The dynamics and measurement of commercial property depreciation in the UK

Beginning with an extensive literature review, this new research summary report analyses the process of rental depreciation, its effect on the performance of rents, and the impacts of capital expenditure on depreciation. It is based on an analysis of more than 700 commercial and industrial properties and newer property types and it is the most comprehensive national study of rental depreciation since the 1986 CALUS report. The report will be of interest to valuers, fund managers, institutional investors and their advisors and researchers.

Future shock or e-hype?: the impact of online shopping on UK retail property

This research examines the impact of ecommerce on sales and rental values and on the future space and ownership/leasing requirements of UK retailers for 2000-2005. The independent study, commissioned by BCSC (and funded by BCSC Educational Trust with support from the RICS Education Trust), included a major postal survey, follow-up interviews, a retail focus group, and shopper survey and case study of Cyberton, a town in the South East of England. The study was conducted by the Research Department of The College of Estate Management between June and December 2000.

An alternative approach to investigating lead-lag relationships between stock and stock index futures markets

In the absence of market frictions, the cost-of-carry model of stock index futures pricing predicts that returns on the underlying stock index and the associated stock index futures contract will be perfectly contemporaneously correlated. Evidence suggests, however, that this prediction is violated with clear evidence that the stock index futures market leads the stock market. It is argued that traditional tests, which assume that the underlying data generating process is constant, might be prone to overstate the lead-lag relationship. Using a new test for lead-lag relationships based on cross correlations and cross bicorrelations it is found that, contrary to results from using the traditional methodology, periods where the futures market leads the cash market are few and far between and when any lead-lag relationship is detected, it does not last long. Overall, the results are consistent with the prediction of the standard cost-of-carry model and market efficiency.

A comparative analysis of the accuracy and uncertainty in real estate and macroeconomic forecasts

We compare and contrast the accuracy and uncertainty in forecasts of rents with those for a variety of macroeconomic series. The results show that in general forecasters tend to be marginally more accurate in the case of macro-economic series than with rents. In common across all of the series, forecasts tend to be smoothed with forecasters under-estimating performance during economic booms, and vice-versa in recessions We find that property forecasts are affected by economic uncertainty, as measured by disagreement across the macro-forecasters. Increased uncertainty leads to increased dispersion in the rental forecasts and a reduction in forecast accuracy.

Rationality and momentum in real estate investment forecasts

This study examines the rationality and momentum in forecasts for rental, capital value and total returns for the real estate investment market in the United Kingdom. In order to investigate if forecasters are affected by the general economic conditions present at the time of forecast we incorporate into the analysis Gross Domestic Product(GDP) and the Default Spread (DS). The empirical findings show high levels of momentum in the forecasts, with highly persistent forecast errors. The results also indicate that forecasters are affected by adverse conditions. This is consistent with the finding that they tend to exhibit greater forecast error when the property market is underperforming and vice-versa.

Achieving production and conservation simultaneously in tropicalagricultural landscapes

Increasing population size and demand for food in the developing world is driving the intensification ofagriculture, often threatening the biodiversity within the farmland itself and in the surrounding land-scape. This paper quantifies bird and tree species richness, tree carbon and farmer’s gross income, andinteractions between these four variables, across an agricultural gradient in central Uganda. We showedthat higher cultivation intensities in farmed landscapes resulted in increased income but also a declinein species richness of birds and trees, and reductions in tree carbon storage. These declines were particu-larly marked with a shift from high intensity smallholder mixed cropping to plantation style agriculture.This was especially evident for birds where significant declines only occurred in plantations. Small scalefarming will likely continue to be a key source of cash income for the rural populations, and ensuring‘sustained agricultural growth’ within such systems while minimising negative impacts on biodiversityand other key ecosystem services will be a major future challenge.

Paying for long-term performance: restructuring bankers’ pay for risk regulation

The purpose of this paper is to propose hybrid capital securities as a new approach to compensation for senior bank executives and risk-takers instead of cash or equity-based compensation currently adopted by the industry. The global financial turmoil indicated that misaligned pay-for-performance compensation arrangements encouraged management short-termism and rewarded excessive risk-taking behaviour in Anglo-Saxon system. Rather than regulating specific instruments and processes, we believe that it is much more efficient to overhaul the compensation scheme to align it with risk management and governance. This empirical paper investigates the European hybrid market by employing data from the Merrill Lynch Global Index System from 2000 to 2010. Our paper contributes to both literature and practices by designing a structured scheme to tie the executive’s interests to long-term performance of the bank, the goal of regulators and the economy at large which consequently reduce the probability of future bank failures.

Does more detailed information mean better performance? An experiment in information explicitness

Purpose – Investors are now able to analyse more noise-free news to inform their trading decisions than ever before. Their expectation that more information means better performance is not supported by previous psychological experiments which argue that too much information actually impairs performance. The purpose of this paper is to examine whether the degree of information explicitness improves stock market performance. Design/methodology/approach – An experiment is conducted in a computer laboratory to examine a trading simulation manipulated from a real market-shock. Participants’ performance efficiency and effectiveness are measured separately. Findings – The results indicate that the explicitness of information neither improves nor impairs participants’ performance effectiveness from the perspectives of returns, share and cash positions, and trading volumes. However, participants’ performance efficiency is significantly affected by information explicitness. Originality/value – The novel approach and findings of this research add to the knowledge of the impact of information explicitness on the quality of decision making in a financial market environment.

On the predictive content of leading indicators: the case of U.S. real estate markets

This paper employs a probit and a Markov switching model using information from the Conference Board Leading Indicator and other predictor variables to forecast the signs of future rental growth in four key U.S. commercial rent series. We find that both approaches have considerable power to predict changes in the direction of commercial rents up to two years ahead, exhibiting strong improvements over a naïve model, especially for the warehouse and apartment sectors. We find that while the Markov switching model appears to be more successful, it lags behind actual turnarounds in market outcomes whereas the probit is able to detect whether rental growth will be positive or negative several quarters ahead.

Bacillus coagulans GBI-30, 6086 modulates Faecalibacterium prausnitzii in older men and women

Abstract Background: Advancing age is linked to a decrease in beneficial bacteria such as Bifidobacterium spp. and reduced aspects of innate immune function. Objectives: We investigated whether daily consumption of a probiotic [Bacillus coagulans GBI-30, 6086 (BC30); GanedenBC30] could improve immune function and gut function in men and women aged 65–80 y, using a double-blind, placebo-controlled crossover design. Method: Thirty-six volunteers were recruited and randomly assigned to receive either a placebo (microcrystalline cellulose) or the probiotic BC30 (1 3 109 colony-forming units/capsule). Volunteers consumed 1 treatment capsule per day for 28 d, followed by a 21-d washout period before switching to the other treatment. Blood and fecal samples were collected at the beginning and end of each treatment period. Fecal samples were used to enumerate bacterial groups and concentrations of calprotectin. Peripheral blood mononuclear cells (PBMCs) were extracted from whole blood to assess natural killer cell activity and lipopolysaccharide (LPS)-stimulated cytokine production. C-reactive protein concentrations were measured in plasma. Results: Consumption of BC30 significantly increased populations of Faecalibacterium prausnitzii by 0.1 log10 cells/mL more than during consumption of the placebo (P = 0.03), whereas populations of Bacillus spp. increased significantly by 0.5 log10 cells/mL from baseline in volunteers who consumed BC30 (P = 0.007). LPS-stimulated PBMCs showed a 0.2 ng/mL increase in the anti-inflammatory cytokine IL-10 28 d after consumption of BC30 (P < 0.05), whereas the placebo did not affect IL-10, and no overall difference was found in the effect of the treatments. Conclusions: Daily consumption of BC30 by adults aged 65–80 y can increase beneficial groups of bacteria in the human gut and potentially increase production of anti-inflammatory cytokines. This study shows the potential benefits of a probiotic to improve dysbiosis via modulation of the microbiota in older persons. J Nutr doi: 10.3945/jn.114.199802.

Energy performance ratings and house prices in Wales: an empirical study

This paper investigates the price effect of EPC ratings on the residential dwelling prices in Wales. It examines the capitalisation of energy efficiency ratings into house prices using two approaches. The first adopts a cross-sectional framework to investigate the effect of EPC band (and EPC rating) on a large sample of dwelling transactions. The second approach is based on a repeat-sales methodology to examine the impact of EPC band and rating on house price appreciation. The results show that, controlling for other price influencing dwelling characteristics, EPC band does affect house prices. This observed influence of EPC on price may not be a result of energy performance alone; the effect may be due to non-energy related benefits associated with certain types, specifications and ages of dwellings or there may be unobserved quality differences unrelated to energy performance such as better quality fittings and materials. An analysis of the private rental segment reveals that, in contrast to the general market, low-EPC rated properties were not traded at a significant discount, suggesting different implicit prices of potential energy savings for landlords and owner-occupiers.

Assessing the accuracy and dispersion of real estate investment forecasts

Existing empirical evidence has frequently observed that professional forecasters are conservative and display herding behaviour. Whilst a large number of papers have considered equities as well as macroeconomic series, few have considered the accuracy of forecasts in alternative asset classes such as real estate. We consider the accuracy of forecasts for the UK commercial real estate market over the period 1999-2011. The results illustrate that forecasters display a tendency to under-estimate growth rates during strong market conditions and over-estimate when the market is performing poorly. This conservatism not only results in smoothed estimates but also implies that forecasters display herding behaviour. There is also a marked difference in the relative accuracy of capital and total returns versus rental figures. Whilst rental growth forecasts are relatively accurate, considerable inaccuracy is observed with respect to capital value and total returns.

Future changes in the Western North Pacific tropical cyclone activity projected by a multidecadal simulation with a 16-km global atmospheric GCM

How tropical cyclone (TC) activity in the northwestern Pacific might change in a future climate is assessed using multidecadal Atmospheric Model Intercomparison Project (AMIP)-style and time-slice simulations with the ECMWF Integrated Forecast System (IFS) at 16-km and 125-km global resolution. Both models reproduce many aspects of the present-day TC climatology and variability well, although the 16-km IFS is far more skillful in simulating the full intensity distribution and genesis locations, including their changes in response to El Niño–Southern Oscillation. Both IFS models project a small change in TC frequency at the end of the twenty-first century related to distinct shifts in genesis locations. In the 16-km IFS, this shift is southward and is likely driven by the southeastward penetration of the monsoon trough/subtropical high circulation system and the southward shift in activity of the synoptic-scale tropical disturbances in response to the strengthening of deep convective activity over the central equatorial Pacific in a future climate. The 16-km IFS also projects about a 50% increase in the power dissipation index, mainly due to significant increases in the frequency of the more intense storms, which is comparable to the natural variability in the model. Based on composite analysis of large samples of supertyphoons, both the development rate and the peak intensities of these storms increase in a future climate, which is consistent with their tendency to develop more to the south, within an environment that is thermodynamically more favorable for faster development and higher intensities. Coherent changes in the vertical structure of supertyphoon composites show system-scale amplification of the primary and secondary circulations with signs of contraction, a deeper warm core, and an upward shift in the outflow layer and the frequency of the most intense updrafts. Considering the large differences in the projections of TC intensity change between the 16-km and 125-km IFS, this study further emphasizes the need for high-resolution modeling in assessing potential changes in TC activity.

Struggles over family land? Tree crops, land and labour in Ghana's Brong-Ahafo region

Agricultural land use in much of Brong-Ahafo region, Ghana has been shifting from the production of food crops towards increased cashew nut cultivation in recent years. This article explores everyday, less visible, gendered and generational struggles over family farms in West Africa, based on qualitative, participatory research in a rural community that is becoming increasingly integrated into the global capitalist system. As a tree crop, cashew was regarded as an individual man's property to be passed on to his wife and children rather than to extended family members, which differed from the communal land tenure arrangements governing food crop cultivation. The tendency for land, cash crops and income to be controlled by men, despite women's and young people's significant labour contributions to family farms, and for women to rely on food crop production for their main source of income and for household food security, means that women and girls are more likely to lose out when cashew plantations are expanded to the detriment of land for food crops. Intergenerational tensions emerged when young people felt that their parents and elders were neglecting their views and concerns. The research provides important insights into gendered and generational power relations regarding land access, property rights and intra-household decision-making processes. Greater dialogue between genders and generations may help to tackle unequal power relations and lead to shared decision-making processes that build the resilience of rural communities.

Business life cycle and capital structure: evidence from Chinese manufacturing firms

This paper uses a panel data-fixed effect approach and data collected from Chinese public manufacturing firms between 1999 and 2011 to investigate the impacts of business life cycle stages on capital structure. We find that cash flow patterns capture more information on business life cycle stages than firm age and have a stronger impact on capital structure decision-making. We also find that the adjustment speed of capital structure varies significantly across life cycle stages and that non-sequential transitions over life cycle stages play an important role in the determination of capital structure. Our study indicates that it is important for policy-makers to ensure that products and financial markets are well-balanced.