Cycology – what has been learnt from previous real estate cycles?

2017 ◽  
Vol 35 (4) ◽  
pp. 427-435
Author(s):  
Simon Durkin
Keyword(s):  
Real Estate ◽  
Property Market ◽  
Content Type ◽  
Market Sentiment ◽  
Lessons Learnt ◽  
Quantitative Property ◽  
The Future ◽  
Future Challenges ◽  
Current Cycle ◽  
Industry Professionals

Purpose The purpose of this paper is to look at the lessons learnt from the previous real estate cycles based on a sample of investors, occupiers and academics and seek to understand the practical challenges the industry faces in the current cycle. Design/methodology/approach The paper summarises the results of qualitative research and interviews conducted and analysed by BNP Paribas Real Estate and Ipsos MORI. Findings The paper considers the crisis of 2008, its impact on performance, lessons learnt by the industry as a result and the future challenges. Whilst the industry felt well prepared to withstand future uncertainty and change, there was concern that subsequent generations of industry professionals will not be well equipped to deal with the pace and magnitude of change. Practical implications This is a practical study that seeks to place a greater emphasis on the drivers of market sentiment rather than focussing on quantitative forecasts. Originality/value There is much attention given to quantitative property market forecasts; however, there seems to be little appreciation of the need to evolve our process in today’s fast paced, structurally changing market which will behave differently to how it has in the past. Economic forecasts have received much criticism recently and these provide the basis for property market forecasts. The consideration of sentiment and the qualitative aspect of the future drivers of performance have never been so critical.

Artificial intelligence, news sentiment, and property market liquidity

2019 ◽  
Vol 38 (4) ◽  
pp. 309-325
Author(s):  
Johannes Braun ◽  
Jochen Hausler ◽  
Wolfgang Schäfers
Keyword(s):  
Artificial Intelligence ◽  
Real Estate ◽  
Real Estate Market ◽  
Global Market ◽  
Price Impact ◽  
Market Liquidity ◽  
Property Market ◽  
Content Type ◽  
Market Sentiment ◽  
Distributed Lag

Purpose The purpose of this paper is to use a text-based sentiment indicator to explain variations in direct property market liquidity in the USA. Design/methodology/approach By means of an artificial neural network, market sentiment is extracted from 66,070 US real estate market news articles from the S&P Global Market Intelligence database. For training of the network, a distant supervision approach utilizing 17,822 labeled investment ideas from the crowd-sourced investment advisory platform Seeking Alpha is applied. Findings According to the results of autoregressive distributed lag models including contemporary and lagged sentiment as independent variables, the derived textual sentiment indicator is not only significantly linked to the depth and resilience dimensions of market liquidity (proxied by Amihud’s (2002) price impact measure), but also to the breadth dimension (proxied by transaction volume). Practical implications These results suggest an intertemporal effect of sentiment on liquidity for the direct property market. Market participants should account for this effect in terms of their investment decisions, and also when assessing and pricing liquidity risk. Originality/value This paper not only extends the literature on text-based sentiment indicators in real estate, but is also the first to apply artificial intelligence for sentiment extraction from news articles in a market liquidity setting.

Educators, professional bodies and the future of the valuation profession

2018 ◽  
Vol 36 (4) ◽  
pp. 389-399
Author(s):  
Sara Wilkinson ◽  
Dulani Halvitigala ◽  
Hera Antoniades
Keyword(s):  
Focus Group ◽  
Work Experience ◽  
Continuing Professional Development ◽  
Original Research ◽  
Content Type ◽  
Knowledge And Skills ◽  
The Future ◽  
Future Challenges ◽  
Professional Body

Purpose Valuers face significant challenges as valuation becomes automated and the role evolves from economic analysis to data handling and processing. The purpose of this paper is to identify new knowledge and skills Valuers will need in the future and the role of professional bodies and educators in meeting future challenges in Australia, although the issues are considered global. Design/methodology/approach This qualitative research sought a deeper understanding of the issues, threats, challenges, opportunities, new areas of practice and knowledge that Valuers were experiencing with a view to identifying the role of professional bodies, industry and educators to meet the challenges. A focus group approach was adopted to collect data from practitioners in Sydney and Melbourne. Findings The roles of the professional body the Australian Property Institute, industry/employers and educators to meet these future challenges were identified. Changes are required to degree programme content in respect of digital technologies and statistical knowledge and skills. Continuing professional development programmes are required to address knowledge and skills gaps in existing practitioners. Research limitations/implications In this study, key limitations were that focus group participants were from Melbourne and Sydney only, and the focus is NSW and Victoria centric, although many participants have international work experience. Overall there was under representation of rural Valuers, of small valuation firms, of young, recently joined or qualified Valuers and females. Originality/value This is original research and highlights some real threats, issues and challenges facing the Australian Valuers. It complements work undertaken by legal and accounting professional bodies who perceive change and uncertainty affecting membership and services. To address and where, appropriate, embrace the changes that are coming and those already here, a manifesto for action for educators and the professional body is established.

DEMATEL method of analysing the factors influencing the decision to adopt virtual reality technology by real estate firms in Lagos property market

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ayodele Samuel Adegoke ◽  
Timothy Tunde Oladokun ◽  
Timothy Oluwafemi Ayodele ◽  
Samson Efuwape Agbato ◽  
Ahmed Ademola Jinadu
Keyword(s):  
Virtual Reality ◽  
Real Estate ◽  
Social Influence ◽  
Property Market ◽  
Content Type ◽  
Performance Expectancy ◽  
Factors Influencing ◽  
Effort Expectancy ◽  
Facilitating Conditions ◽  
Estate Agency

PurposeThe study analysed the factors influencing real estate firms' (REFs) decision to adopt virtual reality (VR) technology using the Decision-Making Trial and Evaluation Laboratory (DEMATEL) method. This was done to enhance the practice of real estate agency in Nigeria.Design/methodology/approachData were elicited from eight real estate experts. These experts were heads of the agency department of firms that had been in existence for a minimum of five years in the Lagos property market. The data analysed in this study were collected with the aid of a questionnaire.FindingsThe result revealed that use intention was influenced by performance expectancy, effort expectancy, social influence, facilitating conditions, hedonic motivation, price value and UB. Also, facilitating conditions, habit and use intention did not influence use behaviour. Overall, six constructs, which include price value (Ri − Cj value = 0.1284), use behaviour (Ri − Cj value = 0.0666), social influence (Ri − Cj value = 0.0583), facilitating conditions (Ri − Cj value = 0.0323), performance expectancy (Ri − Cj value = 0.0196) and effort expectancy (Ri − Cj value = 0.0116), were significant predictors of the factors influencing the decision of REFs to adopt VR. Of these constructs, the Ri − Cj values indicated that price value had the highest causative influence.Practical implicationsThe result of this study will bring REFs to the consciousness of the factors that could affect their adoption of VR technology. This study will also assist the Nigerian Institution of Estate Surveyors and Valuers in appropriately enlightening REFs on the integration of VR technology into the agency practice especially at this time when all health protocols and guidelines need to be observed to help flatten the curve of the Covid-19 pandemic.Originality/valueThis study is the first to have an insight into the analysis of the factors influencing REFs' decision to adopt VR technology using the DEMATEL method.

Real estate risk, yield modelling and market sentiment: the impact on pricing in European office markets

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tony McGough ◽  
Jim Berry
Keyword(s):  
Real Estate ◽  
International Capital ◽  
Content Type ◽  
International Capital Markets ◽  
Real Estate Markets ◽  
Market Sentiment ◽  
Office Markets ◽  
Risk Pricing ◽  
Changes In Risk ◽  
The Impact

PurposeThe financial and economic turmoil that resulted from the Global Financial Crisis (GFC), included a marked increase in the volatility in real estate markets. Property asset prices were impacted by the real economy and market sentiment, particularly concerning the determination of risk. In an economic downturn, the perception of investment risk becomes increasingly important relative to overall total returns, and thus impacts on yields and performance of assets. In a recovery phase, and particularly within an environment of historically low government bonds, risk and return compete for importance. The aim of this paper is to assess the interrelationships and impacts on pricing between real estate risk, yield modelling outcomes and market sentiment in selective European city office markets.Design/methodology/approachThis paper specifically considers the modelling of commercial property pricing in relation to the appetite for risk in the financial markets. The paper expands on previous work by determining a specific measure of risk pricing in relationship to changing financial market sentiment. The methodology underpinning the research specifically examines the scope for using national and international risk pricing within specific real estate markets in Europe.FindingsThis paper addresses whether there is a difference between the impact of risk on the pricing of real estate in international versus regional cities in Europe. The analysis, therefore, determines which city centre office markets in Europe have been most impacted by globalisation including the magnitude on real estate prices and market volatility. The outcome of the paper provides important insights into how changes in risk preferences in the international capital markets have driven and continues to drive yield movements under different market conditions.Research limitations/implicationsThe paper considers the driving forces which have led to the volatile movements of yields, emanating from the GFC.Practical implicationsThis paper considers the property market effects on pricing of commercial real estate and the drivers in selected European cities.Originality/valueThe outcome of the paper provides important insights into how changes in risk preferences in the international capital markets have driven and continue to drive the yield movements in different real estate markets in Europe.

A new model for Auckland commercial property yields

2019 ◽  
Vol 37 (1) ◽  
pp. 42-57 ◽  
Author(s):  
Moshe Szweizer
Keyword(s):  
Local Property ◽  
International Investment ◽  
Field Application ◽  
Property Market ◽  
Investment Activity ◽  
Content Type ◽  
Commercial Property ◽  
High Data ◽  
Investment Volume ◽  
Current Cycle

PurposeThe purpose of this paper is to extend the studies of commercial property yields by providing a cross-field approach through the implementation of methods used in physics.Design/methodology/approachBased on the equations used to describe real gases in physics, the commercial property yields are expressed through a model, as a product of two terms. The first term estimates the influence of the income change and investment on yields. The second estimates the yield variation as a function of property size. Additionally, the model combines the macroeconomic and microeconomic components influencing yield adjustment. Calculation of each component involves procedures developed in physics, with the investment volume being linked to the amount of gas and the microeconomic yield being linked to the gas compressibility.FindingsThe model was applied to the Auckland office and industrial markets, both to the historic and current cycle. At the macro-level, it was found that the use of accumulation of investment over a relevant cycle, results in a high data to model correlation. When modelling the yields at the micro-level, a relationship between the outlying properties and the yield softening was observed.Practical implicationsThe paper provides an enhanced modelling power through association of the cyclic and investment activity with the yield change. Moreover, the model may be used to decouple the local and the international investment components and the extent of their influence on the local property market. Furthermore, it may be used to estimate the influence of the property size on the yield.Originality/valueThis research provides a new cross-field application of modelling techniques and enhances the understanding of factors influencing yield adjustments.

scholarly journals Modelling the drivers of the UK multi-let industrial property market: an exploratory study

2020 ◽  
Vol 38 (4) ◽  
pp. 585-596
Author(s):  
David Higgins ◽  
Tsvetomira Vincent ◽  
Peter Wood
Keyword(s):  
Real Estate ◽  
Hedonic Pricing ◽  
Valuable Insight ◽  
Pricing Model ◽  
Property Market ◽  
Industrial Property ◽  
Content Type ◽  
Hedonic Pricing Model ◽  
Significant Difference ◽  
Asset Class

PurposeMulti-let industrial (MLI) estates are an emerging £15 billion UK real estate asset class that can offer attractive returns, a diversified income base, constrained supply and extensive management opportunities to add value within an operational platform. This investment appeal is supported by the evolving MLI occupier market with the growth of small to medium enterprises (SME) requiring modern urban business space driven in part by technology advances offering new streams of supply chain connectivity between businesses and potential clients at a local level.Design/methodology/approachTo understand more about MLI properties, this study utilises a hedonic pricing model to quantify property values as a function of defined variables. The dataset used for this research is a sample portfolio of 26 multi-let industrial properties. The dataset was analysed alongside eleven physical, financial and locational factors. Interestingly, the hedonic pricing model results showed that only four characteristics are value-affecting across the selected properties: namely (1) Granularity of the property income, (2) Distance from the nearest motorway, (3) Distance to the nearest town centre and (4) Gross internal floor area. A chi–test confirmed that there was no significant difference between the modelled values and the supplied property valuations.FindingsThis preliminary study offers valuable insight into MLI property market drivers and could easily form a simple decision-making tool to examine potential MLI opportunities in this developing real estate asset class.Originality/valueIn detailing these key MLI property features, current research is limited and focused primarily on market commentary. New knowledge on the MLI property market can provide a platform creating interesting opportunities for fund managers with an intensive management engagement strategy.

scholarly journals Digital Rovaniemi: contemporary and future arctic tourist experiences

2019 ◽  
Vol 6 (1) ◽  
pp. 6-23 ◽  
Author(s):  
Alix Varnajot
Keyword(s):  
Social Network ◽  
New Technologies ◽  
Weather Conditions ◽  
The Arctic ◽  
Arctic Circle ◽  
Content Type ◽  
Close Proximity ◽  
The Future ◽  
Future Challenges ◽  
Interpretive Understanding

Purpose The purpose of this paper is to investigate tourists’ representations of the Arctic through the lens of the photo-sharing social network Instagram. The study focuses on the particular tourist experience of crossing the Arctic Circle in Rovaniemi, Finland, as in tourism, it represents the “official” entry to the Arctic. The study also aims at drawing assumptions about the future experiences of crossing the Arctic Circle, with the development of new technologies such as augmented and virtual realities. Design/methodology/approach Data were gathered with netnography methodologies on the Instagram social network. The first stage was the observational part and consisted of “lurking” at specific hashtags and locations, both referring to the Arctic Circle in Rovaniemi. Data were gathered in December 2018 and consisted of images and descriptions of Instagram posts published by users between June 1, 2018 and December 31, 2018, so data collection encompassed both summer and winter seasons. The second stage was the analysis part and involved interpretive understanding, and especially phenomenological sociology. Findings Results show that three dominant representations of the Arctic emerge when tourists cross the Arctic Circle. The region is either seen as a frozen fairytale wonderland due to the close proximity of the Christmas industry, as a far and northern destination participating in the realization of the self, and as a territory where summer weather conditions are not necessarily synonymous with the Arctic. In addition, the study acknowledges the future challenges of conceptualizing “Arctic tourism” due to the development of virtual reality technologies that could provide immersive Arctic experiences outside the region. Originality/value The paper investigates connections between social media studies and tourist experiences in the Arctic context. It also questions the future of Arctic tourist experiences with the development of new technologies enhancing experiences and, thus, potentially threatening the exceptionalism of the Arctic and what makes the region a unique tourism destination.

Does strategic leadership development feature in managers’ responses to future HRM challenges?

2017 ◽  
Vol 38 (4) ◽  
pp. 576-587 ◽  
Author(s):  
Riitta Viitala ◽  
Susanna Kultalahti ◽  
Hilpi Kangas
Keyword(s):  
Leadership Development ◽  
Common View ◽  
Content Type ◽  
Top Managers ◽  
The Future ◽  
Future Challenges ◽  
Strategic Role ◽  
Social Media Platforms ◽  
Hr Managers

Purpose Recent academic discussion depicts leadership development (LD) as an important tool for supporting the implementation of an organization’s strategy, maintaining ongoing development of the organization, and building capabilities that are essential for the future. However, the role of LD in reality depends to a considerable extent on how human resource (HR) managers and other top managers perceive LD and its importance. In this study, the purpose of this paper is to examine how LD manifests in HR managers’ and other top managers’ views on the future challenges of HRM. Accordingly, the authors reason what the findings indicate concerning the strategic role of LD in managers’ minds. Design/methodology/approach The topic was approached inductively. The qualitative data were collected from 473 Finnish HR managers and 276 other top managers, using a web-based brainstorming tool that adopted ideas from social media platforms. All of the informants are part of the top management team. The material was analysed using content analysis. Findings The findings were a cause for concern. They show that top managers do not very actively consider either leadership or LD when asked to consider the HR challenges of the future. In addition, when they did so, the ideas of LD were mostly traditional and individual-centred. Only a few of the informants connected LD to business needs. The comments mainly reflected ideas of heroic leadership and training. Originality/value The study advances the understanding of the perceptions of LD decision makers in organizations, but also suggests that more research on the topic is needed. In addition, the study shows that more discussion would be required between academics and managers to deepen the common view of the content, potential, and reality of LD.

A prolonged financial crisis: adjustments and prospects in Eurozone's southern markets

2014 ◽  
Vol 32 (1) ◽  
pp. 94-102 ◽  
Author(s):  
Sotiris Tsolacos
Keyword(s):  
Real Estate ◽  
Risk Premium ◽  
Real Estate Market ◽  
Growth Potential ◽  
Data Series ◽  
Structural Reforms ◽  
Investment Activity ◽  
Content Type ◽  
The Future ◽  
Business Confidence

Purpose – The economic slump in the southern member states of the Eurozone has brought real estate market activity to a standstill and has raised questions about the future of these markets. Will they rebound and will they command a higher risk premium? This paper aims to assess the outlook for these markets as the crisis continues and analyses the conditions that are a prerequisite to restore investment activity and a healthy occupier market. Design/methodology/approach – Within a portfolio allocation framework, the paper examines the conditions for the revival of investor interest in these markets and the uncertainties that should be resolved. Through the analysis of selected data, the paper assesses the emerging state of these markets. Findings – The economic slump in peripheral Eurozone economies gives way to a period of slow growth and ongoing structural reforms. The latter are necessary to restore confidence in the respective economies and investment markets. Sentiment indicators contain the first signs of a rebound in business confidence. With confidence returning and mitigated macroeconomic risks investors will seek value in the markets of the southern region on a selective basis. Price corrections and yield differentials with core markets could prove attractive. It is, however, argued that a risk premium will remain to reflect progress with structural reforms that will make the economies more competitive and less prone to a similar crisis in the future. It is only when such reforms will firmly be put in place that pricing in the southern Eurozone markets will reflect cyclical risks and diversification contributions. Practical implications – The article provides a structured approach to assess the outlook for peripheral markets. It identifies the key risks affecting investor confidence. The analysis proceeds to stress conditions that should be satisfied for a rebound in the investment market. Signals from selected data series are extracted to assess sentiment and adjustment in the market and assist in the assessment of real estate market prospects in these economies. Originality/value – The paper examines conditions for investing in the hard hit markets of the Eurozone. It illustrates the path for the recovery in these markets and the conditions for the rebound in investment volumes. It contributes to the analysis of the growth potential and risk of these markets for investment purposes.

Structure and performance of the Italian alpine “core”: a counterfactual analysis

2020 ◽  
Vol 12 (4) ◽  
pp. 387-407
Author(s):  
Alberto Bramanti ◽  
Sofia Ricci
Keyword(s):  
Inner Core ◽  
Statistical Significance ◽  
Balance Sheet ◽  
Value Added ◽  
Counterfactual Analysis ◽  
Content Type ◽  
The Core ◽  
The Future ◽  
Future Challenges ◽  
Matching Techniques

Purpose The competitiveness of the Alpine regions is strongly influenced by environmental constraints and its relationship with the urban network in the valley floor, which cannot be one of pure dependence. This study aims to analyse the health of the Italian Alpine economy through the performance of its capital companies, defined as those operating in the strictly mountainous are-as within the territories covered by the Alpine Convention. The authors compare the performance (2012-2018) of the “inner core” firms with a counterfactual sample of companies from neighbouring territories to delineate the strengths and weaknesses of the Alpine enterprises. The paper addresses policymakers and practitioners who will design the future policies for the high lands, exploiting a vast collaborative planning network. Design/methodology/approach The study analyses two broad strands of literature on territorial competitiveness. It uses the coarsened exact matching techniques for the selection of a counterfactual sample at the enterprise level. The study follows a policy-oriented design, offering answers to future challenges. Findings The Alpine region has several different local production systems, with a significant level of heterogeneity among firms that differentiate the top 25% from the rest. The counterfactual analysis carried out does not provide clear evidence of significant differences. Instead, it con-firms strong similarities between the Alpine core and the peri-Alpine belt. It is only in terms of employment growth that the core grows less (with a high statistical significance). Finally, the authors introduce the analysis of sustainable value added (SVA) in the core area and use the “tourism chain” to compare different models. The focus here is on two keywords – rarefied and uncontaminated – that enable the transformation of some typical weaknesses of the “minor (or marginal) mountain” into assets for development, provided that place-based and network policies are activated. Research limitations/implications The study focusses on the Italian Alps and could be extended in the future to the other countries participating in the Alpine Convention. It may also be enriched by qualitative analyses of partnerships and sole proprietorships that are not identified by the balance sheet analysis. Practical implications The study follows a policy-oriented design, offering possible solutions to future challenges. Social implications The study offers some suggestions on the post-COVID-19 phase. The bottom-up, reluctant and community dimension are possible strengths to face the challenges that are opening up. Originality/value The study is one of the very few to carry out a counterfactual analysis of Alpine enterprises. It offers evidence on the strengths and weaknesses of the productive fabric of the high lands and updates the assessment of the health status of Alpine enterprises to accompany future fact-based policies after the COVID pandemic.

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