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.

Measuring the impact of observations on the predictability of the Kuroshio Extension in a shallow-water model

In this paper sequential importance sampling is used to assess the impact of observations on a ensemble prediction for the decadal path transitions of the Kuroshio Extension (KE). This particle filtering approach gives access to the probability density of the state vector, which allows us to determine the predictive power — an entropy based measure — of the ensemble prediction. The proposed set-up makes use of an ensemble that, at each time, samples the climatological probability distribution. Then, in a post-processing step, the impact of different sets of observations is measured by the increase in predictive power of the ensemble over the climatological signal during one-year. The method is applied in an identical-twin experiment for the Kuroshio Extension using a reduced-gravity shallow water model. We investigate the impact of assimilating velocity observations from different locations during the elongated and the contracted meandering state of the KE. Optimal observations location correspond to regions with strong potential vorticity gradients. For the elongated state the optimal location is in the first meander of the KE. During the contracted state of the KE it is located south of Japan, where the Kuroshio separates from the coast.

Measuring the discrepancy between fecundity and lifetime reproductive success in a pollinating fig wasp

Lifetime reproductive success in female insects is often egg- or time-limited. For instance in pro-ovigenic species, when oviposition sites are abundant, females may quickly become devoid of eggs. Conversely, in the absence of suitable oviposition sites, females may die before laying all of their eggs. In pollinating fig wasps (Hymenoptera: Agaonidae), each species has an obligate mutualism with its host fig tree species [Ficus spp. (Moraceae)]. These pro-ovigenic wasps oviposit in individual ovaries within the inflorescences of monoecious Ficus (syconia, or ‘figs’), which contain many flowers. Each female flower can thus become a seed or be converted into a wasp gall. The mystery is that the wasps never oviposit in all fig ovaries, even when a fig contains enough wasp females with enough eggs to do so. The failure of all wasps to translate all of their eggs into offspring clearly contributes to mutualism persistence, but the underlying causal mechanisms are unclear. We found in an undescribed Brazilian Pegoscapus wasp population that the lifetime reproductive success of lone foundresses was relatively unaffected by constraints on oviposition. The number of offspring produced by lone foundresses experimentally introduced into receptive figs was generally lower than the numbers of eggs carried, despite the fact that the wasps were able to lay all or most of their eggs. Because we excluded any effects of intraspecific competitors and parasitic non-pollinating wasps, our data suggest that some pollinators produce few offspring because some of their eggs or larvae are unviable or are victims of plant defences.

Measuring perceived brand luxury: an evaluation of the BLI scale

This paper investigates the psychometric properties of Vigneron and Johnson's Brand Luxury Index scale. The authors developed the scale using data collected from a student sample in Australia. To validate the scale, the study reported in this paper uses data collected from Taiwanese luxury consumers. The scale was initially subjected to reliability analysis yielding low α values for two of its five proposed dimensions. Exploratory and confirmatory factors analyses were subsequently performed to examine the dimensionality of brand luxury. Discriminant and convergent validity tests highlight the need for further research into the dimensionality of the construct. Although the scale represents a good initial contribution to understanding brand luxury, in view of consumers' emerging shopping patterns, further investigation is warranted to establish the psychometric properties of the scale and its equivalence across cultures.

Conceptualising and measuring the equity of online brands

Although brand equity is an important source of competitive advantage online, previous conceptualisations and measures overlook the unique characteristics of the internet that render consumers co-creators of brand value. In view of this, a threephased research programme was undertaken to identify the facets of online retail/service (ORS) brand equity and then develop and validate a scale for its measurement. ORS brand equity was found to be a second order construct with five correlated yet distinct dimensions: emotional connection, online experience, responsive service nature, trust, and fulfilment. A series of tests showed that the ensuing 12-item scale has strong psychometric properties. The implications of this research for marketing researchers and practitioners are discussed.

A data framework for measuring the energy consumption of the non-domestic building stock

The transition to a low-carbon economy urgently demands better information on the drivers of energy consumption. UK government policy has prioritized energy efficiency in the built stock as a means of carbon reduction, but the sector is historically information poor, particularly the non-domestic building stock. This paper presents the results of a pilot study that investigated whether and how property and energy consumption data might be combined for non-domestic energy analysis. These data were combined in a ‘Non-Domestic Energy Efficiency Database’ to describe the location and physical attributes of each property and its energy consumption. The aim was to support the generation of a range of energy-efficiency statistics for the industrial, commercial and institutional sectors of the non-domestic building stock, and to provide robust evidence for national energy-efficiency and carbon-reduction policy development and monitoring. The work has brought together non-domestic energy data, property data and mapping in a ‘data framework’ for the first time. The results show what is possible when these data are integrated and the associated difficulties. A data framework offers the potential to inform energy-efficiency policy formation and to support its monitoring at a level of detail not previously possible.

Green noise or green value? Measuring the price effects of environmental certification in commercial buildings

This paper investigates the price effects of environmental certification on commercial real estate assets. It is argued that there are likely to be three main drivers of price differences between certified and non-certified buildings. First, certified buildings offer a bundle of benefits to occupiers relating to business productivity, image and occupancy costs. Second, due to these occupier benefits, certified buildings can result in higher rents and lower holding costs for investors. Third, certified buildings may require a lower risk premium. Drawing upon the CoStar database of US commercial real estate assets, hedonic regression analysis is used to measure the effect of certification on both rent and price. We first estimate the rental regression for a sample of 110 LEED and 433 Energy Star as well as several thousand benchmark buildings to compare the sample to. The results suggest that, compared to buildings in the same metropolitan region, certified buildings have a rental premium and that the more highly rated that buildings are in terms of their environmental impact, the greater the rental premium. Furthermore, based on a sample of transaction prices for 292 Energy Star and 30 LEED-certified buildings, we find price premia of 10% and 31% respectively compared to non-certified buildings in the same metropolitan area