Risk reduction and diversification in UK commercial property portfolios

The issue of diversification in direct real estate investment portfolios has been widely studied in academic and practitioner literature. Most work, however, has been done using either partially aggregated data or data for small samples of individual properties. This paper reports results from tests of both risk reduction and diversification that use the records of 10,000+ UK properties tracked by Investment Property Databank. It provides, for the first time, robust estimates of the diversification gains attainable given the returns, risks and cross‐correlations across the individual properties available to fund managers. The results quantify the number of assets and amount of money needed to construct both ‘balanced’ and ‘specialist’ property portfolios by direct investment. Target numbers will vary according to the objectives of investors and the degree to which tracking error is tolerated. The top‐level results are consistent with previous work, showing that a large measure of risk reduction can be achieved with portfolios of 30–50 properties, but full diversification of specific risk can only be achieved in very large portfolios. However, the paper extends previous work by demonstrating on a single, large dataset the implications of different methods of calculating risk reduction, and also by showing more disaggregated results relevant to the construction of specialist, sector‐focussed funds.

Mixed copper, silver, and gold cyanides, (MxM′1–x)CN: tailoring chain structures to influence physical properties

Binary mixed-metal variants of the one-dimensional MCN compounds (M = Cu, Ag, and Au) have been prepared and characterized using powder X-ray diffraction, vibrational spectroscopy, and total neutron diffraction. A solid solution with the AgCN structure exists in the (CuxAg1–x)CN system over the range (0 ≤ x ≤ 1). Line phases with compositions (Cu1/2Au1/2)CN, (Cu7/12Au5/12)CN, (Cu2/3Au1/3)CN, and (Ag1/2Au1/2)CN, all of which have the AuCN structure, are found in the gold-containing systems. Infrared and Raman spectroscopies show that complete ordering of the type [M–C≡N–M′–N≡C−]n occurs only in (Cu1/2Au1/2)CN and (Ag1/2Au1/2)CN. The sense of the cyanide bonding was determined by total neutron diffraction to be [Ag–NC–Au–CN−]n in (Ag1/2Au1/2)CN and [Cu–NC–Au–CN−]n in (Cu1/2Au1/2)CN. In contrast, in (Cu0.50Ag0.50)CN, metal ordering is incomplete, and strict alternation of metals does not occur. However, there is a distinct preference (85%) for the N end of the cyanide ligand to be bonded to copper and for Ag–CN–Cu links to predominate. Contrary to expectation, aurophilic bonding does not appear to be the controlling factor which leads to (Cu1/2Au1/2)CN and (Ag1/2Au1/2)CN adopting the AuCN structure. The diffuse reflectance, photoluminescence, and 1-D negative thermal expansion (NTE) behaviors of all three systems are reported and compared with those of the parent cyanide compounds. The photophysical properties are strongly influenced both by the composition of the individual chains and by how such chains pack together. The NTE behavior is also controlled by structure type: the gold-containing mixed-metal cyanides with the AuCN structure show the smallest contraction along the chain length on heating.

Evidence for insertional codemixing: mixed compounds and French nominal groups in Brussels Dutch

In this paper we analyse mixed compounds, such as legume+winkel ‘vegetable shop, greengrocery’ and winter+paletot ‘winter coat’ which contain a French and a Dutch element, and French nominal groups, such as carte d’identité ‘identity card’, and journal parlé ‘radio news’, which bilingual speakers from Brussels frequently insert into Brussels Dutch utterances. Using Muysken’s (2000) typology of bilingual speech, we claim that the mixed compounds and the nominal groups display the characteristics of insertional code-mixing. In addition, some evidence for the existence of a continuum between borrowing and code-switching can be obtained from these examples. As the multimorphemic units that are inserted into Dutch are neither single words, nor full constituents, their status in the lexicon raises interesting issues for researchers interested in the interface between syntax and the lexicon (see also Backus 2003). We try to argue that nominal groups such as carte d’identité and journal parlé are probably best seen as lexical templates or constructional idioms (Booij, 2002b). The insertion of French constructional idioms in Brussels Dutch represents an innovation in the lexical patterns that are available to speakers of this language, which is highly relevant for theories of language change.

Elevated CO2 enrichment induces a differential biomass response in a mixed species temperate forest plantation

• In a free-air CO2 enrichment study (BangorFACE) Alnus glutinosa, Betula pendula and Fagus sylvatica were planted in areas of one, two and three species mixtures (n=4). The trees were exposed to ambient or elevated CO2 (580 µmol mol-1) for four years, and aboveground growth characteristics measured. • In monoculture, the mean effect of CO2 enrichment on aboveground woody biomass was +29, +22 and +16% for A. glutinosa, F. sylvatica, and B. pendula respectively. When the same species were grown in polyculture, the response to CO2 switched to +10, +7 and 0%, for A. glutinosa, B. pendula, and F. sylvatica respectively. • In ambient atmosphere our species grown in polyculture increased aboveground woody biomass from 12.9 ± 1.4 kg m-2 to 18.9 ± 1.0 kg m-2, whereas in an elevated CO2 atmosphere aboveground woody biomass increased from 15.2 ± 0.6 kg m-2 to 20.2 ± 0.6 kg m-2. The overyielding effect of polyculture was smaller (+7%) in elevated CO2 than in an ambient atmosphere (+18%). • Our results show that the aboveground response to elevated CO2 is significantly affected by intra- and inter-specific competition, and that elevated CO2 response may be reduced in forest communities comprised of tree species with contrasting functional traits.

Insertion of a hydroxido bridge into a diphenoxido dinuclear copper(II) complex: drastic change of the magnetic property from strong antiferromagnetic to ferromagnetic and enhancement in the catecholase activity

A diphenoxido-bridged dinuclear copper(II) complex, [Cu2L2(ClO4)(2)] (1), has been synthesized using a tridentate reduced Schiff base ligand, 2-[[2-(diethylamino)-ethylamino]methyl]phenol (HL). The addition of triethylamine to the methanolic solution of this complex produced a novel triple bridged (double phenoxido and single hydroxido) dinuclear copper(II) complex, [Cu2L2(OH)]ClO4 (2). Both complexes 1 and 2 were characterized by X-ray structural analyses, variable-temperature magnetic susceptibility measurements, and spectroscopic methods. In 1, the two phenoxido bridges are equatorial-equatorial and the species shows strong antiferromagnetic coupling with J = -615.6(6.1) cm(-1). The inclusion of the equatorial-equatorial hydroxido bridge in 2 changes the Cu center dot center dot center dot Cu distance from 3.018 angstrom (avg.) to 2.798 angstrom (avg.), the positions of the phenoxido bridges to axial-equatorial, and the magnetic coupling to ferromagnetic with J = 50.1(1.4) cm(-1). Using 3,5-di-tert-butylcatechol as the substrate, the catecholase activity of the complexes has been studied in a methanol solution; compound 2 shows higher catecholase activity (k(cat) = 233.4 h(-1)) than compound 1 (k(cat) = 93.6 h(-1)). Both complexes generate identical species in solution, and they are interconvertible simply by changing the pH of their solutions. The higher catecholase activity of 2 seems to be due to the presence of the OH group, which increases the pH of its solution.

Fenced in: Common property struggles in the management of communal rangelands in central Eastern Cape Province, South Africa

This paper takes as its starting point the assertion that current rangeland management in the central Eastern Cape Province (former Ciskei) of South Africa, is characterised primarily by an ‘open access’ approach. Empirical material drawn from three case-study communities in the region is used to examine the main barriers to management of rangeland as a ‘commons’. The general inability to define and enforce rights to particular grazing resourses in the face of competing claims from ‘outsiders’, as well as inadequate local institutions responsible for rangeland management are highlighted as being of key importance. These are often exacerbated by lack of available grazing land, diffuse user groups and local political and ethnic divisions. Many of these problems have a strong legacy in historical apartheid policies such as forced resettlement and betterment planning. On this basis it is argued that policy should focus on facilitating the emergence of effective, local institutions for rangeland management. Given the limited grazing available to many communities in the region, a critical aspect of this will be finding ways to legitimise current patterns of extensive resource use, which traverse existing ‘community’ boundaries. However, this runs counter to recent legislation, which strongly links community management with legal ownership of land within strict boundaries often defined through fencing. Finding ways to overcome this apparent disjuncture between theory and policy will be vital for the effective management of common pool grazing resources in the region.

The distribution of London residential property prices and the role of spatial lock-in

Much of mainstream economic analysis assumes that markets adjust smoothly, through prices, to changes in economic conditions. However, this is not necessarily the case for local housing markets, whose spatial structures may exhibit persistence, so that conditions may not be those most suited to the requirements of modern-day living. Persistence can arise from the existence of transaction costs. The paper tests the proposition that housing markets in Inner London exhibit a degree of path dependence, through the construction of a three-equation model, and examines the impact of variables constructed for the 19th and early 20th centuries on modern house prices. These include 19th-century social structures, slum clearance programmes and the 1908 underground network. Each is found to be significant. The tests require the construction of novel historical datasets, which are also described in the paper.

On the attribution of stratospheric ozone and temperature changes to changes in ozone-depleting substances and well-mixed greenhouse gases

The vertical profile of global-mean stratospheric temperature changes has traditionally represented an important diagnostic for the attribution of the cooling effects of stratospheric ozone depletion and CO2 increases. However, CO2-induced cooling alters ozone abundance by perturbing ozone chemistry, thereby coupling the stratospheric ozone and temperature responses to changes in CO2 and ozone-depleting substances (ODSs). Here we untangle the ozone-temperature coupling and show that the attribution of global-mean stratospheric temperature changes to CO2 and ODS changes (which are the true anthropogenic forcing agents) can be quite different from the traditional attribution to CO2 and ozone changes. The significance of these effects is quantified empirically using simulations from a three-dimensional chemistry-climate model. The results confirm the essential validity of the traditional approach in attributing changes during the past period of rapid ODS increases, although we find that about 10% of the upper stratospheric ozone decrease from ODS increases over the period 1975–1995 was offset by the increase in CO2, and the CO2-induced cooling in the upper stratosphere has been somewhat overestimated. When considering ozone recovery, however, the ozone-temperature coupling is a first-order effect; fully 2/5 of the upper stratospheric ozone increase projected to occur from 2010–2040 is attributable to CO2 increases. Thus, it has now become necessary to base attribution of global-mean stratospheric temperature changes on CO2 and ODS changes rather than on CO2 and ozone changes.

Dispersal of soil-dwelling clover root weevil (Sitona lepidus Gyllenhal, Coleoptera: Curculionidae) larvae in mixed plant communities

Insect pests that have a root-feeding larval stage often cause the most sustained damage to plants because their attrition remains largely unseen, preventing early diagnosis and treatment. Characterising movement and dispersal patterns of subterranean insects is inherently difficult due to the difficulty in observing their behaviour. Our understanding of dispersal and movement patterns of soil-dwelling insects is therefore limited compared to above ground insect pests and tends to focus on vertical movements within the soil profile or assessments of coarse movement patterns taken from soil core measurements in the field. The objective of this study was to assess how the dispersal behaviour of the clover root weevil (CRW), Sitona lepidus larvae was affected by differing proportions of host (clover) and non-host (grass) plants under different soil water contents (SWC). This was undertaken in experimental mini-swards that allowed us to control plant community structure and soil water content. CRW larval survival was not affected either by white clover content or planting pattern or SWC in either experiment; however, lower clover composition in the sward resulted in CRW larvae dispersing further from where they hatched. Because survival was the same regardless of clover density, the proportion of infested plants was highest in sward boxes with the fewest clover plants (i.e. the low host plant density). Thus, there is potential for clover plants over a larger area to be colonised when the clover content of the sward is low.

Property loss potentials for European midlatitude storms in a changing climate

Winter storms of the midlatitudes are an important factor for property losses caused by natural hazards over Europe. The storm series in early 1990 and late 1999 led to enormous economic damages and insured claims. Although significant trends in North Atlantic/European storm activity have not been identified for the last few decades, recent studies provide evidence that under anthropogenic climate change the number of extreme storms could increase, whereas the total number of cyclones may be slightly reduced. In this study, loss potentials derived from an ensemble of climate models using a simple storm damage model under climate change conditions are shown. For the United Kingdom and Germany ensemble-mean storm-related losses are found to increase by up to 37%. Furthermore, the interannual variability of extreme events will increase leading to a higher risk of extreme storm activity and related losses.

On the group-velocity property for wave-activity conservation laws

The density and the flux of wave-activity conservation laws are generally required to satisfy the group-velocity property: under the WKB approximation (i.e., for nearly monochromatic small-amplitude waves in a slowly varying medium), the flux divided by the density equals the group velocity. It is shown that this property is automatically satisfied if, under the WKB approximation, the only source of rapid variations in the density and the flux lies in the wave phase. A particular form of the density, based on a self-adjoint operator, is proposed as a systematic choice for a density verifying this condition.