The role of undisclosed reserves in English open outcry auctions

This study considers the role that reserve prices may play in residential property auctions. In comparison to much of the previous empirical work, this study has access to undisclosed reserve prices from English auctions. Consistent with theoretical arguments in the auction literature, the results obtained illustrate that whilst higher reserve prices increase the revenue obtained for the seller, they also reduce the probability of sale. The findings also highlight the importance of auction participation, with the number of individual bidders and the number of bids significant in most specifications.

The probability of sale and price premiums in withdrawn auctioned properties

This paper examines the impact of the auction process of residential properties that whilst unsuccessful at auction sold subsequently. The empirical analysis considers both the probability of sale and the premium of the subsequent sale price over the guide price, reserve and opening bid. The findings highlight that the final achieved sale price is influenced by key price variables revealed both prior to and during the auction itself. Factors such as auction participation, the number of individual bidders and the number of bids are significant in a number of the alternative specifications.

A good enough approach to setting planning obligations

In this paper we propose an alternative model of, what is often called, land value capture in the planning system. Based on development viability models, negotiations and policy formation regarding the level of planning obligations have taken place at the local level with little clear guidance on technique, approach and method. It is argued that current approaches are regressive and fail to reflect how the ability of sites to generate planning gain can vary over time and between sites. The alternative approach suggested here attempts to rationalise rather than replace the existing practice of development viability appraisal. It is based upon the assumption that schemes with similar development values should produce similar levels of return to the landowner, developer and other stakeholders in the development as well as similar levels of planning obligations in all parts of the country. Given the high level of input uncertainty in viability modelling, a simple viability model is ‘good enough’ to quantify the maximum level of planning obligations for a given level of development value. We have argued that such an approach can deliver a more durable, equitable, simpler, consistent and cheaper method for policy formation regarding planning obligations.

Area-wide development viability appraisals: the concept of threshold land value within a UK planning context

Area-wide development viability appraisals are undertaken to determine the economic feasibility of policy targets in relation to planning obligations. Essentially, development viability appraisals consist of a series of residual valuations of hypothetical development sites across a local authority area at a particular point in time. The valuations incorporate the estimated financial implications of the proposed level of planning obligations. To determine viability the output land values are benchmarked against threshold land value and therefore the basis on which this threshold is established and the level at which it is set is critical to development viability appraisal at the policy-setting (area-wide) level. Essentially it is an estimate of the value at which a landowner would be prepared to sell. If the estimated site values are higher than the threshold land value the policy target is considered viable. This paper investigates the effectiveness of existing methods of determining threshold land value. They will be tested against the relationship between development value and costs. Modelling reveals that threshold land value that is not related to shifts in development value renders marginal sites unviable and fails to collect proportionate planning obligations from high value/low cost sites. Testing the model against national average house prices and build costs reveals the high degree of volatility in residual land values over time and underlines the importance of making threshold land value relative to the main driver of this volatility, namely development value.

Effects of target expansion on selection performance in older computer users

Point and click interactions using a mouse are an integral part of computer use for current desktop systems. Compared with younger users though, older adults experience greater difficulties performing cursor positioning tasks, and this can present limitations to using a computer easily and effectively. Target expansion is a technique for improving pointing performance, where the target dynamically grows as the cursor approaches. This has the advantage that targets conserve screen real estate in their unexpanded state, yet can still provide the benefits of a larger area to click on. This paper presents two studies of target expansion with older and younger participants, involving multidirectional point-select tasks with a computer mouse. Study 1 compares static versus expanding targets, and Study 2 compares static targets with three alternative techniques for expansion. Results show that expansion can improve times by up to 14%, and reduce error rates by up to 50%. Additionally, expanding targets are beneficial even when the expansion happens late in the movement, i.e. after the cursor has reached the expanded target area or even after it has reached the original target area. Participants’ subjective feedback on the target expansion are generally favorable, and this lends further support for the technique.

Nonlocal office investors: anchored by their markets and impaired by their distance

Nonlocal investors purchase and sell investment property in a distant metropolitan area. In this study, we identify capital value underperformance for nonlocal investors on both sides of the transaction, when they purchase and when they sell. The commercial real estate transactions data include a national sample of office property occurring in more than 100 U.S. markets. Using propensity-score matched sample to control for selection bias, we find that nonlocal investors overpay on the purchase by an estimated 13.8 % and sell at an estimated 7 % discount. These disadvantages relative to local investors expand with the geographic distance separating investor and asset. Nonlocal investors fundamentally overvalue similar assets sold to each other relative to assets transacted between locals, and are less patient as sellers. The positive bias in overpayment is directly tied to office rent differentials between the asset and investor markets.

Inside the black box: unravelling the development viability appraisal process

Over the last decade issues related to the financial viability of development have become increasingly important to the English planning system. As part of a wider shift towards the compartmentalisation of planning tasks, expert consultants are required to quantify, in an attempt to rationalise, planning decisions in terms of economic ‘viability’. Often with a particular focus on planning obligations, the results of development viability modelling have emerged as a key part of the evidence base used in site-specific negotiations and in planning policy formation. Focussing on the role of clients and other stakeholders, this paper investigates how development viability is tested in practice. It draws together literature on the role of calculative practices in policy formation, client feedback and influence in real estate appraisals and stakeholder engagement and consultation in the planning literature to critically evaluate the role of clients and other interest groups in influencing the production and use of development viability appraisal models. The paper draws upon semi-structured interviews with the main producers of development viability appraisals to conclude that, whilst appraisals have the potential to be biased by client and stakeholder interests, there are important controlling influences on potential opportunistic behaviour. One such control is local authorities’ weak understanding of development viability appraisal techniques which limits their capacity to question the outputs of appraisal models. However, this also is of concern given that viability is now a central feature of the town planning system.

Linkages between property asset returns and interest rates: evidence for the UK

This paper considers the effect of short- and long-term interest rates, and interest rate spreads upon real estate index returns in the UK. Using Johansen's vector autoregressive framework, it is found that the real estate index cointegrates with the term spread, but not with the short or long rates themselves. Granger causality tests indicate that movements in short term interest rates and the spread cause movements in the returns series. However, decomposition of the forecast error variances from VAR models indicate that changes in these variables can only explain a small proportion of the overall variability of the returns, and that the effect has fully worked through after two months. The results suggest that these financial variables could potentially be used as leading indicators for real estate markets, with corresponding implications for return predictability.

A semiotic framework for information representation of energy consumption in office buildings

Taking a perspective from a whole building lifecycle, occupier's actions could account for about 50% of energy. However occupants' activities influence building energy performance is still a blind area. Building energy performance is thought to be the result of a combination of building fabrics, building services and occupants' activities, along with their interactions. In this sense, energy consumption in built environment is regarded as a socio-technical system. In order to understand how such a system works, a range of physical, technical and social information is involved that needs to be integrated and aligned. This paper has proposed a semiotic framework to add value for Building Information Modelling, incorporating energy-related occupancy factors in a context of office buildings. Further, building information has been addressed semantically to describe a building space from the facility management perspective. Finally, the framework guides to set up building information representation system, which can help facility managers to manage buildings efficiently by improving their understanding on how office buildings are operated and used.

What Tenants Want: UK occupiers’ requirements when renting commercial property and strategic implications for landlords

Businesses need property in order to generate turnover and profits. If real estate owners are to be able to provide properties and related services that are desirable, it is crucial that they understand tenants’ requirements and preferences. Changes in the way businesses operate might well lead to an overall reduction in space requirements in all sectors. Faced with reductions in demand, landlords will find themselves in an increasingly competitive marketplace for tenants. Of the array of strategies available to landlords, what strategies should they employ for maximum effect? This paper examines what United Kingdom tenants want from commercial property (retail, industrial and office). The first part provides an analysis of data from several hundred interviews with occupiers of commercial properties owned by some of the largest UK real estate investment companies. Results are presented for each of the asset classes separately. The second part compares the findings with previous research and discusses the strategic implications for landlords.

Social innovation in local food in Japan: Choku-bai-jo markets and Teikei cooperative practices

The working paper depicts two innovative examples from Japan of the direct supply of food, which involves the development of closer producer-consumer relations, as well as closer producer-producer networks. Choku-bai-jo and Teikei networks are considered as examples of practices implicated in alternative food networks (AFNs). One example has become a quasi-public endeavour and is seen by the Japanese state as a legitimate part of rural development and is promoted in support of small producers. The other is borne from consumer concern over food quality and, despite its long-lived status, this arrangement remains marginal and with little institutional or governmental support. A model which blends the organization and aims of both examples holds potential for a more sustainable eco-economic future.

Service oriented approach to facility management using extended building information modelling

Facility management (FM), from a service oriented approach, addresses the functions and requirements of different services such as energy management, space planning and security service. Different service requires different information to meet the needs arising from the service. Object-based Building Information Modelling (BIM) is limited to support FM services; though this technology is able to generate 3D models that semantically represent facility’s information dynamically over the lifecycle of a building. This paper presents a semiotics-inspired framework to extend BIM from a service-oriented perspective. The extended BIM, which specifies FM services and required information, will be able to express building service information in the right format for the right purposes. The service oriented approach concerns pragmatic aspect of building’s information beyond semantic level. The pragmatics defines and provides context for utilisation of building’s information. Semiotics theory adopted in this paper is to address pragmatic issues of utilisation of BIM for FM services.

Investigating the level of awareness of building assessment tools in the construction industry of Botswana

Environmental building assessment tools have been developed to measure how well or poorly a building is performing, or likely to perform, against a declared set of criteria, or environmental considerations, in order to achieve sustainability principles. Knowledge of environmental building assessment tools is therefore important for successful design and construction of environmentally friendly buildings for countries. The purpose of the research is to investigate the knowledge and level of awareness of environmental building assessment tools among industry practitioners in Botswana. One hundred and seven paper-based questionnaires were delivered to industry practitioners, including architects, engineers, quantity surveyors, real estate developers and academics. Users were asked what they know about building assessment, whether they have used any building assessment tool in the past, and what they perceive as possible barriers to the implementation of environmental building assessment tools in Botswana. Sixty five were returned and statistical analysis, using IBM SPSS V19 software, was used for analysis. Almost 85 per cent of respondents indicate that they are extremely or moderately aware of environmental design. Furthermore, the results indicate that 32 per cent of respondents have gone through formal training, which suggests ‘reasonable knowledge’. This however does not correspond with the use of the tools on the ground as 69 per cent of practitioners report never to have used any environmental building assessment tool in any project. The study highlights the need to develop an assessment tool for Botswana to enhance knowledge and further improve the level of awareness of environmental issues relating to building design and construction.

Speculative bubble spillovers across regional housing markets

In this paper we determine whether speculative bubbles in one region in the United States can lead bubbles to form in others. We first apply a regime-switching model to determine whether speculative bubbles existed in the U.S. regional residential real estate markets. Our findings suggest that the housing markets in five of the nine census divisions investigated were characterized by speculative bubbles. We then examine the extent to which bubbles spill over between neighboring and more distant regions, finding that the transmission of speculative bubbles and nonfundamentals between regions is multidirectional and does not depend on contiguity or distance