Depreciation and its impact on the total return of UK commercial real estate, 1994-2003

Depreciation is a key element of understanding the returns from and price of commercial real estate. Understanding its impact is important for asset allocation models and asset management decisions. It is a key input into well-constructed pricing models and its impact on indices of commercial real estate prices needs to be recognised. There have been a number of previous studies of the impact of depreciation on real estate, particularly in the UK. Law (2004) analysed all of these studies and found that the seemingly consistent results were an illusion as they all used a variety of measurement methods and data. In addition, none of these studies examined impact on total returns; they examined either rental value depreciation alone or rental and capital value depreciation. This study seeks to rectify this omission, adopting the best practice measurement framework set out by Law (2004). Using individual property data from the UK Investment Property Databank for the 10-year period between 1994 and 2003, rental and capital depreciation, capital expenditure rates, and total return series for the data sample and for a benchmark are calculated for 10 market segments. The results are complicated by the period of analysis which started in the aftermath of the major UK real estate recession of the early 1990s, but they give important insights into the impact of depreciation in different segments of the UK real estate investment market.

The future of lean construction: a brave new world

Lean construction is considered from a human resource management (HRM) perspective. It is contended that the UK construction sector is characterised by an institutionalised regressive approach to HRM. In the face of rapidly declining recruitment rates for built environment courses, the dominant HRM philosophy of utilitarian instrumentalism does little to attract the intelligent and creative young people that the industry so badly needs. Given this broader context, there is a danger that an uncritical acceptance of lean construction will exacerbate the industry's reputation for unrewarding jobs. Construction academics have strangely ignored the extensive literature that equates lean production to a HRM regime of control, exploitation and surveillance. The emphasis of lean thinking on eliminating waste and improving efficiency makes it easy to absorb into the best practice agenda because it conforms to the existing dominant way of thinking. 'Best practice' is seemingly judged by the extent to which it serves the interests of the industry's technocratic elite. Hence it acts as a conservative force in favour of maintaining the status quo. In this respect, lean construction is the latest manifestation of a long established trend. In common with countless other improvement initiatives, the rhetoric is heavy in the machine metaphor whilst exhorting others to be more efficient. If current trends in lean construction are extrapolated into the future the ultimate destination may be uncomfortably close to Aldous Huxley's apocalyptic vision of a Brave New World. In the face of these trends, the lean construction research community pleads neutrality whilst confining its attention to the rational high ground. The future of lean construction is not yet predetermined. Many choices remain to be made. The challenge for the research community is to improve practice whilst avoiding the dehumanising tendencies of high utilitarianism.

Regulatory reform and productivity change in Indian banking

This paper examines the impact of regulatory reform on productivity growth and its components for Indian banks in 1992-2009. We estimate parametric and non-parametric efficiency frontiers, followed by Divisia and Malmquist indexes of Total Factor Productivity respectively. To account for technology heterogeneity among ownership types we utilise a metafrontier approach. Results are consistent across methodologies and show sustained productivity growth, driven mainly by technological progress. Furthermore, results indicate that different ownership types react differently to changes in the operating environment. The position of foreign banks becomes increasingly dominant and their production technology becomes the best practice in the industry.

The property development industry and sustainable urban brownfield regeneration in England: an analysis of case studies in Thames Gateway and Greater Manchester

The property development industry is a key actor in UK brownfield regeneration projects. UK policy has attempted to interlink ‘sustainable development’ and ‘sustainable brownfield’ policy agendas, which have found an additional focus through the UK government’s ‘Sustainable Communities Plan’, part of a growing international emphasis on sustainable development. This paper examines the emergence of these agendas and related policies, and the role of the property development industry in the regeneration of six differing brownfield sites, based in Thames Gateway and Greater Manchester. Using a conceptual framework, the paper investigates aspects of the sustainability of these projects and highlights key lessons from them for both the UK and overseas. The research is based on structured interviews with a variety of stakeholders, including developers, planners, consultants and community representatives to highlight emerging best practice and related policy implications.

Putting the S-word back into Sustainability: Can we be more social?

In an era dominated by climate change debate and environmentalism there is a real danger that the important ‘social’ pillar of sustainability drops out of our vocabulary. This can happen at a variety of scales from business level through to building and neighbourhood level regeneration and development. Social sustainability should be at the heart of all housing and mixed-use development but for a variety of reasons tends to be frequently underplayed. The recent English city riots have brought this point back sharply into focus. The relationships between people, places and the local economy all matter and this is as true today as it was in the late 19th century when Patrick Geddes, the great pioneering town planner and ecologist, wrote of ‘place-work-folk’. This paper, commissioned from Tim Dixon, explains what is meant by social sustainability (and how it is linked to concepts such as social capital and social cohesion); why the debate matters during a period when ‘localism’ is dominating political debate; and what is inhibiting its growth and its measurement. The paper reviews best practice in post-occupancy social sustainability metric systems, based on recent research undertaken by the author on Dockside Green in Vancouver, and identifi es some of the key operational issues in mainstreaming the concept within major mixed-use projects. The paper concludes by offering a framework for the key challenges faced in setting strategic corporate goals and objectives; prioritising and selecting the most appropriate investments; and measuring social sustainability performance by identifying the required data sources

Design and management of sustainable built environments

The United Nation Intergovernmental Panel on Climate Change (IPCC) makes it clear that climate change is due to human activities and it recognises buildings as a distinct sector among the seven analysed in its 2007 Fourth Assessment Report. Global concerns have escalated regarding carbon emissions and sustainability in the built environment. The built environment is a human-made setting to accommodate human activities, including building and transport, which covers an interdisciplinary field addressing design, construction, operation and management. Specifically, Sustainable Buildings are expected to achieve high performance throughout the life-cycle of siting, design, construction, operation, maintenance and demolition, in the following areas: • energy and resource efficiency; • cost effectiveness; • minimisation of emissions that negatively impact global warming, indoor air quality and acid rain; • minimisation of waste discharges; and • maximisation of fulfilling the requirements of occupants’ health and wellbeing. Professionals in the built environment sector, for example, urban planners, architects, building scientists, engineers, facilities managers, performance assessors and policy makers, will play a significant role in delivering a sustainable built environment. Delivering a sustainable built environment needs an integrated approach and so it is essential for built environment professionals to have interdisciplinary knowledge in building design and management . Building and urban designers need to have a good understanding of the planning, design and management of the buildings in terms of low carbon and energy efficiency. There are a limited number of traditional engineers who know how to design environmental systems (services engineer) in great detail. Yet there is a very large market for technologists with multi-disciplinary skills who are able to identify the need for, envision and manage the deployment of a wide range of sustainable technologies, both passive (architectural) and active (engineering system),, and select the appropriate approach. Employers seek applicants with skills in analysis, decision-making/assessment, computer simulation and project implementation. An integrated approach is expected in practice, which encourages built environment professionals to think ‘out of the box’ and learn to analyse real problems using the most relevant approach, irrespective of discipline. The Design and Management of Sustainable Built Environment book aims to produce readers able to apply fundamental scientific research to solve real-world problems in the general area of sustainability in the built environment. The book contains twenty chapters covering climate change and sustainability, urban design and assessment (planning, travel systems, urban environment), urban management (drainage and waste), buildings (indoor environment, architectural design and renewable energy), simulation techniques (energy and airflow), management (end-user behaviour, facilities and information), assessment (materials and tools), procurement, and cases studies ( BRE Science Park). Chapters one and two present general global issues of climate change and sustainability in the built environment. Chapter one illustrates that applying the concepts of sustainability to the urban environment (buildings, infrastructure, transport) raises some key issues for tackling climate change, resource depletion and energy supply. Buildings, and the way we operate them, play a vital role in tackling global greenhouse gas emissions. Holistic thinking and an integrated approach in delivering a sustainable built environment is highlighted. Chapter two demonstrates the important role that buildings (their services and appliances) and building energy policies play in this area. Substantial investment is required to implement such policies, much of which will earn a good return. Chapters three and four discuss urban planning and transport. Chapter three stresses the importance of using modelling techniques at the early stage for strategic master-planning of a new development and a retrofit programme. A general framework for sustainable urban-scale master planning is introduced. This chapter also addressed the needs for the development of a more holistic and pragmatic view of how the built environment performs, , in order to produce tools to help design for a higher level of sustainability and, in particular, how people plan, design and use it. Chapter four discusses microcirculation, which is an emerging and challenging area which relates to changing travel behaviour in the quest for urban sustainability. The chapter outlines the main drivers for travel behaviour and choices, the workings of the transport system and its interaction with urban land use. It also covers the new approach to managing urban traffic to maximise economic, social and environmental benefits. Chapters five and six present topics related to urban microclimates including thermal and acoustic issues. Chapter five discusses urban microclimates and urban heat island, as well as the interrelationship of urban design (urban forms and textures) with energy consumption and urban thermal comfort. It introduces models that can be used to analyse microclimates for a careful and considered approach for planning sustainable cities. Chapter six discusses urban acoustics, focusing on urban noise evaluation and mitigation. Various prediction and simulation methods for sound propagation in micro-scale urban areas, as well as techniques for large scale urban noise-mapping, are presented. Chapters seven and eight discuss urban drainage and waste management. The growing demand for housing and commercial developments in the 21st century, as well as the environmental pressure caused by climate change, has increased the focus on sustainable urban drainage systems (SUDS). Chapter seven discusses the SUDS concept which is an integrated approach to surface water management. It takes into consideration quality, quantity and amenity aspects to provide a more pleasant habitat for people as well as increasing the biodiversity value of the local environment. Chapter eight discusses the main issues in urban waste management. It points out that population increases, land use pressures, technical and socio-economic influences have become inextricably interwoven and how ensuring a safe means of dealing with humanity’s waste becomes more challenging. Sustainable building design needs to consider healthy indoor environments, minimising energy for heating, cooling and lighting, and maximising the utilisation of renewable energy. Chapter nine considers how people respond to the physical environment and how that is used in the design of indoor environments. It considers environmental components such as thermal, acoustic, visual, air quality and vibration and their interaction and integration. Chapter ten introduces the concept of passive building design and its relevant strategies, including passive solar heating, shading, natural ventilation, daylighting and thermal mass, in order to minimise heating and cooling load as well as energy consumption for artificial lighting. Chapter eleven discusses the growing importance of integrating Renewable Energy Technologies (RETs) into buildings, the range of technologies currently available and what to consider during technology selection processes in order to minimise carbon emissions from burning fossil fuels. The chapter draws to a close by highlighting the issues concerning system design and the need for careful integration and management of RETs once installed; and for home owners and operators to understand the characteristics of the technology in their building. Computer simulation tools play a significant role in sustainable building design because, as the modern built environment design (building and systems) becomes more complex, it requires tools to assist in the design process. Chapter twelve gives an overview of the primary benefits and users of simulation programs, the role of simulation in the construction process and examines the validity and interpretation of simulation results. Chapter thirteen particularly focuses on the Computational Fluid Dynamics (CFD) simulation method used for optimisation and performance assessment of technologies and solutions for sustainable building design and its application through a series of cases studies. People and building performance are intimately linked. A better understanding of occupants’ interaction with the indoor environment is essential to building energy and facilities management. Chapter fourteen focuses on the issue of occupant behaviour; principally, its impact, and the influence of building performance on them. Chapter fifteen explores the discipline of facilities management and the contribution that this emerging profession makes to securing sustainable building performance. The chapter highlights a much greater diversity of opportunities in sustainable building design that extends well into the operational life. Chapter sixteen reviews the concepts of modelling information flows and the use of Building Information Modelling (BIM), describing these techniques and how these aspects of information management can help drive sustainability. An explanation is offered concerning why information management is the key to ‘life-cycle’ thinking in sustainable building and construction. Measurement of building performance and sustainability is a key issue in delivering a sustainable built environment. Chapter seventeen identifies the means by which construction materials can be evaluated with respect to their sustainability. It identifies the key issues that impact the sustainability of construction materials and the methodologies commonly used to assess them. Chapter eighteen focuses on the topics of green building assessment, green building materials, sustainable construction and operation. Commonly-used assessment tools such as BRE Environmental Assessment Method (BREEAM), Leadership in Energy and Environmental Design ( LEED) and others are introduced. Chapter nineteen discusses sustainable procurement which is one of the areas to have naturally emerged from the overall sustainable development agenda. It aims to ensure that current use of resources does not compromise the ability of future generations to meet their own needs. Chapter twenty is a best-practice exemplar - the BRE Innovation Park which features a number of demonstration buildings that have been built to the UK Government’s Code for Sustainable Homes. It showcases the very latest innovative methods of construction, and cutting edge technology for sustainable buildings. In summary, Design and Management of Sustainable Built Environment book is the result of co-operation and dedication of individual chapter authors. We hope readers benefit from gaining a broad interdisciplinary knowledge of design and management in the built environment in the context of sustainability. We believe that the knowledge and insights of our academics and professional colleagues from different institutions and disciplines illuminate a way of delivering sustainable built environment through holistic integrated design and management approaches. Last, but not least, I would like to take this opportunity to thank all the chapter authors for their contribution. I would like to thank David Lim for his assistance in the editorial work and proofreading.

Ontology modeling for generation of clinical pathways

Purpose: Increasing costs of health care, fuelled by demand for high quality, cost-effective healthcare has drove hospitals to streamline their patient care delivery systems. One such systematic approach is the adaptation of Clinical Pathways (CP) as a tool to increase the quality of healthcare delivery. However, most organizations still rely on are paper-based pathway guidelines or specifications, which have limitations in process management and as a result can influence patient safety outcomes. In this paper, we present a method for generating clinical pathways based on organizational semiotics by capturing knowledge from syntactic, semantic and pragmatic to social level. Design/methodology/approach: The proposed modeling approach to generation of CPs adopts organizational semiotics and enables the generation of semantically rich representation of CP knowledge. Semantic Analysis Method (SAM) is applied to explicitly represent the semantics of the concepts, their relationships and patterns of behavior in terms of an ontology chart. Norm Analysis Method (NAM) is adopted to identify and formally specify patterns of behavior and rules that govern the actions identified on the ontology chart. Information collected during semantic and norm analysis is integrated to guide the generation of CPs using best practice represented in BPMN thus enabling the automation of CP. Findings: This research confirms the necessity of taking into consideration social aspects in designing information systems and automating CP. The complexity of healthcare processes can be best tackled by analyzing stakeholders, which we treat as social agents, their goals and patterns of action within the agent network. Originality/value: The current modeling methods describe CPs from a structural aspect comprising activities, properties and interrelationships. However, these methods lack a mechanism to describe possible patterns of human behavior and the conditions under which the behavior will occur. To overcome this weakness, a semiotic approach to generation of clinical pathway is introduced. The CP generated from SAM together with norms will enrich the knowledge representation of the domain through ontology modeling, which allows the recognition of human responsibilities and obligations and more importantly, the ultimate power of decision making in exceptional circumstances.

Lessons from real estate partnerships in the UK: Drivers, barriers and critical success factors

Purpose – This paper seeks to summarise the main research findings from a detailed, qualitative set of structured interviews and case studies of Real Estate Partnership (REP) schemes in the UK, which involve the construction of built facilities. The research, which was funded by the Foundation for the Built Environment, examines the evolution of REPs in the UK and in Europe. The paper also aims to analyse best practice, critical factors for success, and lessons for the future. Design/methodology/approach – The research in this paper is based around ten semi-structured interviews conducted with senior representatives from corporate occupiers, property consultants, legal practices and REP service providers. Findings – The research in the paper demonstrates that REPs are particularly suited to the UK, where lease lengths are relatively long, and the level of corporate real estate owner-occupation is often higher than elsewhere. It also shows that further research is needed to examine the future shape and form of the UK REP market. Research limitations/implications – The paper is based on a limited number of in-depth case study interviews. The paper shows that further research is needed to find better ways to examine REPs empirically. Practical implications – The paper is important in highlighting a number of main issues in developing REPs: identifying with occupier's objectives; risk transfer and size of contract; and developing appropriate innovation and skills. Originality/value – The paper examines the drivers, barriers and critical success factors (at strategic and operational levels) for REPs in the UK in detail and will be of value to property managers, facilities managers, investors, financiers, and others involved in the REP process.

The role of retailing in urban regeneration

Recent ‘best practice’ research and guidance has emphasised the important role that can be played by retail-led urban regeneration projects, particularly in ‘under-served markets’ in the UK. This builds on ideas first formulated in the USA by Michael Porter through his close relationship with the Initiative for the Competitive Inner City (ICIC). This paper critically examines the role of retailing in urban regeneration nationally and locally in the UK, focusing on in-town shopping centres located in inner city areas of the UK. The paper is based on case study research in these centres, and was completed during 2003 for The Office of Science and Technology. The paper examines how employment impact in retail-led regeneration is commonly measured, and calls for more research to determine the real impact of retail in deprived communities using other, relevant measures.

Lessons from the private finance initiative in the UK: benefits, problems and critical success factors

Purpose – This paper summarises the main research findings from a detailed, qualitative set of structured interviews and case studies of private finance initiative (PFI) schemes in the UK, which involve the construction of built facilities. The research, which was funded by the Foundation for the Built Environment, examines the emergence of PFI in the UK. Benefits and problems in the PFI process are investigated. Best practice, the key critical factors for success, and lessons for the future are also analysed. Design/methodology/approach – The research is based around 11 semi-structured interviews conducted with stakeholders in key PFI projects in the UK. Findings – The research demonstrates that value for money and risk transfer are key success criteria. High procurement and transaction costs are a feature of PFI projects, and the large-scale nature of PFI projects frequently acts as barrier to entry. Research limitations/implications – The research is based on a limited number of in-depth case study interviews. The paper also shows that further research is needed to find better ways to measure these concepts empirically. Practical implications – The paper is important in highlighting four main areas of practical improvement in the PFI process: value for money assessment; establishing end-user needs; developing competitive markets and developing appropriate skills in the public sector. Originality/value – The paper examines the drivers, barriers and critical success factors for PFI in the UK for the first time in detail and will be of value to property investors, financiers, and others involved in the PFI process.

Using paleo-climate comparisons to constrain future projections in CMIP5

We present a description of the theoretical framework and "best practice" for using the paleo-climate model component of the Coupled Model Intercomparison Project (Phase 5) (CMIP5) to constrain future projections of climate using the same models. The constraints arise from measures of skill in hindcasting paleo-climate changes from the present over 3 periods: the Last Glacial Maximum (LGM) (21 thousand years before present, ka), the mid-Holocene (MH) (6 ka) and the Last Millennium (LM) (850–1850 CE). The skill measures may be used to validate robust patterns of climate change across scenarios or to distinguish between models that have differing outcomes in future scenarios. We find that the multi-model ensemble of paleo-simulations is adequate for addressing at least some of these issues. For example, selected benchmarks for the LGM and MH are correlated to the rank of future projections of precipitation/temperature or sea ice extent to indicate that models that produce the best agreement with paleoclimate information give demonstrably different future results than the rest of the models. We also find that some comparisons, for instance associated with model variability, are strongly dependent on uncertain forcing timeseries, or show time dependent behaviour, making direct inferences for the future problematic. Overall, we demonstrate that there is a strong potential for the paleo-climate simulations to help inform the future projections and urge all the modeling groups to complete this subset of the CMIP5 runs.

Towards a standardised metadata protocol for urban meteorological networks

With the growing number and significance of urban meteorological networks (UMNs) across the world, it is becoming critical to establish a standard metadata protocol. Indeed, a review of existing UMNs indicate large variations in the quality, quantity, and availability of metadata containing technical information (i.e., equipment, communication methods) and network practices (i.e., quality assurance/quality control and data management procedures). Without such metadata, the utility of UMNs is greatly compromised. There is a need to bring together the currently disparate sets of guidelines to ensure informed and well-documented future deployments. This should significantly improve the quality, and therefore the applicability, of the high-resolution data available from such networks. Here, the first metadata protocol for UMNs is proposed, drawing on current recommendations for urban climate stations and identified best practice in existing networks

IS capabilities for supporting post crisis regulatory compliance

The financial crisis of 2007-2009, has precipitated large scale regulatory change. Financial organizations are faced with implementing new regulations of considerable breadth and depth. Firms are faced with engaging in complex and costly change management programs at a time when profits are diminished. Furthermore, investors are becoming increasingly focused on compliance are seeking to ensure that organizations can demonstrate robust compliance practices as part of their due diligence process .The role of IS in underpinning stable, is paramount. IS allows the stable and consistent controls for meeting regulations in order to ensure long term effective compliance. Consequently, our study explores the IS capabilities which support the post crisis regulatory landscape. We identify eight key capabilities: Managing Internal Controls, Measuring Monitoring and Reporting Transactions, IS Development and Procurement, Managing Third Parties, Sharing and Selecting Best Practice, IS Leadership, Data Management and Enabling Cultural Change.

Achieving market segmentation from B2B sectorisation

Purpose – The creation of a target market strategy is integral to developing an effective business strategy. The concept of market segmentation is often cited as pivotal to establishing a target market strategy, yet all too often business-to-business marketers utilise little more than trade sectors or product groups as the basis for their groupings of customers, rather than customers' characteristics and buying behaviour. The purpose of this paper is to offer a solution for managers, focusing on customer purchasing behaviour, which evolves from the organisation's existing criteria used for grouping its customers. Design/methodology/approach – One of the underlying reasons managers fail to embrace best practice market segmentation is their inability to manage the transition from how target markets in an organisation are currently described to how they might look when based on customer characteristics, needs, purchasing behaviour and decision-making. Any attempt to develop market segments should reflect the inability of organisations to ignore their existing customer group classification schemes and associated customer-facing operational practices, such as distribution channels and sales force allocations. Findings – A straightforward process has been derived and applied, enabling organisations to practice market segmentation in an evolutionary manner, facilitating the transition to customer-led target market segments. This process also ensures commitment from the managers responsible for implementing the eventual segmentation scheme. This paper outlines the six stages of this process and presents an illustrative example from the agrichemicals sector, supported by other cases. Research implications – The process presented in this paper for embarking on market segmentation focuses on customer purchasing behaviour rather than business sectors or product group classifications - which is true to the concept of market segmentation - but in a manner that participating managers find non-threatening. The resulting market segments have their basis in the organisation's existing customer classification schemes and are an iteration to which most managers readily buy-in. Originality/value – Despite the size of the market segmentation literature, very few papers offer step-by-step guidance for developing customer-focused market segments in business-to-business marketing. The analytical tool for assessing customer purchasing deployed in this paper originally was created to assist in marketing planning programmes, but has since proved its worth as the foundation for creating segmentation schemes in business marketing, as described in this paper.