Real estate finance includes rural real estate finance and urban real estate finance. Rural real estate finance is also called farmland finance, but it has been omitted in the circle of real estate finance for a very long time. Farmland finance maybe not a problem for developed countries, but it is a key problem for developing countries, especially the socialist developing countries such as China. By means of modeling analysis, the former academic studies in the field of farmland finance are reviewed. At the same time, through the study on the generation mechanism of farmland financial institution, the recursive solution matrix of compatible motivation and critical point are obtained. Based on the foundation, the origin of the force is analyzed.

Since the mid 1970s, the impact of nearby schools on property values has been a major theme in the North-American literature, with most studies focusing on the influence of school quality. To a lesser extent, the impact proximity to school exerts on house prices has also been investigated together with the way the urban environment and distances to school affect student modal choices. Using the hedonic approach, this paper aims at assessing the price effect ensuing from proximity of, and accessibility to, the nearest primary school based on a sample of 8,285 single-family houses sold over the 1993-1996 period in Quebec City, Canada. While home-to-school walking distances are computed for properties located within one kilometre ñ a distance beyond which a school bus service is provided, car travel times measured on the 1994 GIS-operated topological street network are used for houses located further away from school. Main property features as well as neighbourhood and household descriptors are used as control variables in the model, with four urbanization patterns being distinguished on the grounds of residential densities. A major objective of this study is to test the spatial homogeneity of hedonic prices with respect to primary schools. In order to do so, the OLS method, Cassettiís expansion method and the geographically weighted regression (GWR) method are compared. Each method is assessed in regard to its ability to account for, and deal with, the presence of spatial autocorrelation in the residuals while bringing out spatial shifts in household preferences.

On the back of sustained double digit growth in passengers and freight, investment in airports is booming. Similarly, occupational demand for airport-related property has seldom been stronger and active requests for investment product abound. Industry forecasts for continued strong growth in passengers and freight have lead investors to assume that this is a one way bet. One the other hand, environmentalists at all levels continue to decry growth in air travel, for goods and people, as a major contributor to global warming. These concerns are starting to manifest themselves in legislation. This paper takes a critical look at present and future investment in both airports themselves and airport-related property across Europe. Scenarios for future performance are proposed, taking into account different political, economic, social and technological outcomes.

The monthly returns on UK real estate companies, which in the future may become REITs, are analysed over the period September 1996 to July 2006. The results indicate that the risk premiums on the UK real estate companies are significantly related to the risk premium on the stock market and to the returns of mimicking portfolios for size and book-to-market equity on common stocks. Macro factors have low explanatory power. Real estate specific factors, like real estate dividends and market cap, are found necessary to describe real estate returns in addition to the three stock market factors. The results also show that real estate has outperformed the stock market in the analysed time period with 9.11 %, due to the high returns of the real estate companies in the past five years. The risk attitude among investors is found important in explaining the reason for this high difference in performance. In addition, the results show that the office sector has outperformed the other commercial sectors in the analysed time period.

Appraisal-based indices for commercial property have been well established for many years, yet it is only in relatively recent times that serious proposals for transaction-based commercial property indices have been put forward. In contrast, in the residential property market, transaction-based property indices have been almost universally accepted; despite their well documented problems. The paper considers existing approaches to measuring movements in the residential property market, issues surrounding index construction and includes a review of the relevant literature. Based on data provided by the Australian Valuation Office, the paper considers the development of an appraisal-based residential property index and discusses its applicability and performance in relation to a number of transaction-based indices used in Australia.

An estimate of the land incidence on a property value has scarce scientific significance in valuation assessments. In fact, the Italian appraisal tradition considers a property as a whole due to the close complementarity existing between its parts. However, the concept of ìcomplementary valueî is wellñknown in investments evaluations, where the complementary ratio indicates the incidence of the land cost on the development total costs and expected yields. The component approach has become of active interest in Italy as a consequence of the harmonization process undertaken by the EU through International Accounting Standards. Companies involved in IAS accounting have to break up their instrumental tangible assets (IAS 16) in accordance with their respective useful existence and incidence cost on the total value, revaluing them at a fair value, in place of their historic cost, in order to attribute the Income Statement the sole long-term running expenses inherent to the buildings. The non depreciable land cannot be amortized. This study intends to individualize a methodological approach to the land incidence estimation. With respect to its application, especially within the Italian framework, this operation poses many transversal issues to the accounting, estimate and fiscal disciplines. This paper proposes a critical analysis of the EVS 2003 evaluation criteria, underlining how the assets value, far from being allocated through a market oriented approach, is rather inspired by income capitalization or mixed techniques. The aim of the research is to show, by way of an example, the caseñstudy of Bologna Expo District.

This paper presents information on institutional investorsí and investment consultantsí attitudes towards and their performance assumptions for the alternative asset classes, property, and the mainstream markets. It also gives estimates of UK institutional exposures to these asset classes. Much of the analysis is based on a series of interviews and the first section outlines the methodology in this respect. To set the context for the remainder of the paper, this is followed by a brief introduction to investment decision making in the institutional market, and after this, a brief discussion of the asset classes which investors and consultants see as distinct. The rest of the paper covers the substantive issues. Institutional investor exposures and trends are detailed. This draws on both the discussions with investors and consultants, information specially provided by the WM Company, and published reports and surveys. The prospective performance assumptions are outlined and the divergences from the historic outturns and between respondents explored. Finally, the paper considers the allocations implied by these views and contrasts them with those indicated by the historic data and current institutional allocations.

The purpose of this paper is to examine the stability of the beta coefficient for US equity REITs over bull and bear market conditions. In particular, we assess whether and to what extent the implied relationship between beta and returns can be established in up and down market conditions using weekly and monthly US equity REITs returns under different model specifications. Both the equity REITs index and US stock market indices are used as benchmarks. Our results bear significant investment implications for the accurate measurement of US equity REITs risk.

After a primary intensive debate in the 90th, discussions about Corporate Real Estate Management (CREM) issues - except of the introduction of REITs - have largely disrupted in Germany. Moreover the ongoing professionalizing process of real estate functions in German companies came largely to halt. In contrast a lot of CRE Managers still assume considerable potentials in raising efficiency. The prerequisite of realizing these potentials is seen in widening the mandate of CRE units onto all real estate functions and corporate property.The aim of this paper is to analyze the main drivers, perspectives, and results of bundling real estate functions in one centralized CREM unit. Via expert interviews in twelve chosen best-practice companies, mainly from the industrial sector, the developments of CREM in Germany over the past 15 years are compared. The study shows the main causes for bundling real estate functions, the primary prospected potentials, and the conversion process from a decentralized facilities caretaker to a centralized real estate service provider. Furthermore resistances of business units CREM has been faced with during the bundling process and how to solve them are emphasized. The main achievements and average savings in occupancy costs as a result of bundled real estate functions, untapped potentials, and measures to be taken into action to tap these potentials are presented, too. Additionally the organizational implementation of CREM units within the company is shown. An outlook on further steps to be taken to fulfil the requirements and needs of both shareholders and occupiers is given.

This paper examines the short- and long-run dynamics among institutional capital flows and returns in private real estate markets. The main tool of analysis we employ is a vector autoregressive (VAR) regression model in which both institutional capital flows and returns are specified as endogenous variables in a two equation simultaneous system and in which we also control for various financial and economic variables. When aggregating across U.S. CBSAs and property types, we find some evidence that both lagged NCREIF returns and lagged NCREIF flows significantly influence current returns. However, these aggregate results mask significant cross-sectional variation across different metropolitan areas and property types. In particular, we provide evidence that our aggregate results are driven by a limited number of large CBSAs. We find no evidence that returns are predictive of future NPI capital flows. We also document that institutional capital are not generally predictive of relative future capital flows.

The paper studies the conditional risk premia and volatilities in the Real Estate Investment Trust sector. In particular, the conditional correlations of REITs are estimated against a variety of equity and bond series. The paper builds upon recent work in the REIT literature to have examined the dynamics of the sector. A growing number of papers have examined the volatility characteristics of the sector. The data used in this paper consists of daily returns for the period January 1 1990 through December 30 2005 totalling 4175 observations. During this time the popularity of REITS has expanded dramatically with massive growth in investor awareness and interest focusing in on the return and volatility characteristics of the sector. The analysis is conducted using a bivariate GARCH framework. The risk premia for REITs are estimated and the conditional correlations against a variety of equity and bond sectors. Domestic equity sectors representing large cap, small cap, value and growth stocks are analyzed together with international equity markets. In relation to bonds both the Treasury and corporate markets are analyzed, with a variety of maturities analysed.

Several empirical studies have examined the volatility of either the components or the whole of real estate returns of different sectors, using data sets from a variety of sources. A number of studies looked in detail into the unconditional distributions of returns, such as Young et al (2006), other studies attempted to employ more sophisticated quantitative techniques attempting to support stochastic conditional distributions, such as Patel and Sing (2000), and Fourt et al (2006) looked into asset specific distributions using a large data set. This paper examines separately the stochastic distribution of real estate assets from the distribution of market aggregates, proposing a theoretical explanation for the link between the two. The conditional empirical distribution of each kind of capital returns is then derived by analysing the residuals of a simple first order autoregressive deterministic structure, which may or may not be complemented by higher moment conditionality GARCH family of models. The study examines capital returns of a range of real estate sectors, using both established market indices and transaction based indices that are developed for the needs of the study, and discusses the derived conditional distributions.

We examine 111 mergers and acquisitions by public U.S. Real Estate Investment Trusts (REITs) 1997-2005. We find that acquirer abnormal shareholder returns are significantly positive for mergers with private targets and significantly negative for public targets, a result that is consistent with findings for conventional firms. We examine the relationship between acquirer corporate governance and abnormal returns. Shareholder returns are lower for REITs wih larger and staggered boards, longer CEO tenure, lower percentage ownership by their CEO and management and when block holders are present. This is consistent with recent evidence form the conventional financial theory. Returns are positively related to the firm's operating performance prior to the merger announcement and negatively related to the leverage of the acquirer.

"Over the last decades the municipality of Gangi experienced the lost of population due to the strong emigration of its inhabitants towards more developed areas such as the North of Italy. Gangi is the last town of Palermo county, located 120 Km away; it rises on the Mount Marone to an altitude of 1011 meters on the sea level. To the visitor's eyes it is occurs in all its exceptionality of ""Stone Cone"" of houses leaned to close to each other, compact and chromatically similar, separated by two great valleys, in which the rivers Gangi and RainÚ flow and with an evocative scene in the background, the majestic Etna. Gangi is an historic municipality: the town delineates an increasing organization from mount to valley: the higher part, inside the three hundred town-walls, encloses the historical centre and it is characterised by narrow lanes tightened in ancient cobblestone paving. The lower part, that is expanding, is characterized by residential constructions. This trend affected the real estate market generating vacant spaces and a downward of prices. Currently, the Local Public Authorities start to promote a large project of urban regeneration intended to settle new functions able to attract both tourism and inhabitants. This Paper aims at highlight the different scenarios able to change the current situation and to quantify the effects in terms of price growth, change of population structure and labour market."

Under the traditional method of valuation, risk is implicit within the initial yield which is used to capitalise the net income into perpetuity. The yield is derived from the risk free rate, usually long-dated gilts, plus a risk premium (Hoesli and MacGregor, 2000). Where the risks are seen to be high, a higher risk premium should be added. Individual differences in the investments characteristics, such as covenant strength, are taken into account by subjective yield adjustments. The initial yield is obtained from sales comparables, with potentially only limited knowledge of the fine details associated with the transaction, such as the covenant strength default rating. This paper considers whether covenant strength risk is explicitly accounted for in the selection of the initial yield when valuing a commercial property investment, and if so, whether the associated risk premium can be directly calibrated to the credit score. The research extends previous work by the authors on Property Risk Scoring, which involves the analysis and scoring of the total risk of the property asset (Hutchison et al. 2005). his paper presents analysis of ICC credit scores of the top 25 retailers in the UK over the period 2002 to 2006, plus a case study approach to the covenant strength variability of two shopping centres to illustrate the key issues in calibrating the covenant strength risk premium when a composite initial yield is used. The paper also considers the manner in which covenant strength risk is reported to clients.

Whilst the preliminary nature of and subsequent revisions to estimates of real output provide a source of data uncertainty to macro-economic forecasters, many macro-economic data (e.g. exchange rates, interest rates and commodity prices) are easily available and not subject to measurement error. In contrast, real estate forecasters are faced with substantial hindsight uncertainty. Hendry and Clements (2003, 303) identify two fundamental sources of forecast uncertainty stating that ìall econometric models are mis-specified, and all economies have been subject to unanticipated shiftsî. This paper focuses on the contribution of data uncertainty to model mis-specification and consequent forecast uncertainty. Using data provided by three major real estate advisory firms, we investigate the level and pattern of variation in the measurement of historic real estate values and market indicators for the main European office centres. We investigate the ways in which the choice of historic time series can influence: i. model specification, ii. estimation of the coefficients of the explanatory terms and iii. the level of forecast disagreement.

This paper provides insight to understanding the factors impacting studentís decision to live on-campus and the universityís concomitant decision to build on-campus housing. We examine the relationship between the percentage of students living on-campus and a number of factors, including school ranking, cost of off-campus living, and percentage of international and graduate students. The results indicate that there is a significant positive relationship between the percentage of students living on campus and the cost of off-campus living, school ranking, the percentage of international students, the type of school (i.e. public vs. private), the amount of on-campus security provided and the cost of tuition. The university has a choice between building a new dormitory, leasing, buying an existing building, or not providing other campus housing. We further find a relationship between the factors influencing the on-campus housing construction decision by a university and the factors influencing studentís decision to live on-campus.

The Directive 2002/91/EC of the European Parliament and of the Council of 16 December 2002 (Energy Performance of Buildings Directive, EPD) requires member states to introduce an energy certification in order to reduce energy consumption in buildings. This new directive should help reveal saving potentials in real estate in order to achieve the aim of the Kyoto Protocol. It will surely set off an impulse for energy efficient restructuring of buildings. The transparency concerning energy consumption of buildings will inevitably apply to all property transactions and lease prices of buildings. In some EU member states the question of how the benchmark for heating energy should be calculated is being discussed: On the one hand it is possible to calculate the theoretic demand for energy by using physical and geographical characteristics of buildings. On the other hand it is possible to determine real energy consumption by collecting the annual demand for heating energy. The comparison of both approaches shows that the results differ fundamentally in many cases - differences of over 60% can be observed. In face of the fact that the two approaches lead to totally different results, this ìgapî is analysed in this contribution. Therefore, the annual heating energy consumption of 50 buildings was collected. Simultaneously the demand-orientated calculation was carried out. Based on deductive hypothesis testing, influencing factors like habits of tenants, micro location factors or physical building attributes were analysed to identify systematic differences between the demand-orientated and the consumption-orientated approaches.

The traditional method of developing existing office buildings has been to make improvements through renovations and refurbishments. If the focus is merely on improving the office buildings through technological changes many cost-effective and important ways of adding value are overlooked. On the other hand, understanding what the end-user organizations and individuals value in the premises helps real estate development actors in carrying out well-targeted development projects and hence achieving improved user-satisfaction. The aim of this paper is to present the perceived value adding elements in office building environment as observed by the end-user. The basic insight into the phenomenon was acquired though a literary review, which was followed by 20 in-depth interviews in 15 organizations. After analyzing the results, a model for tenant value creation was created. The interviews revealed seven dimensions along which the end-users value their premises: location; services; technical and financial functionality; image factors; tenant mix; customer relationship factors; and space related issues. These may be further divided into second order attributes, as is done in the paper. The model will increase the understanding of real estate property owners and developers on value creation and in developing new and existing properties to suit ever better to the customer demands.

In this paper the factors that are affecting the local house market in the sub districts of Istanbul metropolitan area are studied. 5 sub-districts that surrounds the historical peninsula around the Golden Horn selected in order to examine the house price distribution that are mostly surrounded by regenerated public spaces. 20 years ago Istanbul metropolitan municipality started to decentralise the industrial areas around the Golden Horn. Public investments on the decentralisation and environmental cleaning processes cost more than 650 Million $ on last 10 years. Data collected from the local real estate brokers and Internet listing services. The findings are slightly significant in the housing attributes than to the surrounding amenities. In the historical parts values are highly affected by UNESCO conservation projects and foreign buyers that lift up the market without any significance on our model; like proximity to public open space, water bodies or green spaces. Housing values are affected mostly by age and proximity to conservation sites. Model also explains price difference between the shorelines of Golden Horn. Docks and Military Bases occupy larger proportion on the northern parts of study area surrounded by illegal settlements. Istanbul Metropolitan Municipality plan to start a new PPP Urban Regeneration Projects in our study area. Findings of our research suggests and supports the location of regeneration areas could provide benefits to citizens and perform better tax income revenue to the municipality as well.

The issue of diversification in direct real estate investment portfolios has been one of the most widely studied topics in academic and practitioner literature. Most work, however, has been done using mean returns and risks for broad market segments as inputs asset allocation models, or in a few cases using data from small sets of individual properties. This paper reports results from a comprehensive testing of asset allocation modelling drawing on records of 10,000+ UK properties tracked by Investment Property Databank. It provides for the first time robust estimates of the diversification gains attainable given return, risk and cross-correlations across individual properties actually available to fund managers. The discussion of results covers implications for the number of assets and amount of money needed to construct ìbalancedî portfolios by direct investment, or via indirect specialist vehicles.

Real estate, especially housing, has an important share in the nationís wealth. For example, real estate constitutes 48.8% of total wealth in the world in 1991. Moreover, housing construction and its financing are two important factors that affect economic development in developed and developing countries. Although the mortgage system has been developing in the 1980s and 1990s in the developing economies, the impact of mortgage credits on the economy has been ignored in the literature. The only study by Erbas and Nothaft (2005), analyzes how mortgage credits affect Mexican and Turkish economies with simulation analysis by using the U.S. housing and mortgage market parameters. They find that mortgage loans will not affect the economic growth over ten year period and explain this finding with crowing out effect. In this paper, we try to close this gap in the literature and study the impact of real estate loans on economic development at province level in Turkey. Considering the unavailability of mortgage financing in Turkey, banks play a major role in growth by providing funds to households and businesses that need financing to purchase real estate. In the analysis, economic development at the province level is measured by several variables, including the GDP growth rate, the new construction of residential buildings and commercial buildings, and rents. The unavailability of house value index restricts us to estimate the impact of these loans on house values. The sample covers 67 provinces in Turkey and the period between 1990 and 2006 is analyzed.

Regulation of the residential real estate market is in general enacted to provide social benefits to the tenant, who is perceived to be the weaker partner in the landlord-tenant relationship. Academic literature has been able to document and quantify economic gains for the tenants. An alternative way of looking at this is offered by applying the growing body of ethical reasoning literature. This provides us with a better sense of the pros and cons of the regulation beyond pure economic gains. Two types of regulation in three different countries (Germany, the Netherlands, and the USA) will be analyzed using this methodology. The two types of regulation are Rent Control and Housing Quality Standards. The outcome of the analysis results in a new way of evaluating Rent Control and Housing Quality Standards and this will lead to recommendations regarding their usefulness in the three aforementioned countries.

Fast development of the real estate market and impacts of crashes and real estate value on the economy and consumption, and ways how to mitigate them have become topical issues in Estonia since the residential as well as housing loans markets were, as a result a fast economic growth, overheated by 2006. The article seeks to analyse development of the housing market in Estonia, evaluate the current situation and prognosticate potential development trends using both quantitative and quantitative methods of research. Economic indicators that show the possibility of a boom in the Estonian housing market are fast economic and loan volume growth, liberal loan conditions, taking larger credit risks, low interest rates, overpriced properties and positive expectations for the future. To evaluate the market situation we have used analysis of market trends, regression and SWOT analyses. The qualitative analysis for the study of property markets focuses on actors' perceptions and understandings of property values. The (potential) residents' preferences are assessed against their capacity to construct individual strategies based on the synthesis of multifaceted species of capital at their disposal obtained in fields of their conduct. The qualitative study enables to observe individuals' experiences over extended periods of time by combining the analysis with processes at the market and in the society at large.

The paper explores the relationship between house price growth, income levels, investor activity and the effects on entrants to the housing market. It concentrates on the area of first time buyers to the market and the issues of affordability which are now becoming increasingly apparent in Northern Ireland. House prices in Northern Ireland have experienced unprecedented growth particularly in the last 12 months (37% in 2006 alone according to the University of Ulster Quarterly House Price Index, March 2007). The rates of increase are currently amongst the highest in Europe when considering the RICS European Housing Review 2007 published in February 2007. This paper examines the impact on first time buyers where the pressure is most acute as the average income in Northern Ireland is historically lower than the rest of the UK and has not increased substantially despite rising house prices. Using twenty years of house price data from the Quarterly House Price Index and mortgage data for first time buyers from CML the effects on entrants to the market are analysed. The increasing affordability issue is examined in more depth using an affordability model developed by the University of Ulster in association with the Northern Ireland Housing Executive. The results from the affordability index are presented using GIS mapping techniques to show the geographical areas where the effects of affordability are most apparent. The paper concludes with a summary of possible policy recommendations to alleviate the pressure currently experienced by first time buyer market.

The paper begins by reviewing a stylised urban commercial property yield cycle. It then considers endogenous and particularly exogenous influences on the cycle including the role of macroeconomic factors such as interest rate changes and the property investment climate. A central issue that is addressed is the efficiency of the commercial property market in responding to fundamental variables. The focus of the research is on the differentials between cities in terms of yield levels and cycles. The empirical analysis compares the experience of the major provincial cities of the UK based on yields, equivalent yields and trends in investment funding from the IPD database.

Land markets are imperfect; they are often intervened by their host governments using the instrument of laws and regulations with the view, either to cure their imperfections or to prop them up. These policies may or may not yield the expected dividend. The trouble is, because the dividend yields of policies are not readily obvious, it is critical for them to be carefully gauged and regularly monitored. For the developing world, owing particularly to the generally high levels of noises in the available data, there are often fundamental difficulties in appraising the actual magnitude of dividends associated with particular property related policies. And very little studies are occurring in this area. Factorial designed statistical technique is employed in this study to analyse empirical data gathered in Ghana with the view to gauging the benefits that existing land policies in that country are respectively yielding. What emerges from this study is that, all the different strands of land policies in Ghana are producing positive benefits. The magnitude and significance of these benefits however vary with the policy type. Government compulsory purchase and compensation policies that have been used to acquire lands and distributed to private developers were found to be the most beneficial. The relatively high infrastructural investments and professional management in the areas so affected by this particular genre of land policy possibly account for this considerable benefits they are yielding. Land titling laws and regulations, in contrast, were found, rather surprisingly, to be offering insignificant benefits. Also, interactions among the various types of policies were unexpectedly found to be offering no real benefits at all with the effect that formalising land rights under more than one land policy type leads necessarily to extra costs without associated extra benefits. These results draw attention to the need to rethink the existing land titling arrangements in particular and governmentís infrastructure investments in general with the view to introducing a more beneficial alternative for the formalisation of land rights as well as balanced platform for all policies to contribute their optimal.

Hedonic regression models are commonly used tools in attempt to remove inherent heterogeneity in real estate market data. Our main objective is to develop hedonic time-series indices to be used in forecasting rent development in major Finnish regional markets. Another objective is to capture the development of appreciation for each explanatory variable in order to use that information to produce qualitative trend projections.Indices are constructed for 7 economic regions, which include 9 biggest cities in Finland. New leases data from KTI Finland is being used for modelling. The data comprises of c. 17,000 observations for period Sepí94-Augí06. Helsinki Metropolitan Area (HMA) is by far the biggest regional submarket with 11,000 observations. GIS software is being used for producing additional spatial variables. First approach is to create micro-indices for HMA and then theyíre aggregated into index for whole HMA region. Additionally cross-sectional location indices are created for HMA regional sub-markets. Cross-sectional coefficients are then used in foresight processes in order to extrapolate qualitative trends for real estate markets. Second approach is to create indices for each economic region both separately and by using panel estimation. Indices are tested for robustness and consistency.

The topic of interest in this study is herding behaviour in the stock market. We propose a new herd measure which is based on the cross-sectional dispersion of beta to detect the prevalence of herding phenomenon towards the market. The application of our new measure to TUNEDEX and BVMT indexes- as representatives of the Tunisian market- provide better results than those obtained by the cross-sectional stock priceís models developed by Christie and Huang (1995), Chang, Cheng and Khorana (2000) and Hwang and Salmon (2001, 2004). Moreover our findings show that the herd phenomenon consists of three essential components: constant term of herding which signals the existence of the phenomenon whatever the market conditions, the error term relative to the anticipations of the investors concerning the totality of assets, and the third component highlights that the current herding depends on the previous one.

There is widespread disagreement about the role of housing wealth in explaining consumption. Much of the empirical literature is marred by poor controls for the common drivers of house prices and consumption, including income, income growth expectations, interest rates, credit supply conditions, other assets and indicators of income uncertainty (such as changes in the unemployment rate). For instance, while the easing of credit supply conditions is usually followed by a house price boom, failure to control for the direct effect of credit liberalization on consumption can over-estimate the effect of housing wealth or collateral on consumption. This paper suggests an empirical model grounded in theory with more complete controls than hitherto used. It is applied to modeling consumption in the UK and South Africa. Both countries experienced substantial credit market liberalization and rising consumption to income ratios. However, South Africaís circumstances in the 1980s prevented an asset price boom, thus allowing the illumination of the direct role of credit liberalization. The paper incorporates methodological improvements in the measurement of credit conditions, and also clarifies the multi-faceted effects of credit liberalization on consumption.

In this paper, we study the inflation-hedging properties of investments in REITs in Turkey between December 1999 and December 2006. Two main factors motivate the study. First, compared to their counterparts in developed capital markets, Turkish REITs have some important tax incentives as well as flexibility in managing their portfolios. In particular, the law, which governs Turkish REITs, does not impose any dividend payout requirements on them. Second, the Turkish economy provides a rare and good opportunity to test the hedging behaviour of real estate stocks in periods of both high and moderate inflation rates. Turkey has experienced a persistent hyperinflation between late 1970s and the early years of the 21st century, when the inflation has started to change its course for a rather rapidly, suddenly and substantially falling one. We examine the inflation-hedging effectiveness of Turkish REITs under measures of expected and unexpected inflation. Unlike the existing literature which commonly uses Fama Schwert (1977), Fama Gibbons (1982, 1984), and ARMA models to measure expected inflation, we use the Markov regime-switching model proposed by Hamilton (1989) to modelling inflation rate in Turkey. We use a non-linear filter proposed by Hamilton (1989) and then, we employ a smoothing algorithm developed by Kim (1994). Currently we are performing the empirical analysis and expect to report the results in our presentation. We believe this paper will offer the first evidence whether and how a REITís dividend policy may play a role in its inflation-hedging properties under two starkly different inflationary processes.

Unlike for other asset classes the performance of direct property has been researched only to a small extent, especially as single-property data are hardly available. This study for the first time investigates the performance of direct property in Germany based on single-property data. Aims of the research are the identification of relevant market and property related performance factors, which lead to conclusions about the optimal allocation and selection of property investments. Due to the known heterogeneity of property it is obvious that this can best be achieved through investigating single-property data, as in this study. Cross-sectional analyses include indicators for market attraction and for the relative market positioning of each property. Among these are socio-economic data, property market data and geo-coded single-property data. Performance data and tenancy data were obtained from IPD. The investigated sample comprises 662 office properties, 184 retail properties and 585 residential properties, all of which were geo-coded and equipped with distance and driving times to local POI. Regression analyses were conducted with Total Return, Net Income Return and Capital Growth as independent variables. The results show that differences in the performance to a large extent depend on property management abilities. Micro-location particularly affects the performance of retail properties while socio-economic macro-location factors especially matter to residential properties. The valuation yield, as expected, is of major importance for property performance. Capital Growth and Net Income Return are largely affected by a different set of factors, while deviations between Total Returns mainly stem from the Capital Growth component.

Real estate markets are often subject to price shocks whose amplitude may be very high. According to R. Shiller (1998), these shocks are as difficult to explain as those that affect equity or debt markets. The investors and all financial institutions are in need of hedging products or derivatives that are based on the dynamics of the underlying asset and especially on its volatility. The standard deviation, directly computed from repeat sales, overestimates this WRS index: The repeat sales method is a means of constructing real estate price indices based on a repeated observation of property transactions. PCA repeat sales index: Baroni, Barthelemy and Mokrane (2007) use real estate capital returns and compare them to other returns calculated from economic or financial variables. To get real estate returns they use repeat sales transactions and compute their corresponding returns for the economic and financial variables. Then, each real estate returns are explained by the other returns, using a linear regression. Finally the index is estimated from the factors time series.In a first section, we describe the different methodologies and consider the risk taken into account in each index. In second section we describe the dataset which contains 1,000,000 transactions leading to more than 300 000 repeat sales observations on the Paris area during the period 1973-2005. In third section, we present the results on the return and volatility robustness to revision for the two indices. We conclude on the possibility of creating derivatives on these indices.

This study re-examines the diversification opportunities that may arise from the inclusion of the private real estate market in a mixed-asset portfolio. The paper's two primary contributions are that firstly we examine this issue through the use of a mean-variance spanning approach rather than the analysis of conventional optimal portfolios. Secondly, we also examine the issue using the recently released MIT-NCREIF Transaction Based Index.

The mixture of tenants in a large-scale retail property is not simply putting tenants together because each retailer and service provider has its own characteristics and demands in operation. The type, size, number and placement of tenants are the four key elements of tenant mix. In previous research (Yuo, T. S., Crosby, N., Lizieri, C. and McCann, P. 2003, 2004, 2005), we focused on solving the type problem of tenant mix. However, the placement issue is far more complex because it is the location and allocation of space for each tenant. In Taiwan, large-scale retail properties (over 360,000 sq ft) tend to built more vertically then those in the UK and US. The floor levels normally over 6-10 levels comparing to the UKís maximum 4 floor levels (2002). Furthermore, the competition between large department stores and shopping centres also make the distribution of floor space more flexible but increasing the difficulty in management. With the help of Geography Information System (GIS), this paper digitized four different forms of large-scale retail properties in Taiwan, 1) standard full-line department store, 2) department store enlarge to the scale of regional shopping centre (over 1 million sq ft.), 3) standard regional shopping centre, and 4) regional shopping centre but use the operation system of department stores. In this paper, several aspects of the efficiency usage for total floor space of large-scale retail properties are discussed and some spatial definition standards were also suggested.

Our primary goal is to model office and retail userís preferences over various locations in greater Helsinki region. Acquired results will then later be tested with other Finnish major cities. Primary data is acquired with phone and Internet surveys for each user group. Survey respondents are selected to be those responsible of corporate/chain location decisions. Awaited number of responses is c. 100 for each group, consisting of all major retail chains and office space users. Questions are formed as multinomial statements on 9-step Likert scale and results are processed with applied AHP approach in order to come up with weight vector for qualitative variables. Weight vectors are then supposed to be concise representations of the importance of various qualitative attributes in making location decisions. The approach differs from ëtraditionalí AHP approach in a way that it uses ordinary multinomial statements instead of pair wise comparisons. Approach was selected in attempt to diminish the number of questions each respondent is expected to answer. By using acquired weight vectors it could be possible to construct a spatial preference geo-index for each submarket. The appropriate qualitative metrics that could be used for geo-indexes will be discussed more thoroughly. An attempt to verify these results with revealed preference methods ñ more specifically hedonic pricing method ñ will be made using KTI Finland rent benchmarking data and GIS-software.

This paper assesses the response of Real Estate Investment Trusts (REIT's) to unexpected changes in US monetary policy. A critical element in this study is the use of futures markets to isolate unexpected changes in the policy rate. We find a significant negative response of REIT returns to a surprise change in the policy rate. The paper then examines the potential sources behind such an observed response. We find important differences between the REIT market and the broader equity market. Intuitively the impact of monetary policy on dividend news appears to be more pronounced in the REIT case. However, the decomposition of the response to monetary shocks is largely driven by revision in expectations regarding future excess returns and these results are largely consistent with the findings for the overall stock market as reported in Bernanke & Kuttner (2005).

The environment of real estate value will be drawn as a space describing its four sources connected with the four components of value. Similarly we may refer the four groups of factors influencing the nature of value and also the built up of them considering market based expectations of it. In this case we try to give a broad overview of the different markers that are characterized by the two basic aspects of their essence - the nature and artifact based one. Named approach will give to us a possibility to follow a different accession to the sustainability.

ERES:conference

In this paper we present the two repeat sales index methodologies developed by Case and Shiller 1987 (WRS) Baroni, BarthÈlÈmy and Mokrane 2005 (BBM). We then apply these methodologies to the Paris commercial property market. We use the CD-BIEN database that contains more than 10 000 repeat sales transactions for commercial property in the Paris area covering the 1973-2005 period. We extract from the BBM index the most important factors to explain the price evolution of commercial properties and compare the index to the more traditional WRS index. Moreover, those two repeat sales indices based on price returns are compared: to the Paris IPD index based on appraisal and to a hedonic index based on private variables and localisation variables. The analysis is made for Paris and for the different French 'departements' in the Paris area.

As interest in REIT shares grows among individual and institutional investors alike, questions surrounding the comparative performance of different types of REITs have taken on added importance. The corporate finance literature has produced some evidence that diversified firms trade at a discount to otherwise comparable specialized firms. The same organizational structures exist within equity REITs, as some are diversified across property types while others are very specialized with respect to the type properties they own and operate. However, no research to date has addressed whether a similar diversification discount might exist among equity REITs. Stated differently, do diversified REITs outperform property specific types of REITs? In order to make this determination we propose to test for performance differences among equity REITs. Using a sample of 75 equity REITs tracked over an 8 year period, we test for the existence of a diversification discount using a single-factor Jensenís Alpha, Treynor Index, Sharpe Ratio, and ìDoubleî Sharpe Ratio, which was first proposed by Vinod and Morey (1999). For Jensenís Alpha and the Treynor Index, we also compute results from a multifactor market model that accounts for inflation so to investigate whether any differences in performance observed with a single-factor model disappear when an alternative return model is specified. Since Roll (1977, 1978) famously argued that the choice of market proxy matters in performance ranking studies, we utilize four standard market proxies in testing for performance differences.

This paper examines office market performance at a city level in Britain. Markets in Birmingham, Edinburgh, Glasgow, Leeds, Manchester, the City of London and the West End (of London) are examined. The paper analyses the key determinants affecting office markets and compares similarities and differences in performance across these British cities. We analyse market adjustment and the timings of changes in property performance indicators and determine the degree of predictability in such changes. In addition, we also allow for information innovations to change the strength and timing of relationships. We use time series econometrics and test for stationarity and cointegration. We explore VAR methodology to test for Granger-causality and an error correction approach to permit examination of short run deviations from long run equilibrium. We also apply panel estimation when appropriate. The paper then discusses the interrelationships between office markets in different cities and the role that information innovations play in changes to those interrelationships.

Swap contracts in financial markets are normally priced assuming (either strong or weak) market efficiency. A recent study by Baum, Lizieri and Marcato [2006] highlighted the importance of inefficiencies for total return swap contracts in real estate markets. After identifying the main inefficiencies linked to the investment in the underlying asset, we quantify their pricing for a swap contract between real estate total returns and a LIBOR rate. We also identify the main boundaries around which, trading is still rationale for different type of contracts and investors. We find that confidence intervals around the theoretical price are inversely proportional to the length of the swap contract. They also vary depending upon the underlying asset and the type of investor acting either as a buyer or a seller.

The purpose of this study is to develop PropertyQual, a service quality instrument for property management profession and to contribute to research that analyses the relationship between expectations and perceptions of service quality. It is also aim to use a gap analysis based model to measure tenantsí perceptions of service quality in the property management of purpose built office buildings in Malaysia. This study utilizes a combination of quantitative and qualitative to research. Mixed methods allow triangulation of the findings and also enable the use of one method to inform the other, reveal paradox or contradictions, and extend the breadth of inquiry (Creswell, 1994). The Cronbach alpha and CFA analysis confirmed that PropertyQual is a robust instrument to measure service quality in the property management services. Since this study only examined the instrument within a single service (property management) in Malaysia; any suggestion that the PROPERTYQUAL is generally superior would still be premature. The current findings do provide some important insights of understanding the variables that contribute to service quality and tenants satisfaction of property management services.

This study explores real estate allocation in the investment portfolio decision from the position of an institutional investor, specifically a pension fund. We apply Sharpe and Tintís (1990) investment framework with an explicit link between investment opportunities and pension-plan obligations. This investment model arises from a traditional mean-variance asset-only optimization but also maximizes utility while incorporating liabilities. It allows for varying emphasis levels on liabilities, funding levels and risk tolerance and measures the relationship among expected returns, risk and liability hedging characteristics. The liability hedging characteristic summarizes the assets impact on the pensions fundís future funding surplus and thus quantifies the utility that investors with liabilities can derive from different asset classes. Moreover, we widen the investment opportunity set by distinguishing between direct and indirect real estate investments while broadening the empirical setting by looking beyond US allocations.

The demand for energy has led to demands for investment in the Far North regions. The regions are rich in mineral wealth but are characterised by difficult conditions in which to live and work. Exploitable resources are widely scattered with difficulties in accessing them. They are located in areas with fragile ecologies, which are indigenous peoples with their own cultures and traditional economies. Disruption to these by the demands of mineral exploitation or hydro-electricity can have a devastating impact upon these communities. Development has potential benefits but also the risk of harm. Central government and the wider populations of the countries involved also have claims upon the natural resources and may have different perspectives upon the cost-benefit trade off. There are potential conflicts between the populations of these regions and powerful companies seeking to minimise investment risks. These issues are examined through the use of examples from the Russian Federationís Sakha/Yakut Republic, Canada and Alaska. Among factors analysed are the potential of the mineral resources, legislation for regulation by central and local authorities, the readiness of and opportunities for local companies, geological-technological standards for mineral prospecting and extraction, building standards for real estate construction, norms and rules for environment protection, social-economical conditions, and action on long-term programs, state energy and corporationsí fuel strategies. The paper examines different combinations and harmonisation of programs and strategies. These can be correlated with the regional social and economical tasks, and used for the development of efficient real estate infrastructure.

The application of real options theory to commercial real estate has developed rapidly during the last 15 Years. In particular, several pricing models have been applied to value real options embedded in development projects. In this study we use a case study of a mixed-use development scheme and identify the major implied and explicit real options available to the developer. Moreover, we offer the perspective of a real market application by providing a decision framework in order to price the main real options through a binomial approach with a combined set of measures to quantify development risk and resolve uncertainty, timing, irreversibility and pricing. We identify an approach to ascertaining appropriate volatility inputs for the model. Finally we suggest our framework can be used for risk assessment purposes, both ex-ante and ex-post.

Since the 1990s real options analysis (ROA) gained popularity among finance researchers in real estate. Recent research by Quigg, Buetow and Albert, Hendershott and Ward and Holland et al. have included real option valuation models to real estate investment decision-making. Kemna and Trigeorgis have identified options embedded in capital projects that apply to real estate valuations. In the real estate development market there is evidence of multiple real options embedded within real estate development projects which add value to the project, such as the option to abandon, defer, expand, downsize or switch use. This paper aims to bridge the gap between theoretical studies and applied project valuation by describing the actual application of ROA to two real estate development projects. In one case, the real options were defined in a mutual agreement between the developer and the municipality allowing the developer to defer phases up to three years for a 5 percent premium. ROA enabled the valuation of managerial flexibility, instead of obtaining premiums based on financing costs of holding land. In the other, an approach integrating decision tree analysis and ROA involved outcomes from rezoning scenarios. In this case, the ROA model is dependent on the accuracy of the NPV from the DCF analysis. We compare these two cases and conclude by showing how the data needs and specifics of the assumptions involved need to be clarified in order to apply ROA to real estate decisions.

Japan is famous for its earthquakes. To examine effects of earthquake risk on quality of life of households, we estimate the quality of life index (QOLI) considering earthquake occurrence probability, and examine the regional differences of the QOLI among Japanese cities. We first estimate the hedonic price models of wage and housing rents using the household longitudinal data covering all Japan, and then estimate the QOLI. From the estimated results, we find that the earthquake risk has significant impacts on householdsí QOLI, and that there are large differences in QOLI among cities in Japan. We propose local government policies to prepare for earthquake risks in each city based on our results.

The Clientís Choice Programme offers tenants freedom of choice in tenure. With this programme, a housing corporation offers tenants the choice between a traditional rent contract, fixed rent or fixed rent increase contracts for a five- or ten-year period, socially bound ownership, and ownership with a buy-back option. This programme has been introduced by a Dutch housing corporation a few years ago. Currently, more and more Dutch housing corporations are implementing this programme, or are thinking about implementing it. For the landlord, the Clientís Choice Programme has the benefit of increasing cash flow, which can be used for (social) housing investments. However, there are also substantial financial risks, concerning for instance the rate of sales, the development of market values and the potential costs of having to buy back the dwellings. In this paper we present the results of a risk analysis study performed for a Dutch housing corporation that plans to introduce the Clientís Choice Programme. In this study we will look at issues like the recommended introduction speed (all dwellings at once, or gradually over a specific time span) and the probability that a tenant chooses a specific type of tenure. We analyse the impact of these issues on the development of solvency and liquidity. We use Monte Carlo simulation to establish both the expected development and the risk, measured as downside probability and Value at Risk.

The last years, and in particular 2006, have been particularly active regarding corporate operations in the real estate sector in Spain. We have seen many mergers and acquisitions of development and construction firms, and the experts foresee a similar trend for 2007. One possible reason that explains this phenomenon is the actual status quo of the sector in Spain, highly fragmented and populated by a myriad of Small and Medium Size firms, most of them family business. Another complementary reason is the possibility of economies of scale being prevalent in the sector. Thus, firms would involve into M&A operations to gain size and therefore efficiency. In this paper we begin by analysing the last corporate operations that have been carried out in the Spanish markets in the last period of time. After getting an idea of the common features of these transactions, we go one step further and try to ascertain the reasons why these M&A have been implemented. In particular, and using a sample of Spanish development and construction firms, we analyse empirically whether the data confirm the existence of scale economies. Tentative results do not support this hypothesis. Hence, we provide other explanations for this type of operations, such as easier access to the strategic raw material (land), whose market is highly imperfect in Spain, or the search of diversification opportunities through the purchase of companies that operate in segments/locations different from the one of the buyer. These explanations agree better with the Spanish experience.

Since the urban land reform in late 1980s, the land and property market have been gradually established in China. Despite of a fast growing literature on this emerging market, quantitative analysis of the land value determination mechanism has been scarce. Using a unique data set of land sales in Beijing from 2005 to 2006, this paper presents a comprehensive quantitative investigation of the land market in China. We aim to discover whether there is an effective land market at work. Hedonic price modelling technique is adopted to analyze the determining factors of land value in Beijing. We take into account the factors of location, parcel size, planning constraints, social and economics characteristics of the neighbourhood, as well as the characteristics of the buyers. A semi parametric model using a kernel core is utilized, by which the land value is allowed to change nonlinearly and non-monotonically with parcel size. Our analysis yields encouraging findings. The land value in Beijing is determined by size, planning uses, location and other neighbourhood characteristics. This agrees with the urban economic theories and empirical findings from other jurisdiction, and hence suggests that the land market in China is maturing. On the other hand, the land price is also found to be associated with buyer characteristics. Foreign invested companies pay more for land parcels on average, everything else given equal. Our empirical findings suggest that the land price in Beijing is significantly influenced by social, economic and political factors.

Many researchers have focused on the success of shopping centres in developed countries, but few studies have been done for developing countries. Using Beijing as a case study, this paper analyzes consumer shopping patterns at shopping centres. The data is collected by surveys of shoppers at four shopping centres. This paper also attempts to understand the magnetism of shopping centres and to identify the determining factors of success. The study finds distinct patterns of shopping behaviours based on patronage factors. Shopper types identified are convenience shoppers, price conscious shoppers, size conscious shoppers and facility conscious shoppers. Ordinary Least Square regressions show that the expenditure amount is positively related to good parking facilities and duration of stay, while the duration of stay is influenced by promotional activities.

In this contribution we establish hedonic pricing models integrating spatial effects. Based on prices for more than 52,000 residences in the Vienna region, which are arranged by postal code, we specify a hedonic regression model which explains the price structure in this sample. For this purpose we use explanatory variables such as the buildingís year of construction, its total floor space, the number of rooms, the floor the domicile is located on, the existence of a garage or parking area, the existence of an elevator, balcony or terrace as well as its current condition. However, not only the marginal effects of individual characteristics that contribute to the value of a building are estimated but also spatial effects. We therefore go further to integrate spatial effects by employing both geoadditive and spatial autocorrelation (SAR) models. In the geoadditive models, the postal code serves as a location variable. The spatial effect captured by this variable serves as a surrogate for variables not collected in the sample. In the SAR-models, a weighting matrix reflects spatial interaction (spatial autocorrelation) and spatial structure (spatial heterogeneity). The model can then be interpreted in terms of spatial spillovers in supply and demand for real estate. The results obtained in this study can for example be applied to project development and used for investment decisions in order to derive the future return of a building with certain characteristics in a specific district.

In 2006 Special real estate funds in Germany represent more than EUR 19 billion assets in real estate. It is quite notably that the total return fell on average from 6.5% in 2001 to 2.8% in 2005. However, during the whole analysed period of 2001-2005 the income return remained at 5.4%, whereas capital growth declined and was even negative between 2003 and 2005. Yet investors, investment companies and the public domain do not yet have any access to performance data of special real estate funds. The paper intends to close this gap. It provides a thorough comparative analysis of special real estate fund performance in Germany and clarifies why this sector, despite the low performance, sees an increase in funds. All the relevant information about the special real estate funds was collected from the federal bulletin (Bundesanzeiger). Based on standardized methods an adjusted performance measurement was carried out. In total 56 special real estate funds were analysed during the time period of 2001-2005. After a brief review of special real estate funds industry the paper focuses on a) the typical construction of special real estate funds, b) the relevant performance measures, and c) statistical analysis of funds return, total return, and operating cost.

Public universities and research facilities in Germany are very much transforming due to political, legal and organizational changes. Additionally, the number of students will increase in the next eight years by 35 percent. The requirements of users in terms of rooms and services are changing very fast too. A lack of necessary maintenance and intended building projects are already obviously.These future challenges are just solvable by appropriate actions and new concepts in public real estate management. It is stated in this paper, that addressing life cycle issues in project development helps to satisfy the present and future needs of the academies. As a step along the road Public Private Partnerships (PPP) function as a new procurement route in order to deliver public buildings in an efficient manner under life cycle aspects. The aim of this paper is to investigate factors which are important for the application of PPP in the university sector. A set of 51 questions was developed based on literature review and experts opinion. The questionnaire is used in semi-structured interviews with real estate professionals at different types of German academies such as universities, colleges, research institutions and student facilities. The data collected during the interviews is analysed concerning life cycle optimisations and risk transfer potential within a PPP procurement route. The results of the investigation show that PPP as a procurement route is equally applicable for university and research facilities. Furthermore, the application of the life cycle concept affords focusing on real estate related benchmarking data.

The social and economic transformation that took place in Poland resulted in the development of real estate markets with local, regional and national dimensions. A characteristic result of the communist era is the occurrence of a relatively high share of public resources in the structure of property ownership. Information possessed by the decision-makers plays a crucial role in managing this type of resources. The aim of this article is to present a concept of an information system to support the processes of managing municipal resources of living and commercial properties in Poland. The concept is based on existing, generally accessible real estate databases as well as internal government and market data. The proposed system would organize and effectively handle selling and leasing municipal property.

A number of studies have demonstrated the determinants of LPT returns. However, these studies investigated the determinants of LPT returns from various different perspectives. Therefore, the cross-section of expected LPT returns is still a puzzling question. This study contributes to this body of knowledge by examining the determinants of LPT returns in Australia from these various perspectives over 1993-2005. The results reveal that book-to-market ratio, momentum and downside beta provide significant explanatory power to the variations of cross-sectional LPT returns. However, the explanatory power of downside beta has diminished once the cokurtosis of LPTs is controlled. The findings provide additional insights for investors and real estate analysts into LPTs pricing.

The paper describes the extraordinary growth and strong performance of the market. On the one hand, established securities investors in Australia, Netherlands and the US are seeking to build exposure to real estate and real estate securities across global markets. On the other, investors from Europe, Japan and other parts of Asia are also increasing their allocations to real estate, and securities are starting to become of greater interest to such investors. Beyond the strong performance of securities, these investors are attracted by a series of other characteristics. This trend seems to be a cyclical response to the high liquidity in overall asset markets rather than a fundamental challenge to the REIT market. The paper also explores the trends and prospects for the sector at a global level and in each of the major regions. Although the global market continues to grow strongly, the worldís largest market, the US, has seen over US$100 billion of REIT stock taken private over the past 18 months. This raises questions over the prospect for the continued growth of the securities market, but the report argues that this trend seems to be a cyclical response to the high liquidity in overall asset markets rather than a fundamental challenge to the REIT market. The report covers a broad range of issues in considerable detail to demonstrate the profound structural changes in both the underlying real estate markets and in the securities markets around the world.

In a comparison between Australian and United Kingdom property markets this paper re-examines the sensitivity and importance of interest rates and stock market price behaviour on securitised property by decomposing their long-run impact between transient and permanent effects. This is achieved in a framework that accounts for endogenously determined structural breaks. The results provide a different perspective on the relationship securitised property has with these markets and sheds new light on their long-run interaction. The literature has produced mixed results on whether interest rates or stock market performance drive long run behaviour in securitised property markets. The results from this research show that, once structural breaks are accounted for, securitised property in Australian and UK property markets is driven by both interest rate and stock market changes.

A plenty of studies have contributed to the body of knowledge on the performance of real estate investment trusts (REITs). Many of them have attempted to examine the inter-temporal relationship between REITs and property stocks using time domain techniques such as regression, cross-correlation, causality and co-integration techniques. Yet, almost all these studies focus on private real estate. In December 2005, the first REIT comprising commercial real estate (retail facilities and car parking spaces) from the public domain came up to the market in Hong Kong. This public REIT, the Link, forms the subject of this study which is aimed to investigate the performance of public REIT. It is anticipated that public REIT performs more or less the same as other stocks of utility companies because both are heavily reliant of income generation rather than capital gains, which are subject to certain institutional constraints regarding their investment strategy. Overall, the findings from this paper are supportive of the proposition that public REIT return index are linked strongly with utility stock return index, although weak link is also found between REIT return and property stock return. However, the public REIT has just been launched for less than 2 years, when more information about the performance of public REIT is available as the market of REITs becomes more and more mature, the REIT-utility-property linkage may change.

In order to satisfy family daily needs, people will devote their efforts to get wages and exchange them for commodities and services in markets. Consequently, work becomes a primary activity of household heads on weekdays. If the work starting time is fixed, the commuting trips will be concentrated during peak hours, resulting in traffic congestion. Congestion will result in traffic accidents, air pollution, noise, and higher travel cost (time) and will make workersí quality of life worse. This study proposes that a ìflexible time systemî will have strong effects on workersí ìwork starting time choiceî and ìcommuting time choiceî. Furthermore, workersí ìschedule evaluationî will be affected by ìwork starting time choiceî and ìcommuting time choiceî. Therefore, the commuting time will be changed if work starting time becomes flexible. Consequently, traffic congestion at peak hours will be diminished. In other words, workers can arrange their daily time more efficiently and get higher utility from their schedule evaluations under a flexible time system. From the viewpoint of schedule evaluations, the commuting time choice model under a flexible time system will be established. The stated preference method will be used to evaluate the effect of a flexible time system. Finally, the results can be viewed as a practical suggestion concerning travel demand management for planners.

Tenure choice and dwelling type choice are two important parts in decision process of housing demand, and both of them are closely connected. Most of studies focused on tenure choice and ignored the relationship between it and dwelling type. The other few studies still canít explain decision process and meaning of housing demand of households. Nowadays, Logisitc regressions are commonly used to model decision process of housing demand, but the models are controversially inadequate and restricted. Therefore, multinominal logit model and nested logit model can be used to model joint choice of tenure and dwelling type, and the inclusive value which provided from nested logit model can be used to identify the decision process of housing demand. This study tries to model housing demand and to discuss the relationship between tenure choice and dwelling type choice.

Britain may be unique in its tradition of flood insurance which is taken out as part of a much wider coverage of risks to commercial and residential buildings, and it is usual for lenders to require that purchasers of buildings take out and maintain insurance cover to protect the value of their assets. Several issues are affecting the insurance industryís perception of the risks to flooding in England, including the government-led drive to construct 200,000 dwellings within flood-prone sites, and, with the effects of climate change promising more severe storms and increased rainfall in the UK. There is a very real probability that, in certain locations, flooding will cease to be an insurable possibility and become an uninsurable probability. This could have huge implications for the property market in the UK, as well as for the perceptions of and reliance on insurance as a normal part of the property occupiersí protection of their asset value. This paper will report on on-going research into how the need for more dwellings in areas at risk from fluvial or estuarial flooding could impact on flood insurance cover in the UK and the responses of the British government, responsible authorities and the insurance industry and discuss to what extent the property industry can help to reduce the exposure of dwellings in flood-prone areas.

In all markets quality and revenues are considered to be connected. In the field of real estate, the ìqualityî of the location is considered a particularly influential factor for the realised rent level and asset price. The office space user preferences concerning location characteristics, which are expressed in the implicit price paid for these features, have been extensively analysed. In contrast, the office property features that relate to the physical office building have received less scientific interest. It is reasonable to assume that not only the quality of the location matters, but also the features and the associated quality level of the office building itself. Market reports about obsolete office buildings have highlighted the significance of office building features. An office building can become obsolete, and remain vacant, because its features do not meet current occupiersí requirements. In less extreme cases, occupiers derive less utility from the office building and are willing to pay less. This research focuses on the office space user preferences that relate to the office building features and in a lesser degree to the characteristics relating to the location. Which building and location characteristics contribute to superior performance of office property? Whereby, superior performance is considered to be expressed in high rent revenues per square meter lettable floor area. Based on former research, characteristics are identified which are included in the study. Henceforward, a Delphi panel approach is employed to rank the building and location characteristics according to their significance for the occupiersí value judgement.

"The valuation system development was started in Belarus in 1992. Over the last fifteen years, the amount of valuations has increased rapidly due to the fast development of the Belarusian property market. Today the major clients for valuations are banks, enterprises, owners and investors; and the most commonly assessed value is the market value. But only 2006-2007 can be considered as the years when valuation system got legal and systematic background. The main documents, adjusting valuation activity in Belarus, are the Decree of the President of the Republic of Belarus ? 615 from October 13, 2006 ""About valuation activity in Republic Belarus"" and confirmed by Decree Statute ""About valuation of the cost of a civil rights objects in Republic Belarus"". In accord with the decree it has been developing the Belarusian valuation standards, system of attestation of valuers and ctr."

Contrasting with European trends, the Dutch national government decided in 2004 to change its protective retail planning model in a new much more liberal model and to leave it to the regional authorities to decide on the future of the Dutch retail landscape. The (unexpected) result of this institutional change seems to be the unbridled increase of peripheral retail developments, potentially taking a massive amount of trade away from existing retail locations. In response, the regional authorities decided in 2006 jointly to reinstall the main elements of former national retail planning policy. However, the effectiveness of the return to this protective planning ideology seems doubtful, due to the irreversibility of a substantial part of the current developments on the retail market. These developments call into question whether it would have been possible to ëpredictí, by some kind of ex ante policy evaluation, the impact of the shift in retail planning ideology on the functioning and the outcome of the market for (peripheral) retail development in the Netherlands. This paper investigates the usefulness of the application of property rights theory to analyse systematically the effects of institutional change at the Dutch retail market. The Dutch retail planning case serves as an example for a more general discussion about the use of property rights theory in a normative way to evaluate the potential impact of institutional change on land and property markets.

ERES:conference

Managers should invest in assets (i.e. relevant profitable investments) that maximize the value of their firm. Recent trend shows that many large companies have sold or outsourced corporate real-estate assets. The underlying motives for such behaviour are yet to be examined (at least in a French context). If real-estate matters, we should observe an association between proxies of value creation and the change in real-estate assets within a company. This paper investigates the association between surrogates of EVA and MVA generated by French listed companies and the weight of real-estate in their assetsí portfolio. Using a pool sample composed of the SBF 250 companies ñ over the period 1999-2004 ñ our empirical results show that, an increase in the proportion of real-estate assets (over total assets) is negatively associated with EVA, but specifically for firms in the service industries exhibiting low real-estate intensity. The regressions on MVA show a negative association with the change in the real-estate for firms outside the service industries. Those results suggest the sales of real-estate assets can be driven by value maximizing behaviour.

Leases in continental Europe, including France, tend to be relatively short and have more frequent tenant break options than in the UK. Investors reflect the risk of a relatively early departure in their pricing, explaining in part the difference in yields. But are they accurately assessing this risk? In practice, how often do tenants exercise their break options, or leave at the end of their lease? In 2006, IPD France has conducted extensive research with Drivers Jonas in order to answer the following questions: // How many leases provide for a tenant break option after three and/or six years? // How many tenants exercise their break options? - How long do tenants remain in their premises? This survey helps to understand the tenant behaviour and the leases conditions in the French market. The first release of this survey was performed in 2003, allowing comparisons: three-yearly tenant break options were the most significant across all sectors; they were more significant for smaller offices and in Paris Central than in the rest of the Paris Region. Are those still the cases? What is the proportion of tenantsí with three-yearly break options, six-yearly break options and nine-yearly break options to choose to remain in their premises? Has the length of occupation decreased or not across all types of property compared with 2003, is there more consistency between types of properties, location and size of premises?

The key question that underlies this paper is whether real estate will continue to have a place in a mixed-asset portfolio, when institutional investors can select from a range of investments outside the core asset classes of bonds and equities. It is often stated that hedge funds, private equity and commodities all offer the benefit of portfolio diversification due to a low correlation with equities. This diversification potential is often used to argue for the inclusion of real estate in a portfolio, hence, if these benefits can be obtained in another way, with the added benefit of liquidity and lower transaction costs, does it imply that real estate allocations will fall? In this paper we investigate in detail the risk and return characteristics of real estate and a selection of alternative assets, the benefits that arise from diversification and role of these assets in an institutional investorís portfolio.