Individual assets, market structure and the drivers of return

Much prior research on the structure and performance of UK real estate portfolios has relied on aggregated measures for sector and region. For these groupings to have validity, the performance of individual properties within each group should be similar. This paper analyses a sample of 1,200 properties using multiple discriminant analysis and cluster analysis techniques. It is shown that conventional property type and spatial classifications do not capture the variation in return behaviour at the individual building level. The major feature is heterogeneity - but there may be distinctions between growth and income properties and between single and multi-let properties that could help refine portfolio structures.

International evidence on the predictability of returns to securitized real estate assets: econometric models versus neural networks

The performance of various statistical models and commonly used financial indicators for forecasting securitised real estate returns are examined for five European countries: the UK, Belgium, the Netherlands, France and Italy. Within a VAR framework, it is demonstrated that the gilt-equity yield ratio is in most cases a better predictor of securitized returns than the term structure or the dividend yield. In particular, investors should consider in their real estate return models the predictability of the gilt-equity yield ratio in Belgium, the Netherlands and France, and the term structure of interest rates in France. Predictions obtained from the VAR and univariate time-series models are compared with the predictions of an artificial neural network model. It is found that, whilst no single model is universally superior across all series, accuracy measures and horizons considered, the neural network model is generally able to offer the most accurate predictions for 1-month horizons. For quarterly and half-yearly forecasts, the random walk with a drift is the most successful for the UK, Belgian and Dutch returns and the neural network for French and Italian returns. Although this study underscores market context and forecast horizon as parameters relevant to the choice of the forecast model, it strongly indicates that analysts should exploit the potential of neural networks and assess more fully their forecast performance against more traditional models.

The impact of livestock assets among indigenous communities: findings from a comparative model in Bolivia

Measuring poverty has occupied a lot of space in the development discourse. Over the years a number of approaches have been offered to capture the experience of what it means to be poor. However, latterly such approaches often ignore core assets. Indeed, the comparative impact of livestock vs. other core assets such as land and education on poverty has not been well explored. Therefore, the authors created an 'asset impact model' to examine changes to both tangible and intangible assets at the household level, with a particular focus on gender and ethnicity among communities residing in the Bolivian Altiplano. The simple model illustrates that for indigenous women, a 20 per cent increase in the livestock herd has the same impact on household income as increasing the education levels by 20 per cent and household land ownership by 5 per cent. The study illustrates the potential role of a productive, tangible asset, i.e. livestock, on poverty reduction in the short term. The policy implications of supporting asset-focused measures of poverty are discussed.

The domestic garden: its contribution to urban green infrastructure

Domestic gardens provide a significant component of urban green infrastructure but their relative contribution to eco-system service provision remains largely un-quantified. ‘Green infrastructure’ itself is often ill-defined, posing problems for planners to ascertain what types of green infrastructure provide greatest benefit and under what circumstances. Within this context the relative merits of gardens are unclear; however, at a time of greater urbanization where private gardens are increasingly seen as a ‘luxury’, it is important to define their role precisely. Hence, the nature of this review is to interpret existing information pertaining to gardens /gardening per se, identify where they may have a unique role to play and to highlight where further research is warranted. The review suggests that there are significant differences in both form and management of domestic gardens which radically influence the benefits. Nevertheless, gardens can play a strong role in improving the environmental impact of the domestic curtilage, e.g. by insulating houses against temperature extremes they can reduce domestic energy use. Gardens also improve localized air cooling, help mitigate flooding and provide a haven for wildlife. Less favourable aspects include contributions of gardens and gardening to greenhouse gas emissions, misuse of fertilizers and pesticides, and introduction of alien plant species. Due to the close proximity to the home and hence accessibility for many, possibly the greatest benefit of the domestic garden is on human health and well-being, but further work is required to define this clearly within the wider context of green infrastructure.

Does regional infrastructure investment stimulate extra housing and commercial building supply? Long-run evidence across the English regions

This paper uses long-term regional construction data to investigate whether increases infrastructure investment in the English regions leads to subsequent rises in housebuilding and new commercial property, using time series modeling. Both physical (roads and harbours) and social infrastructure (education and health) impacts are investigated across nine regions in England. Significant effects for physical infrastructure are found across most regions and, also, some evidence of a social infrastructure effect. The results are not consistent across regions, which may be due to geographical differences and to network and diversionary effects. However, the results do suggest that infrastructure does have some impact but follows differential lag structures. These results provide a test of the hypothesis of the economic benefits of infrastructure investment in an approach that has not been used before.

The impact of energy performance certificates on the rental and capital values of commercial property assets: some preliminary evidence from the UK

This paper focuses on the effect of energy performance ratings on the capital values, rental values and equivalent yields of UK commercial property assets. Of which a small number are also BREEAM rated, the study is based upon 708 commercial property assets held in the IPD UK Universe drawn from across all PAS segments. Incorporating a range of controls such as unexpired lease term, vacancy rate and tenant credit risk, hedonic regression procedures are used to estimate the effect of EPC rating. The study finds no evidence of a strong relationship between environmental and/or energy performance and rental and capital value. Bearing in mind the small number of BREEAM rated assets, there was a small but statistically significant effect on equivalent yield only. Similarly, there was no evidence that the EPC rating had any effect on Market Rent or Market Value with only minor effects of EPC ratings on equivalent yields. The preliminary conclusion is that energy labelling is not yet having the effects on Market Values and Market Rents that provide incentives for market participants to improve the energy efficiency of their commercial real estate assets.

Establishing a reliable Jini infrastructure for parallel applications

Java is becoming an increasingly popular language for developing distributed and parallel scientific and engineering applications. Jini is a Java-based infrastructure developed by Sun that can allegedly provide all the services necessary to support distributed applications. It is the aim of this paper to explore and investigate the services and properties that Jini actually provides and match these against the needs of high performance distributed and parallel applications written in Java. The motivation for this work is the need to develop a distributed infrastructure to support an MPI-like interface to Java known as MPJ. In the first part of the paper we discuss the needs of MPJ, the parallel environment that we wish to support. In particular we look at aspects such as reliability and ease of use. We then move on to sketch out the Jini architecture and review the components and services that Jini provides. In the third part of the paper we critically explore a Jini infrastructure that could be used to support MPJ. Here we are particularly concerned with Jini's ability to support reliably a cocoon of MPJ processes executing in a heterogeneous envirnoment. In the final part of the paper we summarise our findings and report on future work being undertaken on Jini and MPJ.

Adoption of green revolution services and poverty reduction in Ghana

In Sub-Saharan Africa (SSA) the technological advances of the Green Revolution (GR) have not been very successful. However, the efforts being made to re-introduce the revolution call for more socio-economic research into the adoption and the effects of the new technologies. The paper discusses an investigation on the effects of GR technology adoption on poverty among households in Ghana. Maximum likelihood estimation of a poverty model within the framework of Heckman's two stage method of correcting for sample selection was employed. Technology adoption was found to have positive effects in reducing poverty. Other factors that reduce poverty include education, credit, durable assets, living in the forest belt and in the south of the country. Technology adoption itself was also facilitated by education, credit, non-farm income and household labour supply as well as living in urban centres. Inarguably, technology adoption can be taken seriously by increasing the levels of complementary inputs such as credit, extension services and infrastructure. Above all, the fundamental problems of illiteracy, inequality and lack of effective markets must be addressed through increasing the levels of formal and non-formal education, equitable distribution of the 'national cake' and a more pragmatic management of the ongoing Structural Adjustment Programme.