industrial heritage sites caused external effects on house prices of nearby residential areas in The Netherlands. We use a hedonic approach to do a quasi-experiment by comparing house prices before and after the transformation. The external effect is captured by interacting the year of transformation and different distance rings around each industrial heritage site while controlling for many other important variables. We pay special attention to defining the target and control area. If the investments were made on the interior of the industrial heritage site, we find that there are no external effects on house prices of nearby residential areas. If the investments were made on the exterior of the industrial heritage site, we find positive and significant external effects on house prices. However, the decay of these effects over space are different for each case. These results suggests that the external effects are highly heterogeneous and that there is no ‘one-size-fits-all’ policy for redeveloping industrial heritage to induce positive externalities on nearby residential areas.

Filippova, Olga, and Adam Curtis. Tremors and Tenants: Does earthquake proneness affect demand for office space? In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

According to Auckland office leasing agents, the effects of the Christchurch earthquakes have rippled to New Zealand’s largest office market. We conducted face-to-face semi-structured interviews with property professionals representing five large real estate firms to explore the impact that the Government’s earthquake prone building policy is having on the country’s office markets.Very clear themes emerged from the interviews including a distinct shift in focus from Green Stars (voluntary environmental rating scheme for commercial buildings in New Zealand) to Seismic Grades. The degree to which a building meets the current New Building Standard (NBS) is now the most important consideration for tenants looking for new space in the Auckland CBD. Driving this are factors such as a concern for the health and safety of employees and tenants’ exposure to OPEX increases associated with insurance premium hikes. The latter concern is being mitigated in part through a mix of gross leases and net leases that incorporate OPEX capping.It also emerged that it is now standard practice for landlords to provide tenants with Initial Evaluation Process (IEP) reports which indicate the building’s percentage NBS and Seismic Grade. Whereby some tenants simply do not consider buildings categorised as earthquake prone (below 34% of NBS). Those willing to negotiate with these building owners are insisting on clauses stipulating that the building be strengthened.Broad views of the market ascertained through the interviews include a general ‘flight to quality’, given that the newer, higher quality building stock tends to feature the highest Seismic Grades. This presents a dilemma to owners of older, earthquake prone buildings which tend to be lower quality. Many such owners find little financial reward for carrying out upgrades being restricted by rent increases irrespective of seismic issues.It remains to be seen whether the ‘spill over’ effect from the Christchurch earthquakes will continue to dominate the Auckland market, a place not usually known for earthquakes. Study participants indicate a notable increase in the tenants’ due diligence process. Due to this awareness, the agent’s role is changing. Whereby traditionally they act on behalf of landlords, to succeed they need to address the concerns of tenants as well.

Pitros, Charalambos. "UK housing bubble case study analysis: The ‘‘behaviour’’ of UK housing bubbles and the ‘‘affordability’’ parameter." In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Purpose – The economic, political and social significance of housing bubbles is enormous. Since the mid-1980s, the UK housing markethas experienced two succeeding bubble-bust cycles, in the periods 1985/6-1989 and 2001/2-2007. These bubbles differed both in lengt and in how they ended. However, the affordability benchmarks behaved in almost exactly the same way in both cases. The majority of authors identify two ways in which a bubble can end (i.e. after the bust 'end regimes'): prices could crash suddenly, in a relativel short period of time or can move in a transition to another regime, such as slow deflation. The aim of this paper is to adjust this theory and to examine whether and why the way a housing bubble stops growing (i.e. 'growth-end regimes') affects its length, how afordability may be relevant to this and whether housing affordability can guide our investments decisions. Design/methodology/approach – The methodology focuses on cross-case analysis of the above two UK housing bubbles, using research methods such as literature review, historical analysis, regression-correlation analysis, normality tests and quality control charts. Findings – The findings reveal that the way a housing bubble ends is inherently related with affordability and that can also largely explain its length. Moreover, certain rates of housing affordability can generate a simple core theory for optimal investment decision-making in the UK housing market. Originality/value – This is the first study that examines whether the way a housing bubble stops growing affects its length and how affordability can guide our investments decisions. The paper also presents a novel use of quality control charts in the UK housing market. The results of this study can shed light on the extent to which theories of bubble end-regimes and affordability indices can offer better investment information. This paper will help real estate researchers, professionals (appraisers) and individual mortgage borrowers to better understand the nature of housing investment, thus contributing by reducing stress in the residential housing market.

Jadevicius, Arvydas, and Diane Martin. Univariate Time-Series Modelling of UK Farmland Prices In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This research employs univariate time series modelling approach to assess the dynamics of UK farmland prices. The RICS/RAU Farmland Price Index for England and Wales is selected as a dependent variable. The techniques used include Single Exponential Smoothing, Holt’s Linear Trend and ARMA models. Regardless of the limitations attached to a univariate time-series modelling approach, the estimates suggest that UK farmland prices are forecastable. These results could be employed by property market participants to gauge the future direction of UK farmland prices in the short-term.

Zheng, Chen, Gianluca Marcato, and Stanimira Milcheva. Urban Economic Openness and IPO Underpricing of Chinese Real Estate Companies In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper examines the empirical impact of trade openness on the short-run underpricing of real estate IPOs in China, on a city level. To our knowledge, this represents the first paper which employs a macroeconomic argument to explain the real estate IPO performance. Our work is based on the Balassa-Samuelson (1964) effect, which suggests a significant impact of trade openness on both direct and indirect real estate markets. Moreover, trade openness was found to increase the firms’ future profitability providing more business opportunities._Since Chinese real estate companies have strong geographic patterns with business focus in a local district – usually at city level – and the extent of openness is significantly heterogeneous, this specific market represents a useful laboratory to examine the macroeconomic effect of trade openness on the real estate IPO underpricing in urban level. The model is estimated using a dataset of primary information on real estate IPOs in China from 1992 until the end of 2013. By using the de facto measure of the trade openness and controlling for other economic and firm-specific variables, we find evidence that the trade openness of a city has a significantly negative impact on the IPO initial return. We explain this result arguing that trade openness increases the issuer and its underwriters’ confidence in the firm’s future performance and hence issuers and underwriters do not need to underprice the shares to guarantee the success of an IPO._

Awuah, Baffour, Kwasi Gyau, Colin Booth, and Jessica Lamond. Urban Land Use Conversions as an Avenue to Increase Ground Rent Revenue in the Developing World: A Suitable Case for Research In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

A rising levels of urbanisation in sub-Saharan Africa (SSA) have brought in its wake massive land use conversions most of which do not follow formal urban land development and governance protocols. While the literature is replete with studies on these unauthorised land use conversions, little research seems to have been carried-out on the possible revenue that could be generated from ground rent if these land use conversions are properly documented and managed. This study is a precursor to a proposed study on the implications of unauthorised land use conversions on ground rent revenue in SSA. Based on a review of the relevant literature, the study brings to the fore the potential for revenue to be generated from ground rents through effective and efficient management of the on-going land use conversions in the developing world. This presents opportunity for the development of a full scale research proposal to explore the phenomenon based on empirical data.

Carvalho, João-Manuel. Urban Rehabilitation – How Real Estate Development Meets Urban Planning (Case Study in Lisbon) In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Urban rehabilitation is a public concern in an epoch of very scarce public means. Partnering with private real estate development (RED), reducing or eliminating public investment and maximizing positive externalities, is a must for urban authorities. How can RED fit this rationale with good private business outcomes? Speculative RED normally targets the average end-user of the market range it addresses. This goes against the variability and the specificity that RED in urban rehabilitation commonly imposes and which brings with it accrued risk, requiring a very detailed business approach that has to be combined with the management of the legal contexts on the public side.The present importance of urban rehabilitation for the RED business derives mostly from reduced business margins elsewhere, either because sustainability makes land development very expensive or impossible, or because new lifestyles reduced willingness to pay for peripheral locations. Tourism development, which is an important business domain for RED in Portugal, has met its ceiling as far as end-user purchase demand is concerned. Urban rehabilitation is therefore a privileged business area for both RED and urban authorities, where state of the art RED resides.Finding out what are the components of a RED detailed approach to urban rehabilitation and its relationship with the urban authorities is the aim of the paper, through a much talked about case study in Lisbon.

Shi, Song. Using Assessed Values in Property Valuations In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

This paper proposes an improved net rate analysis using the assessed land values to proxy market land values in real estate appraisals. Compared to the traditional sales comparison approach, the method has greatly simplified the comparison process and extended the potential pool of comparable sales. Simulations based on the theoretical and empirical data suggest that the method benefits much from the law of compensation of errors and the impact of measurement errors in assessor land values is small. The method could be applicable in a wide range of established areas where there are few vacant land sales.

Esen, Bugra Kagan. Value of Property: Status Versus Function In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

It has been more than a decade now, since the inflow of foreign money has created a real estate boom in Turkey, which was a globally safe harbor. In addition with the lower rate mortgage loans, Turkey’s property values have skyrocketed. Many independent research works show that real estate is by far the best investment choice of the Turkish people. As they become wealthier, they tend to buy more and more properties. It is interesting to analyze; what is the motivation of buyers when they consider such a property purchase and what kind of properties do the Turkish people demand as they obtain surplus money?The two questions may have some many answers, which can be reduced to two: function and status. For single property owners, function generally means a larger, safer, warmer, living place with better features. Function, for multiple property owners, also means a money flow from monthly rent.Status, however, is a more interesting issue. Some properties in major cities are purchased for prestige, where their values cannot be justified by functionality or rent inflow. This is also because some properties are limited in quantity or may not be available at once. Waterside residences in Istanbul for instance, may be sold for up to tens of millions of Dollars. Every major Turkish city has such extremes, which are also high in number. This Paper’s contribution to the real estate sciences may be twofold: It questions the property valuation parameters in a more macroeconomic awareness and it may theoretically help well-off individuals find different ways of investment.

van der Werf, Ytzen, and Fred Huibers. Value premium in international REITs In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

We find evidence of a value premium of 12.7 per cent per annum for international developed REITs over the period Q2-1993-Q2-2013. REITs with a high book value compared to their market value (in the case of REITs book value is approximately equal to Net Asset Value (NAV)) perform significantly better than REITs with a low book to market multiple. Even after controlling for risk factors in the single factor CAPM model or the Fama French three factor model, the value strategy provides significant alpha. This suggests value premium is the result of naive extrapolation of past performance by real estate investors rather than a commensurate reward for risk. For real estate practitioners, the results provide the basis for the formulation and implementation of a viable indirect global investment strategy.

Kolbre, Ene, Veronika Aus, and Kristian Kahre. What drives Estonian housing market cycles ? In 21st Annual European Real Estate Society Conference. ERES: Conference. Bucharest, Romania, 2014.

Housing market dynamics similarly to economic environment are cyclical, which inevitably leads to highs and lows in housing market prices. The purpose of this study was to find out in which market cycle phase Estonian housing market currently is in; which factors drive Estonian housing market price movements. Analysis in this study is based on housing markets’ demand and supply models, ratio analysis and regression analysis. As Estonian housing market is relevantly young capital market starting from the beginning of 1990s, it is also a reason why only studying historic data in Estonia is not enough to receive anticipated information about the housing market’s determinants. This study also collates other European counties’ housing market cycle phases with Estonian.The results of this study brought out a long line upward trend from the beginning of the 1990s until 2007 in Estonian housing market, which was driven by economic development, consumer’s expectations and easily accessible credit. Increasing housing prices made it possible for households to borrow more using housing wealth as collateral. In Estonian housing market and also in other countries, the financial sector has most of the times directly or indirectly been the main force behind the housing booms and crises. Added features here have also been poor monetary policy and government policies which encourage affording homeownership. In year 2007 real estate bubble in Estonia burst and from that time until 2010 a rapid decrease in prices followed. The situation in housing market stabilized at the end of 2010, moved into slow growth in 2011 and into fast growth phase in 2012. This study shows that compared to previous housing bubble, the situation has improved and there is not a housing boom currently in Estonian housing market.