Future shock or e-hype?: the impact of online shopping on UK retail property

This research examines the impact of ecommerce on sales and rental values and on the future space and ownership/leasing requirements of UK retailers for 2000-2005. The independent study, commissioned by BCSC (and funded by BCSC Educational Trust with support from the RICS Education Trust), included a major postal survey, follow-up interviews, a retail focus group, and shopper survey and case study of Cyberton, a town in the South East of England. The study was conducted by the Research Department of The College of Estate Management between June and December 2000.

A comparative analysis of the accuracy and uncertainty in real estate and macroeconomic forecasts

We compare and contrast the accuracy and uncertainty in forecasts of rents with those for a variety of macroeconomic series. The results show that in general forecasters tend to be marginally more accurate in the case of macro-economic series than with rents. In common across all of the series, forecasts tend to be smoothed with forecasters under-estimating performance during economic booms, and vice-versa in recessions We find that property forecasts are affected by economic uncertainty, as measured by disagreement across the macro-forecasters. Increased uncertainty leads to increased dispersion in the rental forecasts and a reduction in forecast accuracy.

Rationality and momentum in real estate investment forecasts

This study examines the rationality and momentum in forecasts for rental, capital value and total returns for the real estate investment market in the United Kingdom. In order to investigate if forecasters are affected by the general economic conditions present at the time of forecast we incorporate into the analysis Gross Domestic Product(GDP) and the Default Spread (DS). The empirical findings show high levels of momentum in the forecasts, with highly persistent forecast errors. The results also indicate that forecasters are affected by adverse conditions. This is consistent with the finding that they tend to exhibit greater forecast error when the property market is underperforming and vice-versa.

On the predictive content of leading indicators: the case of U.S. real estate markets

This paper employs a probit and a Markov switching model using information from the Conference Board Leading Indicator and other predictor variables to forecast the signs of future rental growth in four key U.S. commercial rent series. We find that both approaches have considerable power to predict changes in the direction of commercial rents up to two years ahead, exhibiting strong improvements over a naïve model, especially for the warehouse and apartment sectors. We find that while the Markov switching model appears to be more successful, it lags behind actual turnarounds in market outcomes whereas the probit is able to detect whether rental growth will be positive or negative several quarters ahead.

Energy performance ratings and house prices in Wales: an empirical study

This paper investigates the price effect of EPC ratings on the residential dwelling prices in Wales. It examines the capitalisation of energy efficiency ratings into house prices using two approaches. The first adopts a cross-sectional framework to investigate the effect of EPC band (and EPC rating) on a large sample of dwelling transactions. The second approach is based on a repeat-sales methodology to examine the impact of EPC band and rating on house price appreciation. The results show that, controlling for other price influencing dwelling characteristics, EPC band does affect house prices. This observed influence of EPC on price may not be a result of energy performance alone; the effect may be due to non-energy related benefits associated with certain types, specifications and ages of dwellings or there may be unobserved quality differences unrelated to energy performance such as better quality fittings and materials. An analysis of the private rental segment reveals that, in contrast to the general market, low-EPC rated properties were not traded at a significant discount, suggesting different implicit prices of potential energy savings for landlords and owner-occupiers.

Assessing the accuracy and dispersion of real estate investment forecasts

Existing empirical evidence has frequently observed that professional forecasters are conservative and display herding behaviour. Whilst a large number of papers have considered equities as well as macroeconomic series, few have considered the accuracy of forecasts in alternative asset classes such as real estate. We consider the accuracy of forecasts for the UK commercial real estate market over the period 1999-2011. The results illustrate that forecasters display a tendency to under-estimate growth rates during strong market conditions and over-estimate when the market is performing poorly. This conservatism not only results in smoothed estimates but also implies that forecasters display herding behaviour. There is also a marked difference in the relative accuracy of capital and total returns versus rental figures. Whilst rental growth forecasts are relatively accurate, considerable inaccuracy is observed with respect to capital value and total returns.

Determinants of satisfaction amongst tenants of UK Offices

Purpose – Corporate Occupiers require offices and services which meet their business needs, whilst landlords must attract and retain occupiers in order to maximise occupancy and rental income. The purpose of this research is to help landlords and corporate occupiers understand each other better, in order to achieve a mutually beneficial relationship. Design/methodology/approach - This paper analyses interviews with 1334 office tenants in the UK, conducted over an 11-year period, to investigate determinants of occupier satisfaction, loyalty and advocacy. Structural equation modelling and regressions are performed using respondents’ ratings of satisfaction with many aspects of occupancy as explanatory variables. The dependent variables include satisfaction with property management, value for money, overall occupier satisfaction, lease renewal intentions and occupiers’ willingness to recommend their landlord. Findings - The aspects with most impact on occupiers’ satisfaction are the office building itself, its location and amenities, and also communication with their property manager, a belief that their business needs are understood and the property manager’s responsiveness to occupiers’ requests. Occupiers’ loyalty depends mainly upon feeling that their rent and service charges provide value for money, an amicable leasing process, the professionalism of their property manager and the Corporate Social Responsibility of the Landlord. ‘Empathy’ is crucial to occupiers’ willingness to recommend their landlord, and clear documentation and efficient legal process improve occupiers’ perception of receiving ‘Value for Money’. Research Limitations - The sample is skewed towards occupiers of prime office buildings in the UK, owned by landlords who care sufficiently about their tenants to commission studies into occupier satisfaction. Practical implications - This research should help to improve the landlord – tenant relationship, benefitting the businesses that rent property and helping building managers understand where to focus their efforts to achieve maximum effect on occupier satisfaction, loyalty and advocacy. Originality/value - There has been little academic research into the determinants of satisfaction of occupiers of UK commercial property. This large-scale study enables the most influential factors to be identified and prioritised.

Energy performance ratings and house prices in Wales: an empirical study

This paper investigates the effect of Energy Performance Certificate (EPC) ratings on residential prices in Wales. Drawing on a sample of approximately 192,000 transactions, the capitalisation of energy efficiency ratings into house prices is investigated using two approaches. The first adopts a cross-sectional framework to investigate the effect of EPC rating on price. The second approach applies a repeat-sales methodology to investigate the impact of EPC rating on house price appreciation. Statistically significant positive price premiums are estimated for dwellings in EPC bands A/B (12.8%) and C (3.5%) compared to houses in band D. For dwellings in band E (−3.6%) and F (−6.5%) there are statistically significant discounts. Such effects may not be the result of energy performance alone. In addition to energy cost differences, the price effect may be due to additional benefits of energy efficient features. An analysis of the private rental segment reveals that, in contrast to the general market, low-EPC rated dwellings were not traded at a significant discount. This suggests different implicit prices of potential energy savings for landlords and owner-occupiers.

Housing provision in 21st century Europe

European housing markets exhibited considerable volatility so far in the 21st century while affordability worsened for many. Boom-bust has had greater housing impacts than any specific housing policy, which illustrates the difficulty in policy terms of seeing housing in isolation and the central significance of interlinked relationships between housing, the economy and financial markets. Europe historically invented a powerful set of interventionist tools to alter housing circumstances but, as the overview of rental markets here indicates, today they have mixed success. Examples of what to avoid in policy are at least as common as exemplars.

Detecting defects in the UK new-build housing sector: a learning perspective

Rapid growth in the production of new homes in the UK is putting build quality under pressure as evidenced by an increase in the number of defects. Housing associations (HAs) contribute approximately 20% of the UK’s new housing supply. HAs are currently experiencing central government funding cuts and rental revenue reductions. As part of HAs’ quest to ramp up supply despite tight budget conditions, they are reviewing how they learn from defects. Learning from defects is argued as a means of reducing the persistent defect problem within the UK housebuilding industry, yet how HAs learn from defects is under-researched. The aim of this research is to better understand how HAs, in practice, learn from past defects to reduce the prevalence of defects in future new homes. The theoretical lens for this research is organizational learning. The results drawn from 12 HA case studies indicate that effective organizational learning has the potential to reduce defects within the housing sector. The results further identify that HAs are restricting their learning to focus primarily on reducing defects through product and system adaptations. Focusing on product and system adaptations alone suppresses HAs’ abilities to reduce defects in the future.

Caravan parks as a provider in the affordable housing market

Caravan parks in Australian capital cities have provided a source of housing at the lower end of the market for many years. This includes opportunities for both private rental and home ownership. However, emerging trends in the property market have threatened the viability of caravan parks. In order to maintain or increase income levels, some caravan parks have focused on more profitable short-term tourist opportunities rather than traditional long-term housing. While the closure and conversion of caravan parks raise crucial questions for Australian social and housing policy, there are also implications for the broader property market. This paper examines the changing role of the operation of caravan parks, with the emphasis placed on their economic feasibility. The research is based on a survey of 30 caravan park operators in Queensland, Australia. The factors influencing caravan parks are identified, and suggestions to address the changing role of caravan parks as a provider in the affordable housing market are canvassed.

The relationship between sustainability and the value of office buildings

There is an increasing body of evidence to suggest that the development of sustainability in office buildings and the acceptance of these buildings in the broader property market is increasing. However a gap still remains between the value of sustainability and the value of the building from an International Valuation Standards Committee (IVSC) definition of market value. Current literature is limited in the investigation of the impact of sustainable criteria on value component when undertaking a valuation of a commercial office building. Whilst substantial advances have been made in sustainable design and construction aspects, as well as reducing implementation costs and enhancing benefits associated with sustainability, there appears to be inherent barriers in adopting sustainability in the valuation process for the property industry.

This paper examines the limited previous research into the elements of sustainable criteria that impact upon property value, and in turn should be reflected in traditional valuation methods. The immaturity of the property market for sustainable building is such that current valuation methods do not appear to have significant evidential proof of increased property value through sales or lease evidence for sustainable buildings. Furthermore, this lack of market evidence makes it inherently difficult for valuers to assess the real market value of sustainable buildings through current valuation methodology. In other words, the level of risk associated with incorporating different levels of sustainability into office buildings appears difficult to measure using a market value perspective in today’s property market. Accordingly this paper examines current research that has been undertaken to identify particular sustainable criteria that potentially affects the value of a sustainable building. For example, previous research suggests that sustainable criteria impact upon the valuation equation through rental growth, depreciation, risk premium and cash flow. This paper also examines how other studies have viewed the impact of sustainable criteria and how they are weighted within the valuation equation. The discussion provides an insight into the rapidly evolving area of sustainability and office buildings with emphasis placed on the valuation process that seeks to assess a hypothetical purchaser’s perspective of this relationship.

Ethnography of housing : a conclusion

This paper is the final report of a research project spanning three years, exploring three field locations and capturing the stories of forty (plus) housing workers. Using an ethnographic research approach, this paper provides an account of how housing workers use language and stories to understand and make sense of their challenging and changing work. First hand accounts ('stories') about every day housing work frame the data in this paper, explaining how housing workers in Victoria have experienced and made sense of the shift from public housing as 'affordable housing for the working poor' to 'housing of last resort for the most vulnerable and needy members of the community'. Using a number of composite stories, this paper provides the reader with a glimpse into the work of public housing staff, transporting the leader from the relatively static world of policy and procedure to the more colorful world of tenants with 'high and complex' needs, 'wicked' problems, weary staff and the daily reality of organisational change.

A unique feature of this research is the comparison of how different workers use stories to build a range of 'socially constructed realities' around the housing work and its wicked problems. This paper compares and contrasts the socially constructed realities of frontline staff with the corresponding social realities of the managers at head office (and vice versa). This 'same problem, different perspective' approach allows the reader to better understand how the same problem is understood and approached in different ways, depending on the individual's organisational role, responsibly and authority. Using stories about 'working with problem tenants', 'collecting rental arrears from the poor and marginalised', 'maintaining old, neglected properties' and 'coping with organisational change', this paper illustrates how the shifting (and sometimes contradictory) construction of housing problems has meant that the organisation has long struggled to devise and implement sustainable remedies to these problems.

The following pages describe how the problems identified in the Housing Office Review (and experienced in the daily work of the 'modern day' housing worker) are simply a contemporary manifestation of 'age old public housing issues'. This paper describes and explains how housing staff have long used narrative to make sense of their often difficult work and ultimately, how they understand and experience a major process of operational policy change associated with the shift from 'public' housing to 'welfare' housing.

Ethnography of housing

This paper is the final report of a research project spanning three years, exploring three field locations and capturing the stories of forty (plus) housing workers. Using an ethnographic research approach, this paper provides an account of how housing workers use language and stories to make sense of their challenging and changing work. First hand accounts ('stories') about everyday housing work frame the data in this paper, explaining how housing workers in Victoria have experienced and made sense of the shift from public housing as 'affordable housing for the working poor' to 'housing of last resort for the most vulnerable and needy members of the community'. Using a number of composite stories, this paper provides the reader with a glimpse into the work of public housing staff, transporting the reader from the relativley static world of policy and procedure to the more colourful world of tenants with ' high and complex' needs, 'wicked' problems, weary staff and the daily reality of organisational change.

A unique feature of this research is the comparison of how different workers use their stories to build a range of 'socially constructed realities' around the housing work and its wicked problems. With a few exceptions (Saugeres, 1999, Howe, 1998, Clapham et al., 2000, Darcy, 1999) the voices of frontline staff are largley absent from contemporary housing literature. In this paper, I use the stories of frontline staff to build a comparative case study of the socially constructed realities for frontline staff and the corresponding realities of the managers at head office (and vice versa). This 'same problem, different perspective' approach allows the reader to better understand how the same problem is understood and approached in different ways, depending on the individual's organisational role, responsibility and authority. Using stories about 'working with problem tenants', 'collecting rental arrears from the poor and marginalised', maintaining old, neglected properties' and 'coping with organisational change', this paper illustrates how the shifting (and sometimes contradictory) construction of housing problems has meant that the organisation has long struggled to devise and implement sustainable remedies to these problems.

The following pages describe how the problem identified in the Housing Office Review (and experienced in the daily work of the 'modern day' housing worker) are simply a contemporary manifestation of  'age old public housing issues'. This paper describes and explains how housing staff have long used narrative to make sense of their often difficult work and ultimately, how they understand and experience a major process of operational policy change associated with the shift from 'public' housing to 'welfare' housing.

Investment performance within urban regeneration locations

Purpose – Property performance indices have invariably focused upon prime markets with a variety of approaches used to measure investment returns. However, there is relatively little knowledge regarding the investment performance of property in regeneration areas. Indeed, there is a perception that such locations carry increased risk and that the returns achieved may not be sufficient to offset the added risk. The main objective of this paper, therefore, is to construct regeneration property performance indicators consistent with the CBRE rent index and average yield monitor.

Design/methodology/approach – Local market experts were asked to estimate rents and yields for hypothetical standardised offerings for a range of regeneration locations throughout the UK, covering the period 1995 to 2002.

Findings – The results show that rental growth was similar in regeneration locations compared to the prime market. However, the analysis highlights a major yield shift for property in regeneration areas in the short to medium term. The downward pressure in yields would suggest that once a regeneration area becomes established and rental growth emerges, investor interest is stimulated resulting in increased competition and a shortening of yields.

Originality/value – The significance of this research is the quantification of property investment performance from regeneration areas that previously has not been available to investment institutions and decision makers. From a policy perspective this analysis is of relevance in confirming the maturing of locations that have received high levels of public sector support and indicating the effectiveness of regeneration policy mechanisms in creating sustainable urban environments capable of meeting private sector investment goals.