Benchmarking and valuation issues in measuring depreciation for European office markets

Purpose – The paper addresses the practical problems which emerge when attempting to apply longitudinal approaches to the assessment of property depreciation using valuation-based data. These problems relate to inconsistent valuation regimes and the difficulties in finding appropriate benchmarks. Design/methodology/approach – The paper adopts a case study of seven major office locations around Europe and attempts to determine ten-year rental value depreciation rates based on a longitudinal approach using IPD, CBRE and BNP Paribas datasets. Findings – The depreciation rates range from a 5 per cent PA depreciation rate in Frankfurt to a 2 per cent appreciation rate in Stockholm. The results are discussed in the context of the difficulties in applying this method with inconsistent data. Research limitations/implications – The paper has methodological implications for measuring property investment depreciation and provides an example of the problems in adopting theoretically sound approaches with inconsistent information. Practical implications – Valuations play an important role in performance measurement and cross border investment decision making and, therefore, knowledge of inconsistency of valuation practice aids decision making and informs any application of valuation-based data in the attainment of depreciation rates. Originality/value – The paper provides new insights into the use of property market valuation data in a cross-border context, insights that previously had been anecdotal and unproven in nature.

Appraiser behaviour and appraisal smoothing: some qualitative and quantitative evidence

There is a substantial literature which suggests that appraisals are smoothed and lag the true level of prices. This study combines a qualitative interview survey of the leading fund manager/owners in the UK and their appraisers with a empirical study of the number of appraisals which change each month within the IPD Monthly Index. The paper concentrates on how the appraisal process operates for commercial real estate performance measurement purposes. The survey interviews suggest that periodic appraisal services are consolidating in fewer firms and, within these major firms, appraisers adopt different approaches to changing appraisals on a period by period basis, with some wanting hard transaction evidence while others act on ‘softer’ signals. The survey also indicates a seasonal effect with greater effort and information being applied to annual and quarterly appraisals than monthly. The analysis of the appraisals within the IPD Monthly Index confirms this effect with around 5% more appraisals being moved at each quarter day than the other months. More November appraisals change than expected and this suggests that the increased information flows for the December end year appraisals are flowing through into earlier appraisals, especially as client/appraiser draft appraisal meetings for the December appraisals, a regular occurrence in the UK, can occur in November. January illustrates significantly less activity than other months, a seasonal effect after the exertions of the December appraisals.

Dimensionalising on- and off-line brands' composite equity

This paper approaches the subject of brand equity measurement on and offline. The existing body of research knowledge on brand equity measurement has derived from classical contexts; however, the majority of today's brands prosper simultaneously online and offline. Since branding on the Web needs to address the unique characteristics of computer-mediated environments, it was posited that classical measures of brand equity were inadequate for this category of brands. Aaker's guidelines for building a brand equity measurement system were thus followed and his brand equity ten was employed as a point of departure. The main challenge was complementing traditional measures of brand equity with new measures pertinent to the Web. Following 16 semi-structured interviews with experts, ten additional measures were identified.

An investigation of the effect of eco-labeling on office occupancy rates

This paper investigates the extent to which clients were able to influence performance measurement appraisals during the downturn in commercial property markets that began in the UK during the second half of 2007. The sharp change in market sentiment produced speculation that different client categories were attempting to influence their appraisers in different ways. In particular, it was recognised that the requirement for open-ended funds to meet redemptions gave them strong incentives to ensure that their asset values were marked down to market. Using data supplied by Investment Property Databank, we demonstrate that, indeed, unlisted open ended funds experienced sharper drops in capital values than other fund types in the second half of 2007, after the market turning point. These differences are statistically significant and cannot simply be explained by differences in portfolio composition. Client influence on appraisal forms one possible explanation of the results observed: the different pressures on fund managers resulting in different appraisal outcomes.

Attribution analysis of property portfolios

This paper aims to clarify the potential confusion about the application of attribution analysis to real estate portfolios. Its three primary objectives are: · To review, and as far as possible reconcile, the varying approaches to attribution analysis evident in the literature. · To give a clear statement of the purposes of attribution analysis, and its meaning for real-world property managers. · To show, using real portfolio data from IPD's UK performance measurement service, the practical implications of applying different attribution methods.

Individual assets, market structure and the drivers of return

Much UK research and market practice on portfolio strategy and performance benchmarking relies on a sector‐geography subdivision of properties. Prior tests of the appropriateness of such divisions have generally relied on aggregated or hypothetical return data. However, the results found in aggregate may not hold when individual buildings are considered. This paper makes use of a dataset of individual UK property returns. A series of multivariate exploratory statistical techniques are utilised to test whether the return behaviour of individual properties conforms to their a priori grouping. The results suggest strongly that neither standard sector nor regional classifications provide a clear demarcation of individual building performance. This has important implications for both portfolio strategy and performance measurement and benchmarking. However, there do appear to be size and yield effects that help explain return behaviour at the property level.

Consideration of persuasive technology on users acceptance of e-commerce: exploring perceived persuasiveness

Persuasive technologies, used within in the domain of interactive technology, are used broadly in social contexts to encourage customers towards positive behavior change. In the context of e-commerce, persuasive technologies have already been extensively applied in the area of marketing to enhancing system credibility, however the issue of ‘persuasiveness’, and its role on positive user acceptance of technology, has not been investigated in the technology acceptance literature. This paper reviews theories and models of users’ acceptance and use in relation with persuasive technology, and identifies their limitation when considering the impact of persuasive technology on users’ acceptance of technology; thus justifying a need to add consideration of ‘perceived persuasiveness’. We conclude by identifying variables associated with perceived persuasiveness, and suggest key research directions for future research.

Case study on the maintenance of a construction monitoring using USN-based data acquisition

In recent years, there has been an increasing interest in the adoption of emerging ubiquitous sensor network (USN) technologies for instrumentation within a variety of sustainability systems. USN is emerging as a sensing paradigm that is being newly considered by the sustainability management field as an alternative to traditional tethered monitoring systems. Researchers have been discovering that USN is an exciting technology that should not be viewed simply as a substitute for traditional tethered monitoring systems. In this study, we investigate how a movement monitoring measurement system of a complex building is developed as a research environment for USN and related decision-supportive technologies. To address the apparent danger of building movement, agent-mediated communication concepts have been designed to autonomously manage large volumes of exchanged information. In this study, we additionally detail the design of the proposed system, including its principles, data processing algorithms, system architecture, and user interface specifics. Results of the test and case study demonstrate the effectiveness of the USN-based data acquisition system for real-time monitoring of movement operations.

KPIs and their properties defined with the EXTREME method

Key Performance Indicators (KPIs) are the main instruments of Business Performance Management. KPIs are the measures that are translated to both the strategy and the business process. These measures are often designed for an industry sector with the assumptions about business processes in organizations. However, the assumptions can be too incomplete to guarantee the required properties of KPIs. This raises the need to validate the properties of KPIs prior to their application to performance measurement. This paper applies the method called EXecutable Requirements Engineering Management and Evolution (EXTREME) for validation of the KPI definitions. EXTREME semantically relates the goal modeling, conceptual modeling and protocol modeling techniques into one methodology. The synchronous composition built into protocol modeling enables raceability of goals in protocol models and constructive definitions of a KPI. The application of the method clarifies the meaning of KPI properties and procedures of their assessment and validation.