Small business lease reform - can the UK learn from the Australian experience?

This paper addresses the commercial leases policy issue of how to deal with small business tenants. The UK has adopted a voluntary solution to commercial lease reform by using Codes of Practice which is in contrast to the legislative approach adopted by Australia to attempt to solve its perceived problems with small business retail tenancies. The aim of the research was to examine the perceptions of the effectiveness of the legislation in Australia and discuss any implications for the UK policy debate. The research used a combination of literature and legislation review and a semi structured interview survey to investigate the policy aims and objectives of Australian Federal and State Governments, identify the nature and scope of the Australian legislation and examine perceptions of effectiveness of the legislation in informing small business tenants. The situation is complicated in Australia due to leases being a State rather than Federal responsibility therefore the main fieldwork was carried out in one case study State, Victoria. The paper concludes that some aspects of the Australian system can inform the UK policy debate including mandatory information provision at the commencement of negotiations and the use of lease registrars/commissioners. However, there are a number of issues that the Australian legislation does not appear to have successfully addressed including the difficulties of legislating across partial segments of the commercial property market and the collection of data for enforcement purposes.

Capturing UK real estate volitility

Volatility, or the variability of the underlying asset, is one of the key fundamental components of property derivative pricing and in the application of real option models in development analysis. There has been relatively little work on volatility in real terms of its application to property derivatives and the real options analysis. Most research on volatility stems from investment performance (Nathakumaran & Newell (1995), Brown & Matysiak 2000, Booth & Matysiak 2001). Historic standard deviation is often used as a proxy for volatility and there has been a reliance on indices, which are subject to valuation smoothing effects. Transaction prices are considered to be more volatile than the traditional standard deviations of appraisal based indices. This could lead, arguably, to inefficiencies and mis-pricing, particularly if it is also accepted that changes evolve randomly over time and where future volatility and not an ex-post measure is the key (Sing 1998). If history does not repeat, or provides an unreliable measure, then estimating model based (implied) volatility is an alternative approach (Patel & Sing 2000). This paper is the first of two that employ alternative approaches to calculating and capturing volatility in UK real estate for the purposes of applying the measure to derivative pricing and real option models. It draws on a uniquely constructed IPD/Gerald Eve transactions database, containing over 21,000 properties over the period 1983-2005. In this first paper the magnitude of historic amplification associated with asset returns by sector and geographic spread is looked at. In the subsequent paper the focus will be upon model based (implied) volatility.

Systematic property risk: quantifying UK property betas 1983-2005

The increased frequency in reporting UK property performance figures, coupled with the acceptance of the IPD database as the market standard, has enabled property to be analysed on a comparable level with other more frequently traded assets. The most widely utilised theory for pricing financial assets, the Capital Asset Pricing Model (CAPM), gives market (systematic) risk, beta, centre stage. This paper seeks to measure the level of systematic risk (beta) across various property types, market conditions and investment holding periods. This paper extends the authors’ previous work on investment holding periods and how excess returns (alpha) relate to those holding periods. We draw on the uniquely constructed IPD/Gerald Eve transactions database, containing over 20,000 properties over the period 1983-2005. This research allows us to confirm our initial findings that properties held over longer periods perform in line with overall market performance. One implication of this is that over the long-term performance may be no different from an index tracking approach.

Small business legislation in Australia: does it provide a solution to part of the UK lease reform debate?

This paper addresses the commercial leases policy issue of how to deal with small business tenants. The UK has adopted a voluntary solution to commercial lease reform by using Codes of Practice which is in contrast to the legislative approach adopted by Australia to attempt to solve its perceived problems with small business retail tenancies. The major aim of the research was to examine the perceptions of the effectiveness of the legislation in Australia and discuss any implications for the UK policy debate but the results of the research also raise questions for the Australian regime. The research used a combination of literature and legislation review and a semi structured interview survey to investigate the policy aims and objectives of Australian Federal and State Governments, identify the nature and scope of the Australian legislation and examine perceptions of effectiveness of the legislation in informing small business tenants. The situation is complicated in Australia due to leases being a State rather than Federal responsibility therefore the main fieldwork was carried out in one case study State, Victoria. The paper concludes that some aspects of the Australian system can inform the UK policy debate including mandatory information provision at the commencement of negotiations and the use of lease registrars/commissioners. However, there are a number of issues that the Australian legislation does not appear to have successfully addressed including the difficulties of legislating across partial segments of the commercial property market and the collection of data for enforcement purposes.

Transforming tradition: performances of Jingju ('Beijing Opera') in the UK

Jingju (‘Beijing opera’) is China's most iconic traditional theatre, marketed as a global signifier of Chinese theatre and national identity. Although troupes from mainland China regularly tour Europe, audiences in the UK have also had access to Jingju via two indigenous organizations: the UK Beijing Opera Society (now defunct) and the London Jing Kun Opera Association (now in its ninth year). These organizations consist of Chinese, overseas Chinese and Western performers performing both Jingju and Kunju (‘Kun opera’). Where there is a mix of ethnicity, can ‘traditional Chinese theatre’ still be conceived of as ‘traditional’? How is Jingju mapped onto non-Chinese bodies? Can Jingju performances by ethnically white performers reflect diasporic identities? Drawing on the theories of Judith Butler and Homi Bhabha, this article argues that by highlighting the performativity of identity, the performance of Jingju by non-Chinese performers challenges the notion of Jingju as a global signifier of ‘authentic traditional Chinese theatre’.

Built environment education and research in West Africa

Built environment programmes in West African universities; and research contributions from West Africa in six leading international journals and proceedings of the WABER conference are explored. At least 20 universities in the region offer degree programmes in Architecture (86% out of 23 universities); Building (57%); Civil Engineering (67%); Estate Management (52%); Quantity Surveying (52%); Surveying and Geoinformatics (55%); Urban and Regional Planning (67%). The lecturer-student ratio on programmes is around 1:25 compared to the 1:10 benchmark for excellence. Academics who teach on the programmes are clearly research active with some having published papers in leading international journals. There is, however, plenty of scope for improvement particularly at the highest international level. Out of more than 5000 papers published in six leading international peer-reviewed journals since each of them was established, only 23 of the papers have come from West Africa. The 23 papers are published by 28 academics based in 13 universities. Although some academics may publish their work in the plethora of journals that have proliferated in recent years, new generation researchers are encouraged to publish in more established journals. The analyses of 187 publications in the WABER conference proceedings revealed 18 research-active universities. Factors like quality of teaching, research and lecturer-student ratio, etc count in the ranking of universities. The findings lay bare some of the areas that should be addressed to improve the landscape of higher education in West Africa.

Non-normal real estate return distributions by property type in the UK

Investment risk models with infinite variance provide a better description of distributions of individual property returns in the IPD UK database over the period 1981 to 2003 than normally distributed risk models. This finding mirrors results in the US and Australia using identical methodology. Real estate investment risk is heteroskedastic, but the characteristic exponent of the investment risk function is constant across time – yet it may vary by property type. Asset diversification is far less effective at reducing the impact of non‐systematic investment risk on real estate portfolios than in the case of assets with normally distributed investment risk. The results, therefore, indicate that multi‐risk factor portfolio allocation models based on measures of investment codependence from finite‐variance statistics are ineffective in the real estate context