Proceedings from the PRRES Conference - 2007
The 13th Annual Conference of the Pacific Rim Real Estate Society 
 January 21 to 24, 2007, Fremantle, Western Australia

Delegate Papers  - Including Keywords and Abstract

Papers shown as |Refereed| have been refereed through a peer review process involving an expert international board of referees headed by Professor Yu Shi Ming from the National University of Singapore.  Full papers were refereed with authors being required to make any changes prior to presentation at the conference and final publication as a refereed paper in these proceedings.

AUTHOR: Hera Antoniades
TITLE: Should Residential Tenancy Inspection Reports Be Supplemented By Visual Aids? |Refereed|
KEYWORDS: "Landlords, tenants, Residential Tenancies Act, property managers, Consumer Trader and Tenancy Tribunal, written tenancy agreement"
ABSTRACT: "In NSW, landlords and tenants have rights and responsibilities with regards to the rental of real property. The Residential Tenancies Act which commenced on the 30th October 1989 sought to balance the rules for landlords and tenants and introduced new legislative requirements for the written tenancy agreement which was to consist of two parts. Part 1 relates to the terms of the agreement and Part 2 relates to the premises condition report at the beginning of the tenancy. The written tenancy agreement has 28 terms, which cannot be altered or deleted. The research paper focused on those issues that related primarily to Part 2 of the written tenancy agreement between the landlord and tenant. The research examined the adequacies of the current legislation, and whether or not the legislation met the needs of today’s changing landlord and tenant, and if in fact there was a need for a reform of Part 2 of the written tenancy agreement. A survey undertaken indicated approval of the present from of the condition report, with some minor recommendations. With regards to the suggestion of visual aids enhancing the condition reports, this was not well received by the respondents. The respondents appeared to be concerned over the accuracy and accountability of the visual aids."
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AUTHOR: Dr Lynne Armitage, Victoria Brown
TITLE: Issues In Property Management: Caravan Parks – Housing On The Fringe – The Frankston View
KEYWORDS: Australia; caravan parks; movable dwellings; property management.
ABSTRACT: "Whilst investment pressure from excess funds generated by compulsory superannuation contributions is creating opportunity for major international investment in property, at the current extreme of the property investment continuum lies the caravan park. Here, owners and investors also seek a positive return on investment but are stymied by a complex web of concerns which differ in character, though sometimes not in substance, from those of better recognised property investment vehicles. Across Australia ownership of such parks is widely distributed amongst generally small investors many of whom are owner-operators of the park. This piecemeal pattern of ownership and the very broad range of business operations which are encompassed by the term ‘caravan park’ create a series of challenges from the perspective of the management of the property asset with the interests of park operators, the residents and statutory interests often pulling in different directions. Caravan park operators face a range of physical, operational and financial property management pressures but frequently lack the resources to employ professionals skilled in the property aspects of the business. Their immediate clients may comprise a hybrid of tourist and residential occupants with somewhat non-compatible expectations. In addition, the contribution of often unclear tenure and, particularly in well-located coastal environments, an inexorable pressure for higher order use through redevelopment also add to the complexity of issues. After providing some background to the industry, this paper will identify and discuss a number of the pressures which impinge upon the property management aspects of the caravan park asset. It draws upon a comprehensive range of recent literature and is informed by empirical illustration from an established caravan park in Victoria which is identified (fictitiously) as The Frankston Caravan Park."
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AUTHOR: Henning Bjornlund And Peter Rossini
TITLE: Tracing Evidence Of Rational Investor Behaviour In Water Markets - Revisited
KEYWORDS: "Water entitlements, water trading, water investment, water value, discounted cash flow, time series analysis"
ABSTRACT: "With the National Water Initiative in place the Council of Australian Governments are actively pursuing the commoditisation of water entitlements. This will result in all water entitlements being separated from land ownership, and new water registers being established with the same features as the Torrens Title system for land. It is expected that this development will encourage the development of more sophisticated instruments and derivative products for water entitlements, products that will enable both a more speculative investment and trade in water products, as well as allowing water users to better manage the uncertainty associated with supply.Investors in real property make a capital investment hoping to derive a periodic cash-flow from rental and a capital gain after a reasonable holding period. Such an investment will yield a given return often expressed as an internal rate of return. In this paper we will deal with water entitlements in a similar manner. A water entitlement yields a seasonal allocation of water which can be use for irrigation or can be sold every year, just as a property can be leased. At the 2005 PRRES conference, we presented some initial analyses using this investment rationale, based on ten years of data from the Goulburn-Murray Irrigation District and some simple cash-flows (Bjornlund and Rossini, 2005). In this paper we extend these analyses with a longer time period of thirteen years and the use of more complex cash-flow analyses under different decision making scenarios as to when to sell the seasonal allocations. These scenarios include selling at the peak, trough and midpoint of the annual price cycle; selling water equally over the ten “water months”; selling water based on a naive forecast from the peak sales period in the previous year; and selling water during the six “high season” months based on seasonal indices. These analyses are used to assess returns that investors could have achieved through an investment in water entitlements. Long term cycle factor analyses are also discussed to determine the extent to which entitlement prices follow allocation prices over the longer term. Initial results from discounted cash flow analysis indicate that the returns from investments in water entitlements have become more stable as the market matures and that the returns are more comparable to other similar investments. Initial results from cycle factor analyses indicate that the movement in prices of water entitlements and allocations are reasonably synchronized and that the price fluctuation of allocation prices is about twice that of water entitlements."
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AUTHOR: Henning Bjornlund And Martin Shanahan
TITLE: Comparing Implicit And Explicit Water Prices In Three Australian States |Refereed|
KEYWORDS: "Water entitlements, water trading, water prices, water value, price convergence."
ABSTRACT: "This paper examines aspects of changes to water prices following the introduction of water markets along the River Murray. Focusing on the mid to late 1990s, it traces price changes that occurred during the transition from an ‘immature’ market, where the supply of unused water influenced sales, to an early maturing stage where sales of water from inefficient to more efficient users begins to increase. Hedonic functions are used to analyze the transactions of irrigated farmland to identify the implicit price of water when sold together with irrigated farmland and compare these to the explicit price paid for water entitlements in the water market. This comparison is conducted separately for three states. There is tentative evidence to suggest that: 1) prices in the two markets tended to converge; 2) the convergence process varies between states depending on how long the entitlement market has been in operation and the type of major water use; and 3) the more capital intensive the production and the more it is based on permanent crops the more the implicit price is linked to investments in water dependent improvements."
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AUTHOR: Shaun A. Bond And Soosung Hwang
TITLE: An Analysis Of Commercial Real Estate Returns: Is There A Smoothing Puzzle?
ABSTRACT: "In this paper we investigate the commonly used autoregressive filter method of adjusting appraisal-based real estate returns to correct for the perceived biases induced in the appraisal process. Since the early work by Geltner (1989), many papers have been written on this topic but remarkably few have considered the relationship between smoothing at the individual property level and the amount of persistence in the aggregate appraised-based index. To investigate this issue in more detail we analyse a sample of individualproperty level appraisal data from the Investment Property Database (IPD). We find that commonly used unsmoothing estimates overstate the extent of smoothing that takes place at the individual property level. There is also strong support for an ARFIMA representation of appraisal returns."
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AUTHOR: Sandy Bond And Larry Squires
TITLE: Using Gis To Measure The Impact Of Distance To Cell Phone Towers On House Prices In Florida
KEYWORDS: Cellular phone base stations – GIS - health risks – multiple regression analysis – property values – stigma
ABSTRACT: "The siting of cellular phone transmitting antennas, their base stations and the towers that support them (towers) is a public concern due to fears of potential health hazards from the electromagnetic fields (EMFs) that these devices emit. Negative media attention to the potential health hazards has only fuelled the perception of uncertainty over the health effects. The unsightliness of these structures and fear of lowered property values are other regularly voiced concerns about the siting of these towers. However, the extent to which such attitudes are reflected in lower property values affected by tower proximity is controversial. This paper outlines the results of a study carried out in Florida in 2004 to show the effect that tower proximity has on residential property prices. The study involved an analysis of residential property sales transaction data. Both GIS and multiple regression analysis in a hedonic framework were used to determine the effect of actual distance of homes to towers on residential property prices. The results of the research show that prices of properties decreased by just over 2%, on average, after a tower was built. This effect generally reduced with distance from the tower and was almost negligible after about 200 meters (656 feet)."
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AUTHOR: Terry Boyd
TITLE: Bridging The Gap: A Graduate Training Program For The Property Industry In Australia |Refereed|
KEYWORDS: "competencies, graduate experience, mentoring, training programs, online education, technical skills, personal skills, assessment."
ABSTRACT: "In most countries it is a requirement that property professionals undertake a period of practical experience in conjunction with a sound academic background prior to professional recognition and registration. Within Australia the tertiary education standards for property professionals are well established, but the practical experience component is neither well defined nor adequately supervised. This paper examines a graduate professional practice program that is suitable for members of the Australian Property Institute (API). It studies the existing procedures of international property associations, such as The Royal Institution of Chartered Surveyors, The Appraisal Institute and the Appraisal Institute of Canada, as well as the two major professional accounting bodies in Australia. Thereafter it analyses the professional practice activities of API in the various states of Australia and incorporates the results of focus group sessions by members of the national education and national professional boards of API. The result of this research is the development of a comprehensive graduate training program (GTP) that incorporates supervised practice, a progressive assessment module, optional specialist training modules and a final exam and interview. It also addresses the need for a support system for graduates, training module content and a fast-track incentive process."
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AUTHOR: Nelson Chan
TITLE: Deciphering The Latest Round Of Macro Control Of Real Estate In China
KEYWORDS: "property market, speculations, housing bubble, government controls"
ABSTRACT: "The spirally increasing real estate prices have been obsessing the Chinese government for a long time. Since the revival of the real estate market in late 1970’s, the Chinese government has been using a number of macro measures to control and regulate the real estate market. Despite the various measures, the real estate market mains untamed. In the past few years, the rocketing house prices had greatly disturbed the people and the central government. The central government has attempted to use several macro control measures to rein in the unruly market but with limited success. In May 2006, the central government introduced a new package of measures, commonly referred to as “State Council’s 6-point policy”, to control the real estate market. The 6-point policy only provides broad guidelines and needs elaboration. In this regard, nine ministerial departments have subsequently issued a 15-point document to provide details for implementing the 6-point policy package. This paper provides an overview of various real estate macro control policies, the latest measures and makes a comparison of the new measures and the old ones. Through the analysis, it attempts to identify the likely impacts on the housing market."
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AUTHOR: Nelson Chan
TITLE: Should Foreign Real Estate Investment Be Controlled In China?
KEYWORDS: "real estate market, foreign investment, house prices, control measures"
ABSTRACT: "Overseas investors have made significant contribution to revising the real estate market in China. Soon after China reopened its real estate market in the late 1980s, foreign real estate investors began to enter this new market. After peaking in mid-1990s, the Chinese real estate market was relatively inactive until early 2000s when it started to experience strong growth. The rocketing house prices have incited strong criticism among the people. The central government is very concerned about the public outcry and various measures have been introduced to cool down the red hot real estate market. While local speculators are blamed for the escalating house prices, foreign real estate investors are also regarded as accomplices for causing the problem. On 24 July, 2006, new measures known as the Opinions on Regulating Market Access and Management of Foreign Investment in China’s Real Estate Market were introduced to restrict foreign real estate investment in the country. This paper provides an overview of the growth of foreign real estate investment in China, the amount of foreign real estate investment, their contribution to high house prices, the new measures on the control of foreign investment, and the likely impacts on the Chinese housing market."
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AUTHOR: Bwembya Chikolwa
TITLE: An Empirical Analysis Of Commercial Mortgage-Backed Securities Credit Ratings: Australian Evidence
KEYWORDS: Commercial Mortgage-Backed Securities; credit rating; ordinal regression; artificial neural networks
ABSTRACT: "The ultimate goal of structuring Commercial Mortgage-Backed Securities (CMBS) transactions is to obtain a high credit rating as this has an impact on the yield obtainable and the success of the issue. Though bond rating agencies claim that their ratings reflect each agency’s opinion about an issue’s potential default risk and rely heavily on a committee’s analysis of the issuer’s ability and willingness to repay its debt and therefore researchers would not be able to replicate their ratings quantitatively (Kim 2005), we follow previous researchers who gone ahead and replicated bond ratings on the premise that the financial variables extracted from public financial statements, such as financial ratios, contain a large amount of information about a company’s credit risk (Huang et al. 2004). We use artificial neural networks (ANN) and ordinal regression (OR) as alternative methods to predict CMBS ratings. OR results show that rating agencies use only a subset of variables they describe or indicate as important to CMBS rating as some of the variables they use were statistically insignificant. Overall, ANN show superior results to OR in predicting CMBS ratings."
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AUTHOR: Neil Crosby And Sandi Murdoch
TITLE: Australian And Uk Small Business Leases – What Can We Learn From Each Other?1 |Refereed|
KEYWORDS: "small business, commercial leases, Australia, UK"
ABSTRACT: "This paper addresses the commercial leases policy issue of how to deal with small business tenants. The UK has adopted a voluntary solution to commercial lease reform by using Codes of Practice which is in contrast to the legislative approach adopted by Australia to attempt to solve its perceived problems with small business retail tenancies. The major aim of the research was to examine the perceptions of the effectiveness of the legislation in Australia and discuss any implications for the UK policy debate but the results of the research also raise questions for the Australian regime. The research used a combination of literature and legislation review and a semi structured interview survey to investigate the policy aims and objectives of Australian Federal and State Governments, identify the nature and scope of the Australian legislation and examine perceptions of effectiveness of the legislation in informing small business tenants. The situation is complicated in Australia due to leases being a State rather than Federal responsibility therefore the main fieldwork was carried out in one case study State, Victoria. The paper concludes that some aspects of the Australian system can inform the UK policy debate including mandatory information provision at the commencement of negotiations and the use of lease registrars/commissioners. However, there are a number of issues that the Australian legislation does not appear to have successfully addressed including the difficulties of legislating across partial segments of the commercial property market and the collection of data for enforcement purposes."
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AUTHOR: Neil Crosby, Sandi Murdoch, Eilleen Webb
TITLE: Landlords And Tenants Behaving Badly? The Application Of Unconscionable And Unfair Conduct To Commercial Leases In Australia And The Uk.
KEYWORDS: "commercial leases, Unconscionable conduct, Australia, UK"
ABSTRACT: "This paper aims to compare the approach of Australia and the UK in the use of unconscionable conduct principles in the area of commercial leasing in the small business sector. The objectives are to trace the process by which unconscionable conduct principles came to be included in the Australian retail tenancies legislation, examine the subsequent case law in order to assess the difficulties in applying the principles to retail lease cases, determine the impact of the provisions on the attitude of the parties to the negotiation, discuss the approach adopted in the UK legal system to unconscionable and unfair bargains and consider the current attitude to its applicability to business leases. The paper concludes that Australian experience shows that the hurdles set for the application of unconscionable conduct appears to be too high to offer real relief to tenants. Clear guidelines as to what is likely to be regarded as unconscionable conduct in a retail leasing context should be provided. Also, lessees must be able to feel confident that, if they decide to proceed with a retail tenancy claim, there is some prospect of success and they will not be unduly disadvantaged in any further dealings with their landlord. English law on unconscionable bargains is less well developed than that in Australia, there appears to be no pressing need for it to become so, at least in the context of business leases. However including commercial leases in the law relating to unfair terms in contracts could be one approach to help address the small business tenant policy issue currently exercising the UK Government. But, the issue is often the conduct associated with the dealings between the lessor and lessee rather than the terms of the lease itself."
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AUTHOR: Anthony Crossland
TITLE: Interest Rate Effects On Listed Property Trust Performance
ABSTRACT: "In this study an Ordinary Least Squares (OLS) regression procedure was used in conjunction with daily and quarterly returns data to address the issue of whether Australian Listed Property Trusts (LPTs) are sensitive to changes in short-term and long-term interest rates over five-year and ten-year periods. At both an aggregate and sector level, it is evidenced that there is a weak-to-medium inverse relationship between LPT returns and long-term interest rate fluctuations, while the effect of the short-term rate was extremely small. LPTs are viewed as long-term assets, thus it makes sense that they show a stronger relationship with long-term investment indicators. This relationship was further examined and results indicate that the sensitivity to interest rate changes was partially due to the LPTs varied leverage levels. In addition, the study makes an attempt to investigate the determinants contributing to the LPT/interest rate relationship, by portraying LPTs as typically holding a combination of property, stock and bond factors. Thus, the reactions of these asset classes to interest rate fluctuations are examined in order to account for the previously determined inverse relationship between LPT returns and long-term interest rate fluctuations."
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AUTHOR: William Dimovski And Robert Brooks
TITLE: Factors Influencing The Direct Costs Of Property Trust Ipos.
ABSTRACT: "Underwriting, legal, accounting and valuation costs average around 3.3%, 0.39%, 0.23% and 0.12% of proceeds raised and are substantial costs to property trust initial public offering (IPO) issuers. As such, identifying factors that influence these costs is important. This paper investigates factors influencing these costs as well as the total direct costs of raising equity capital by property trust IPOs in Australia from 1994 to 2004. The results suggest clear economies of scale in direct costs. In addition, IPOs that employ more debt are likely to have higher capital raising costs while those that have proportionally higher net asset values and offer stapled securities (and likely to be engaged in property development activities) have lower capital raising costs."
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AUTHOR: William Dimovski And Robert Brooks
TITLE: An Investigation Into The Responsiveness Of Listed Property Trust Returns And Their Attributes |Refereed|
ABSTRACT: "Underwriting, legal, accounting and valuation costs average around 3.3%, 0.39%, 0.23% and 0.12% of proceeds raised and are substantial costs to property trust initial public offering (IPO) issuers. As such, identifying factors that influence these costs is important. This paper investigates factors influencing these costs as well as the total direct costs of raising equity capital by property trust IPOs in Australia from 1994 to 2004. The results suggest clear economies of scale in direct costs. In addition, IPOs that employ more debt are likely to have higher capital raising costs while those that have proportionally higher net asset values and offer stapled securities (and likely to be engaged in property development activities) have lower capital raising costs."
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AUTHOR: Chris Eves
TITLE: Nsw Rural Land Performance: 1990-2005
KEYWORDS: "Rural land, rural economics, rural land values, rural land use, rural land investment, investment performance, rural property prices."
ABSTRACT: "The annual income return for rural property is based on two major factors being commodity prices and production yields. Commodity prices paid to rural producers can vary depending on the agricultural policies of their respective countries. Free trade countries, such as Australia and New Zealand are subject to the volatility of the world commodity markets to a greater extent than those farmers in protected or subsidised markets. In countries where rural production is protected or subsidised the annual income received by rural producers has been relatively stable. However, the high cost of agricultural protection is now being questioned, particularly in relation to the increasing economic costs of government services such as health, education and housing. When combined with the agricultural production limitations of climate, topography, chemical residues and disease issues, the impact of commodity prices on rural property income is crucial in the ability of rural producers to enter into or expand their holdings in agricultural land. These problems are then reflected in the volatility of the rural land capital returns and the investment performance of this property class. This paper will address the capital return performance of a major agricultural area and compare these returns on the basis of both location of land and land use. The comparison will be used to determine if location or actual land use has a greater influence on rural property capital returns. This performance analysis is based on over 35,000 rural sales transactions. These transactions cover all market based rural property transactions in New South Wales, Australia for the period January 1990 to December 2005. Correlation analysis and investment performance analysis has also been carried out to determine the possible relationships between location and land use and subsequent changes in rural land capital values."
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AUTHOR: Nick French
TITLE: Valuation Uncertainty - Common Professional Standards And Methods
KEYWORDS: "Normal Uncertainty, Abnormal Uncertainty, Market Value, Valuation"
ABSTRACT: "Valuation is often said to be “an art not a science” but this relates to the techniques employed to calculate value not to the underlying concept itself. Valuation is the process of estimating price in the market place. Yet, such an estimation will be affected by uncertainties. Uncertainty in the comparable information available; uncertainty in the current and future market conditions and uncertainty in the specific inputs for the subject property. These input uncertainties will translate into an uncertainty with the output figure, the valuation.The degree of the uncertainties will vary according to the level of market activity; the more active a market, the more credence will be given to the input information. In the UK at the moment the Royal Institution of Chartered Surveyors (RICS) has considered ways in which the uncertainty of the output figure, the valuation, can be conveyed to the use of the valuation. The current requirement is for the valuer to “indicate” to the user of the valuation any “material effect” of uncertainty on the valuation figure provided. However, an indicative survey of valuers around the UK shows that only a fraction of the profession is following these guidelines as they feel that is lack of clarity. One of the major problems is that Valuation models (in the UK) are based upon comparable information and rely upon single inputs. They are not probability based; yet uncertainty is probability driven. In this paper, we discuss the issues underlying uncertainty in valuations and suggest a probability-based model (using Crystal Ball) to address the shortcomings of the current model and to develop common professional standards and methods for measuring and expressing valuation uncertainty."
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AUTHOR: Ge, X J And Harfield, T
TITLE: The Quality Of Data And Data Availability For Property Research |Refereed|
KEYWORDS: "Quality of data, Data availability, Property market."
ABSTRACT: "Property market performances have great impact on the economy as a whole. Property research is one of the disciplines of scientific research that provide significant information for decision-makers. However, scientific research requires quality data. Quality data plays a vital role in providing reliable and valid information for property market performance. This paper discusses the state of property data in terms of both quality and availability. A possible solution is made concerning the current lack of adequate availability of quality historical datasets for property researcher."
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AUTHOR: Bob Hargreaves
TITLE: What Do Rents Tell Us About House Prices? |Refereed|
KEYWORDS: "Rents, house prices, forecasting, New Zealand."
ABSTRACT: "Since 2000 there an unprecedented increase in house prices in a number of western countries, including New Zealand. House prices have risen much more rapidly than rents. This has resulted in questions being raised about the traditional relationship between residential rents and values. The objective of this paper is to determine if changes in private sector residential rents can be used to forecast changes in New Zealand house prices. The hypothesis being that there is a strong linkage between income and value in both the share markets and commercial property markets and the same effect is likely to be true for housing."
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AUTHOR: Abdul Hassan
TITLE: National Overview Of Housing In Fiji
KEYWORDS: "overview, housing market, price hike, homebuyer"
ABSTRACT: "This paper provides an overview of the housing market in Fiji. The research would looks into the development in the housing market over the last five years, housing prices, and future trends. The Fiji housing market has experienced a rapid growth over recent years. Prior to this, there has never been such a strong price growth. There is a sharp increase in housing prices particularly in Suva City, followed by other urban centres. Suva has outperformed other centres as the price in many cases has doubled over a short period. The recent price hike has been of concern to local residents and the government. The sharp deterioration in affordability by an average Fijian provides a challenging backdrop to the Fiji Government’s target to increase home ownership by the local residents. The Real Estate Agent Bill has been enacted recently, enabling government to bring real estate dealing under statutory control. This paper seeks to establish the factors contributing to the changing structure of the housing market in Fiji and the impact it will have on an average prospective Fijian homebuyer."
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AUTHOR: Russell Kenley, Christopher Heywood, Mudrajad Kuncoro, Nicola Brackertz And Nguyen Thi Pham
TITLE: Corporate Real Estate Management As A Source Of Competitive Advantage |Refereed|
KEYWORDS: "Australia, Corporate Real Estate, competitive advantage, firm competitiveness, management practices,"
ABSTRACT: "Organisational competitive advantage is a recent general management literature theme. Corporate Real Estate (CRE) as an organisational resource capable of improving organisational competitiveness is underrecognised. For CRE and its management to fully support a competitive organisation it is thought to be essential that CRE practices align with the organisational competitive positioning and its sources of competitive advantage. This paper presents part of a study of competitive advantage and CRE management (CREM) practices as a step towards recognising CRE’s competitive contribution. A model of sustainable competitive advantage is introduced that contains theorised connections between CREM practices and Sources of Competitive Advantage (SCAs). Three advantages – Cost, Differentiation and Innovation – were identified and modelled. An empirical study of Australian CRE managers was then conducted to test the model and establish which competitive advantages were used. Of the three Sources of Competitive Advantage, Cost predominated, both in the model and the empirical data. The empirical study establishes the viability of the model as a useful device for CRE managers to evaluate their CRE practices and align their CREM with organisational modes of competition and competitive advantage."
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AUTHOR: David M. Higgins
TITLE: "Commingled Four Quadrant Property Funds: Structure, Strategy And Performance" |Refereed|
KEYWORDS: "commercial property, portfolio analysis, property investment allocation"
ABSTRACT: "In broad terms, the structure of all property investment products can fit into the four established investment quadrants of the capital market – private equity, public equity, private debt and public debt. For the period 1999 to 2005, this research models and then analyses the quarterly performance of the four Australian property investment quadrants with portfolio asset allocation based on the Markowitz constrained mean– variance approach. The results show that the four property investment quadrants offer significant performance diversification benefits and can form effective mixed property investment portfolios along the efficient frontier. For a relatively low risk strategy (7% to 9% annual return) a portfolio based on private debt is the preferred option, this switches to a strong private equity weighting for a 9% to 12% annual return. At the higher ranges of the efficient frontier, public equity allocation gradually increases to form a high risk, 13% single asset annual return. As this approach is relatively new to Australia, more knowledge and defined performance measures of the individual property markets will assist with the research and will lead to new commingled four quadrant property funds for institutional investors interested in executing a successful single account property portfolio investment strategy."
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AUTHOR: Emma Jackson, Valerie Kupke And Peter Rossini
TITLE: The Relationship Between Socio-Economic Indicators And Residential Property Values In Darwin. |Refereed|
KEYWORDS: "Darwin, Socio-economic indicators, residential property, regression analysis, factor analysis, aggregated data model"
ABSTRACT: This paper examines the relationship between social and economic indicators and residential property prices in Darwin. Following early work on this approach that was developed in the 1970’s the work extends similar studies from Adelaide in the 1980’s and wider Australian works published more recently. The analysis uses 2001 census data at the collection district level and basic residential sales data at the unit level. Factor analysis is employed to develop basic social economic indicators at a CD level. The unit data is from a simple text based file and a basic grid and CD allocation method are used in the absence of digitised location data. Various amalgamations are used to measure the relationships between the socio-economic indicators and residential property data. Trend surface analysis is used to find a basic value surface. The comparison of the unit and amalgamated models provides useful guidance to developers of AVM’s where data is scarce and not available in a GIS while the results provide an important insight into the dynamics of the Darwin property market.
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AUTHOR: Dr John Keogh
TITLE: Litigation Issues In Retail Leases In New South Wales
ABSTRACT: "Large shopping centres continue to capture the imagination and the pockets of consumers throughout Australia and the modern cities of the world as they strive to provide the ideal answer to the one stop shopping phenomenon. More recently, New South Wales has experienced the growth in bulky goods warehouse retailing as a popular mecca for endless hours of retail therapy, whilst the young and fashion conscious have enthusiastically embraced the concept of DFS (Direct Factory Sales) marketing at less exotic retail venues. In November 2006 the worlds largest retail development, the Dubai Mall in Dubai, opened its doors with 1400 shops on a site that is the equivalent of 50 international soccer fields, reputedly surpassing the “8th Wonder of the World”, the Edmonton Mall in Alberta, Canada, which has 800 shops, 100 eateries and 493,000 square metres of space. The NSW Government has, since the introduction of the Retail Leases Act 1994 (“the Act”) confirmed its intention to actively regulate the relationship between smaller retailers (lettable areas of less than 1000 square metres) and shopping centre landlords. Smaller retailers are generally not the anchor tenants of shopping centres but they provide high returns to landlords through rents and in many cases, a contribution from monthly turnover. In NSW, disputes between retailers and shopping centre landlords frequently occur over the payment of rents, fitouts, assignment of leases, options to renew and rent reviews based on market rent. These disputes fall within the jurisdiction of the Act and the Administrative Decisions Tribunal. This paper examines a wide range of recent disputes and the legal principles guiding their resolution. It also examines how the recent amendments to the Act (which commenced on 1 January 2006) will impact on future litigation prospects."
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AUTHOR: Rob Kooymans And James Abbott
TITLE: Developing An Effective Service Life Asset Management And Valuation Model
KEYWORDS: "real estate database, depreciated replacement cost, effective service life, depreciated cost method of valuation"
ABSTRACT: "This paper describes the development and testing of a depreciated replacement cost model for a portfolio of corporate real estate assets. In relation to corporate real estate, the model was found to be a useful catalyst for constructing a meaningful real estate database; it provides a ready reference schedule for CRE capital expenditure planning; it facilitates calculation of sums insured for replacement and indemnity insurance; it greatly reduces the time and cost of real estate value calculation for balance sheet and other purposes. In the general real estate market context, the model also has potential to assist in the valuation of nonresidential properties in real estate markets where market sales data is non-existent or unreliable."
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AUTHOR: Vicki Adams, Max Kummerow, John Kilpatrick, Bill Mundy And Ron Throupe
TITLE: Valuation Of Impaired Land: Greenfield Advisors Experience With Contaminated Sites
KEYWORDS: "contamination, damages, property rights, appraisal, valuation, externality, mass appraisal"
ABSTRACT: "This paper reviews issues related to estimating property value effects from contaminated sites. Industrial economies release millions of chemicals into air, soil and water with adverse effects on human health, other species, future community economic development and private property values. Hundreds of thousands of parcels are damaged by contamination in the United States. Both private property rights and public goods are affected. Greenfield Advisors (formerly Mundy Associates), a Seattle based appraisal, specializes in assessing damages to real estate values resulting from contamination, often serving as expert witnesses in litigated cases. These valuations may require both cross sectional spatial analysis of contamination effects and time series analysis to assess how contamination and stigma play out over time. Cases begin with science respecting the environmental fate and remediation of particular contaminants and their human health consequences and effects on air, soils, water and living organisms. Class action treatment of cases where many properties are affected, environmental laws and regulations that determine “responsible parties”—in some cases with joint and several liability for any party in the chain of title—and foundation property rights principles (laws forbidding nuisance, trespass and unjust enrichment) play important roles in recovery of damages in such cases. Limited or incorrect information and beliefs may cause market prices to deviate from values that assume knowledgeable buyers and sellers."
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AUTHOR: Max Kummerow
TITLE: Price Differences Models
KEYWORDS: "Valuation, appraisal, hedonic models, sales comparison, appraisal errors, AVM models."
ABSTRACT: "Appraisal practice often relies on small samples—three comparable sales, for example— from which to infer likely selling price of a subject property. There is good reason for this small sample approach, namely the heterogeneity of properties, market participants, locations and sub-markets that tends to increase misspecification, measurement errors and population variance as sample size increases. Therefore, the law of large numbers may not hold and estimates may become less efficient as sample size increases. The logic of all three “approaches” to value involves inferring price differences from a small sample of similar transactions using a hedonic model in the form Price = Price of comparable sale +/- price differences due to differing property characteristics. This paper offers an example of a small sample model, estimated from Seattle housing sales data analogous to a time series model in differences. Results are data dependent and will be the same as results of a regression with data in price and property characteristic levels only if the functional relationships are linear with constant slope throughout the range of the predictor variables. The data indicate that this is not the case, arguing for small samples and spatial models."
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AUTHOR: Peddy Pi-Ying, Lai And Dominique Fischer
TITLE: The Determinant Of Foreign Property Investment In Island Nations - The Case Of Taiwan
KEYWORDS: "Foreign direct investment (FDI), determinants, AHP (analytic hierarchy process), property investment, island nations"
ABSTRACT: "In recent years there has been a boom in overseas property investment with more and more people taking advantage of favorable exchange rates coupled with lower property prices abroad. This study examines the preferences of foreign investors in Taiwan real estate market. A multi-criteria decision analysis tool (analytic hierarchy process: AHP) is used to examine how foreign real estate companies determine their localization in Taiwan. The article concludes that among the 24 chosen criteria, the level of operational risks seems to be the determining decision factor. This paper identify the factors that could explain foreign investors’ selection criteria when they decide to invest in Taiwan. The results of our research could be advantageously used by the State economic development agencies, real estate developers and central-level policy-makers. The contribution of this research is to realize the determinants on the real estate industry in Taiwan under global economy, and by this means, we can provide some suggestions to construct suitable environment for foreign investor in Taiwan and reference organization."
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AUTHOR: Chyi Lin Lee, Jon Robinson And Richard Reed
TITLE: Downside Systematic Risk In Australian Listed Property Trusts |Refereed|
KEYWORDS: "downside systematic risk, financial determinants, management structure, listed property trusts"
ABSTRACT: "Previous studies on systematic risk have demonstrated the link between financial and management structure determinants and systematic risk. However, systematic risk is estimated by assuming return is normally distributed. This assumption is generally rejected for real estate returns. Therefore, downside systematic risk appears as a more sensible risk measure in estimating market-related risk. This study contributes to this body of knowledge by examining the determinants of downside systematic risk in Australian Listed Property Trusts (LPTs) over 1993-2005. The results reveal that systematic risk and downside systematic risk are empirically distinguishable. More specifically, there is limited evidence on the connection between these financial and management structure determinants and systematic risk. However, downside systematic risk is sensitive to leverage and management structure."
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AUTHOR: John Mcdonagh
TITLE: Trends In The Use Of The Internet For Marketing Residential Real Estate In New Zealand |Refereed|
KEYWORDS: "Real estate, marketing, Internet, World Wide Web, home purchase, trends, survey, New Zealand"
ABSTRACT: "Sales and purchases of residential real estate are the most significant financial transactions that the majority of the population are involved with. As such they are concerned that these transactions are carried out efficiently and to their best advantage. One of the most significant changes affecting modern society over the last ten years has been the growth in consumer use of the Internet. This research examines the intersection of these two important issues – i.e. the use of the Internet for marketing residential real estate. Over the last twelve years Lincoln University has biennially surveyed residential real estate buyers and sellers in Christchurch, New Zealand. Findings from this research include the rapid growth of Internet use in recent years at the expense of newspaper advertising. However, the radical change in real estate brokerage services predicted by earlier researchers has not occurred – at least not yet. But major changes in Internet access and use are still underway and their effects on real estate brokerage may not be fully played out for some time to come."
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AUTHOR: Geoffrey Meen, Julia Meen And Christian Nygaard
TITLE: A Tale Of Two Victorian Cities In The 21St Century
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AUTHOR: Yasmin Mohd Adnan,
TITLE: "13Th Pacific-Rim Real Estate Society Conference Fremantle, Western Australia, 21 To 24 January 2007"
KEYWORDS: "adoption of PBL, implementation, student centred approach."
ABSTRACT: "As the world undergoes changes under the influence of globalisation, graduates that enter the job market are now faced with a new set of challenges in order to compete competitively for the best jobs in the ever-changing organisations that suits their competencies. Universities that traditionally play the role of disseminating knowledge need to reexamine their role to prepare their graduates in facing the new set of requirements. University of Malaya in the move to improve student’s abilities to think and communicate effectively has introduced and initiated the implementation of problembased learning (PBL). It is a student centred method where students learn by working on real time problems and activities with the teachers, as facilitators. The implementation of problem-based learning is acknowledged due to the attractiveness of a high numerical efficiency in the PBL programme in the medical curriculum. The paper explores the possible adoption of the approach in the real estate courses curriculum highlighting the possible areas of benefits and concerns in its implementation drawing the experiences from others. It further describes the experience in the introduction and implementation of problem based learning (PBL) for two batches of students in the Estate Management Degree programmes at the Faculty of the Built Environment , University of Malaya"
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AUTHOR: Mohd Nazali Mohd Noor
TITLE: Adaptation Of Best Value Service On Rationalisation Of Service Charge For Purpose Built Office (Pbo) In Malaysia
KEYWORDS: service charge; office lease; office rental; building types; facilities management; services; maintenance charges; lease valuation; management fund; sinking fund; outgoings; commercial real estate; landlord and tenants.
ABSTRACT: "As certain types of property has become more complex and both customer and occupier expectations have changed; the services provided by the owners have increased in scope. A modern service charge may therefore include provision for the recovery of a multiplicity of services. In Malaysian scenario, the calculation of service charge for PBOs is therefore deceived since service charge is embedded in the rental charge to tenants. In addition, the existing practice of rental rate for PBO is not transparency enough to educate the tenants in knowing what they could get from the portion of service charge that they are paying. This paper represents an outline on issues in regards to service charge generally and to the commercial property specifically. A comparative overview between Malaysia and the UK perspective involving relevant codes, best practices and legislative standpoint in governing service charge are the core elements of discussion."
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AUTHOR: Jonathan Sayer And John Moohan
TITLE: An Analysis And Evaluation Of Hedonic Price Valuations In Local Leasehold Office Markets |Refereed|
KEYWORDS: Characteristics theory of value; Hedonic price studies; Leasehold office valuations; Stepwise regression analysis; Economic methodology
ABSTRACT: "This research aims to analyse and evaluate the application of the hedonic method of price determination to office rental valuations in a local commercial property market in the East Midlands, United Kingdom. Previously published theory and empirical evidence has been reviewed and evaluated in the context of both residential and commercial property markets mainly in the UK and USA. To date the vast majority of studies have been applied to residential property markets, largely as a consequence of data availability and assumed market conditions. The array of office market studies can be classified in different ways but include time series based rental indices, habit persistence theory, hedonic rent indices, cross sectional hedonic studies and behavioural studies. Statistically the primary determinants of office values and transaction (or asking) rents in hedonic studies appear to be various indicators of size of property, quality and location. It is common for asking rents to be used as a surrogate dependent variable or a proxy for actual rents. In this cross sectional hedonic price study of 58 commercial properties in Derby for the summer of 2004 there was no significant difference between asking rents and actual rents at the 95% level of significance. Asking rents were shown to be a reasonable proxy for transaction rents, which is consistent with Mills (1992). A correlation matrix was constructed which revealed problems of interdependence between the presence of suspended ceilings and comfort cooling, and double glazing and category II lighting respectively. A parsimonious least squares linear regression model was developed that statistically explained 94.2% of the variation in asking rents. Size of property and double glazing were identified as explanatory variables at the 95% level of significance. These findings were similar to Dunse and Jones (1998). But in contrast to other research (Mills 1992; Dunse and Jones, 1998) proximity to a railway station, location in a business park, presence of parking, and a full repairing and insuring lease were not significant explanatory variables at the 95% level of significance. These differences between models may be explained by local influences such as the nature of the study area, the size and characteristics of the commercial property market, its economic structure, the number of observations in the model and the date at which the model was tested. The authors also tested the predictive power of the model. The model was validated by removing six observations from the data set, recalibrating the model and predicting the asking rents for the six properties. There was a tendency to significantly overestimate asking rents for relatively low rental properties. Generally the model showed poor predictive power. Asking rents per square foot were calculated and shown to have a wide dispersion around the mean. 36% of the variation in asking rents per square foot was explained by double glazing, on property parking and location on a business park development at the 95% level of significance. Whilst the explanatory power of the model could be improved in various technical ways, it may also be improved by adopting a pluralist approach to the explanation of commercial rents by combining quantitative and qualitative research methodologies that seek to verify and validate the behaviour of valuers."
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AUTHOR: Georgia Myers, Richard Reed, Jon Robinson
TITLE: The Relationship Between Sustainability And The Value Of Office Buildings
KEYWORDS: "Sustainability, office buildings, market value, perception."
ABSTRACT: "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."
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AUTHOR: Graeme Newell And Hsu Wen Peng
TITLE: The Significance And Performance Of Industrial Property In Australia
KEYWORDS: "Industrial property, industrial LPTs, industrial property type, performance analysis, portfolio diversification."
ABSTRACT: "Industrial property is an important property investment sector, with both direct industrial property and industrial LPTs having a significant role in Australia. The purpose of this paper is to assess the significance of industrial property, the importance and performance of industrial property type, size, value and geographic region in Australian industrial property and the strategic role of direct industrial property and industrial LPTs in a mixed-asset portfolio over Q3:1995-Q2:2006. Riskadjusted performance analysis is used to assess the added-value of industrial property in a portfolio, with the portfolio diversification benefits of industrial property also assessed. Industrial property and industrial LPTs are shown to provide consistent and well-performed risk-adjusted returns, although both industrial property and industrial LPTs has seen some loss of property portfolio and mixed-asset portfolio diversification benefits in more recent years."
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AUTHOR: Atasya Binti Osmadi
TITLE: A New Property Dimension To Islamic Finance |Refereed|
ABSTRACT: "Published evidence on the performance of PTFs (Property Trust Funds) in Malaysia is very limited (e.g., Kok and Khoo, 1995; Ting, 1999; Newell, Ting and Acheampong, 2002; Rozali and Hamzah; 2006). With significant results from previous research, various efforts has been taken to improve the performance of the Malaysian REIT market including continuous regulation reforms, high quality real estate acquisitions and the development of competitive investment products (i.e. Islamic REIT). However, a review and performance analysis of Malaysian REITs has not yet been discussed. This paper aims to discuss whether these efforts have resulted to in increased stature and performance of the Malaysian REIT industry."
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AUTHOR: Geoff Page
TITLE: An Exploration Of Professional Socialization In Pacific Rim Property Programs
ABSTRACT: Study and consideration of the professional socialization process has been instrumental in changing the way graduates are trained and how they are supported post graduation. This paper discusses the development and design of two surveys: one of property program director in the Pacific Rim and the second a sample of Australian graduates who have recently become full members of the relevant property professional body. The study of program directors focuses on awareness of professional socialization of valuers and how the development of graduates’ professional socialization is accommodated at orientation and in subsequent years of their program. The study of graduate valuers explores their working experience and professional development post graduation and their preparedness to become accredited professionals. The paper presents preliminary findings from the two surveys.
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TITLE: Review Of Professional Socialization As A Mechanism To Improve Graduate Outcomes
ABSTRACT: "Professional socialization can be described as the acquisition of values, attitudes, skills and knowledge pertaining to a professional subculture. This paper reviews recent research on the study of professional socialization in fields such as nursing, health sciences, sport and medicine, as they apply to the tertiary education context and the beginning of work. The findings of this review suggest that study and consideration of professional socialization assists in improving tertiary education and graduates’ preparedness for the real world pressures of professional working life. These include the themes of early context, role models, placement, reflection, ceremonies, curriculum and long term impacts paper that could be considered in the development and of valuation and property programs."
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AUTHOR: David Parker, John Macfarlane, Graeme Newell And Peter Rossini
TITLE: Developing An Appraisal-Based Residential Property Index
ABSTRACT: "Whilst an appraisal-based index for commercial property is now well established, no such index exists for residential property. The paper considers existing approaches to measuring movements in the residential property market, issues surrounding index construction and includes a brief literature review. Based on data provided by the Australian Valuation Office, the paper considers the development of an appraisal-based residential property index and concludes with comments on potential index application."
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AUTHOR: David Parker
TITLE: The Role Of Director’S Valuations In Balance Sheet Reporting
KEYWORDS: "Valuation, director, governance, accounting, reporting"
ABSTRACT: "Following a brief literature review, the paper considers the regulatory framework surrounding the role of director’s valuations in balance sheet reporting. Issues surrounding the use of director’s valuations are then considered through case study analysis with areas for further research identified. The paper then draws conclusions on the role of director’s valuations in corporate governance and suggests areas for improvement."
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AUTHOR: Hsu Wen Peng And Graeme Newell
TITLE: The Significance Of Infrastructure In Investment Portfolios |Refereed|
KEYWORDS: "Infrastructure, listed infrastructure funds, economic infrastructure, social infrastructure, performance analysis, investment characteristics."
ABSTRACT: "Infrastructure has taken on increased investment importance in recent years with the growth in listed and unlisted infrastructure funds, and increased interest in infrastructure as an asset class by superannuation funds. This includes both economic infrastructure (eg: transport, utilities and communications) and social infrastructure. In addition to the traditional listed infrastructure companies, this has seen a number of major institutional investors in Australia become increasingly involved in infrastructure funds; this includes Macquarie, AMP, Babcock and Brown, Hastings and James Fielding. The purpose of this paper is to assess the significance of these infrastructure funds in Australia; particularly highlighting the leading infrastructure funds, types of infrastructure investment and superannuation fund investment in infrastructure. The investment characteristics and performance of infrastructure over 1995-2006 will also be assessed, as well as the potential role of infrastructure in portfolios."
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AUTHOR: Kathryn Robson
TITLE: Do Study Tours/Field Trips Contribute To The University Experience?
KEYWORDS: "Study Tours, Field Trips, educational value, social experiences, flow on effects, enhancing university experiences, life-long learning"
ABSTRACT: "International Study Tours are very popular course (subject) electives with Property and Construction students at RMIT University. These study tours are done over a concentrated week, to ten day period and many students view them as an enjoyable and time effective way of progressing their degree. In contrast, field trips form an important part of a semester subject and can vary from a few hours, to up to a week. This paper will address the issue of student experiences on two different residential trips and the possible flow-on changes in university satisfaction they may create. These trips are often seen by staff on one hand, as time consuming and difficult to organise, requiring more rigorous control than for a traditional subject, but on the other hand, reaping rewards in the form of unique experiences and social interaction. This paper specifically examines the experiences of students, from one of the two international study tours and from one of the two valuation field trips, undertaken by the School of Property, Construction and Project Management during 2006, in an attempt to test the validity of these beliefs."
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AUTHOR: Kathryn Robson
TITLE: Life By The Sea: An Analysis Of Residential Property In Coastal Victoria |Refereed|
KEYWORDS: "Housing, affordability, demographic trends, Sea Change, lifestyle, coastal development, infrastructure."
ABSTRACT: "Thirty years ago Australian residential property was cheap compared to most other western countries. Gradually and sometimes swiftly, over that time, Australian housing affordability has diminished in most of the Australian capital cities. As city sprawl continues a trend has emerged. That is, the large movement of people from capital cities to coastal areas around the country. The Australian population was just over 20 million in 2004. At this time, 12.6 million lived in the capital cities which left 7.5 million in the rest of the continent. Research shows that 5.6 million peopled lived in coastal Australia at that time. This 5.6 million people represents 75% of all Australians living outside capital cities. (ABS, 2004a) It is a fact that the capital cities are getting larger and it is a fact that coastal regions are the second major growth trend. This paper focuses on the coastal areas of the Bellarine Peninsula and the Surf Coast in South-western Victoria, as examples of typical coastal development and uses secondary data, surveys and interviews to gain an understanding of the demographic mix of coastal Victoria."
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AUTHOR: Karl-Werner Schulte And Gisela Schulte-Daxboek
TITLE: The Profile Of Executive Real Estate Education – Results From An Empirical Study
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AUTHOR: Rayna Brown, Gregory Schwann And Callum Scott
TITLE: Personal Residential Real Estate Investment In Australia: Investor Characteristics And Investment Parameters
ABSTRACT: "To date out understanding of the factors affecting the housing supply stem from the private provision of new units through real estate development. This paper investigates a different aspect of housing supply, the private provision of rental housing through investment in existing properties. Using logistic regression and a series of micro datasets of Australian households we examine the investment decision of residential rental property investors over the period 1990 – 2004. The sample period incorporates a full real estate cycle. Our results indicate that wealth-related factors are the dominant factors driving these investments. Life-cycle factors such as marriage and children play a less important role. Most of the determinants of income property investment do not vary with the property cycle. Marriage is an exception. It became more important as house prices rose."
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AUTHOR: John Sheehan And Garrick Small
TITLE: Aqua Nullius |Refereed|
ABSTRACT: "The fiction of terra nullius1 is addressed in Mabo & Ors v The State of Queensland (No 2)(Mabo) (1992) 175 CLR 1, however the increasing commodification of water has raised the issue of whether a new form of indigenous dispossession is now subtly occurring. When the Crown abrogates its beneficial title in favour of private parties through Crown grants, it is now a legal maxim that any underlying Indigenous property rights are extinguished or at least diminished to the extent of the grant. Since 2000, the granting of exclusive rights of access to water in the various States’ water legislation, has arguably also extinguished or at least diminished surviving Indigenous water property rights. Scant research into this impact suggests that the uncrystallised quantum of compensation that may be attributable as a result of the granting of such private access rights has been deftly underestimated by policy makers."
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AUTHOR: M Skitmore, J J Irons And Dr L A Armitage
TITLE: Valuation Accuracy And Variation: A Meta Analysis |Refereed|
KEYWORDS: "valuation, accuracy, variation, range, approximation."
ABSTRACT: "This paper provides a first order approximation of the accuracy of commercial property valuations for comparison with the ±5-10% threshold of tradition, convention and judicial acceptance. The nature of ranges is considered in relation to the uniform and normal probability density functions and the effects of bias considered. Summary statistics are examined for gross differences (differences between property valuations and subsequently realised transaction prices) recorded in the Investment Property Databank (IPD) database and significant yearly changes noted in both the means and standard deviations. A meta analysis of previous work is presented which shows all other results involving gross differences (GDs) to be reasonably consistent with statistics yielded by the IPD database. The results for the two main studies of net differences (GDs adjusted for the lag in time between valuation and transaction dates) also suggest yearly trends of a similar nature to the GDs. The role of intravaluer variability is also examined. The variability associated with the time lag is then estimated and applied to the IPD figures to give the approximation sought, suggesting ±5-30% to be a realistic range in place of ±5-10%."
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AUTHOR: Garrick Small And Angelo Karantonis
TITLE: A Profile Of Property Economists And The Maturation Of The Academic Discipline |Refereed|
KEYWORDS: "property education, academics, teaching,"
ABSTRACT: "Property economics as an academic discipline is now in a mature phase compared to its circumstances two decades ago. Early academics were drawn from industry or related disciplines where research histories were thin and doctorates were rare, however this imbalance is reversing. The current profile of academics in property economics is contrasted to the academic populations of selected universities. Internal promotion prospects and considered in contrast with other disciplines. Career paths are explored in terms of the necessity to move for advancement versus internal promotion. The research reveals a shift in emphasis in the makeup of property economics academics, though they still appear to exhibit differences to other disciplines."
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AUTHOR: Garrick Small
TITLE: Market Perfection And The Case Of Property: Methodological Shortcomings Of Economic Positivism
KEYWORDS: "market theory, institutional economics, valuation theory, market efficiency"
ABSTRACT: "The intersection between valuation practice and market theory is examined. Implications of the perfect market assumption are explored and applied to the pricing of land. Some emerging currents in economics and property are related to the problem of the market as a pricing mechanism for land. It is found that the formal assumption of market perfection, despite from being broadly recognised as extremely rare in practice, creates complex problems for the pricing of land. Whilst neoclassical economics is largely grounded on the assumption of perfect markets, developments such as institutional economics and the theory of monopolistic competition attempt to bridge the gap between economic theory and positive reality. The paper concludes that these approaches are positively superior but tend to ignore fundamental considerations that led to the original adoption of perfect markets as the basis for economic theory. Implications for valuation theory are examined as well as methodological implications for the direction of property research and the meaningful development of the body of knowledge of the discipline."
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AUTHOR: Garrick Small
TITLE: Motivations And Impacts Of Water Property In Nsw
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AUTHOR: Connie Susilawati And John Hayes
TITLE: Adding Spatial Location Attributes To Enhance Housing Transaction Data
KEYWORDS: "spatial science information, housing transaction data, location attributes, linkage, auction"
ABSTRACT: "Queensland Valuation and Sales System is the data base used by the Department of Natural Resources and Mines for the storage, update and retrieval of valuation and associated property and sales information. The system contains datasets that include property details, sales dates and sale prices. The records contain land area for house transactions but not for unit transactions. Furthermore, the system stores no information as to how the houses sold, by auction or private treaty, and no further housing attribute information is available from the system. Home buyers consider location as a major factor when deciding their preference to purchase in a specific area. This paper describes a study for adding location attributes to housing transaction records to enable spatial analysis of the housing transaction records. The study will utilise two major datasets of spatial attributes. The first set is the property location attributes such as orientation, height, aspect, frontage and street hierarchy. The second set is the property linkage defined as the proximity of a particular location and ease of access to major shopping centres, transportation nodes, schools and the Central Business District. This paper reports the process of creating a dataset of the spatial location for each housing transaction record and applying this attribute to the transaction record thereby improving the useability of this latter data for graphical display, querying and spatial analysis. This enhanced dataset will be shown to improve the quality of housing transaction data so as to facilitate housing transaction modelling and analysis. This paper will report also on the creation of the property linkage dataset and describe further study that utilises this second dataset to facilitate transactional analysis and its impact on the effectiveness of auction in housing transaction."
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AUTHOR: Connie Susilawati And Marinee Virojanapa
TITLE: Residents’ Preference On Utilising Green Space Facility |Refereed|
KEYWORDS: "residents’ preference, golf view property, golf course, North Lake, Queensland, masterplanned community development"
ABSTRACT: "Golf-view property involves a niche market in which target customers possess specific characteristics related to income, tenure, age and lifestyle. In general, a golf view property is usually more expensive than a land in the same neighbourhood but has no direct view. The scarcity of golf view land, better view and air quality are additional value added for the golf view property. It is also a life style choice. In contrary, golf course has not been utilised by local residents. Some of them are not playing golf. Moreover, some golfers did not like to play in their backyard. This paper analysed the resident’s purchase preference on utilising adjacent green space facility provided in a master-planned community development. This study also compares residents who live near park and lake at the same location. The mail survey to the local residents was conducted at North Lake, Queensland. Although residents nominated lifestyle as important motivation to purchase their golf-view property, more than 20 per cent of golf-view’s owners did not have any involvement with this sport. Moreover, golfers are not frequently utilise nearby golf course (North Lake) compare to other golf courses. Therefore, golf membership is not related to the proximity of golfers’ residents and it is not a key driver to make purchasing decision."
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AUTHOR: Paloma Taltavull De La Paz
TITLE: Housing Supply And Prices. Revising The Theory
KEYWORDS: "New housing supply in Spain, supply elasticity"
ABSTRACT: "House-building has been very intense in Spain throughout the last 15 years. It has generated an expansion in the residential stock that has been explained as the result of some demand forces playing at the same time and boosting residential market mechanisms during this period. However, in other European countries with similar tensions, the supply side has grown at a considerably lower rate than in Spain, even though residential prices have increased at a similar pace. The behaviour of the factors determining the supply has not been studied deeply. This paper evaluates the sensitivity of housebuilding in Spain between 1987 and 2004 with the aim of explaining its influence on price behaviour. Some different newsupply elasticity measures have been used by the literature. We calculate them for the whole Spanish housing supply using two different techniques, regressions methods on a base of dynamic panel data analysis and error correction models. The results show a supply elasticity of 0.86 for the whole Spanish new housing market. It also contrast that the value for the new supply elasticity change on time and space, so depend of the considered period, being lower during the first part of the 1990’s , and also the geographical territory analysed, being higher in those which housing markets are more active. Estimations also allow us to classify the markets between those where housing supply responds to the market-signals and those who don’t showing such type of market restrictions or interventions."
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AUTHOR: Ting Kien Hwa
TITLE: Stability Of Dividends And Ffos: The Case Of Reits In Malaysia
KEYWORDS: "dividends, FFOs, LPTs, Malaysia"
ABSTRACT: "Historically, the dividends of real estate investment trusts (REITs) contribute significantly towards the total return of REITs. This paper examined whether dividend returns of REITs/LPTs in Malaysia are affected by economic conditions and whether the level of dividends declared could be sustained in a weak economy. The research shows that the dividends declared by listed property trusts (LPTs) are found to be not stable as it is affected by the level of funds from operations (FFOs) attained by LPTs. FFOs are in turned affected by its sources of income. LPTs with investments of unstable market values e.g. shares which have declined in values is found to affect FFOs due to the need to account for its diminution of values in the accounts. The findings have an impact on investors who expect consistent dividend distributions from LPTs thereby affecting their investment allocations on LPTs."
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AUTHOR: Trello, Jesus
TITLE: The Quantification Of Social Benefit Derived From Housing Financing: An Application To The Needs Of Young Home Buyers In Madrid |Refereed|
KEYWORDS: "Social benefit, consumer surplus, financing, housing, quantification, methodology, young home buyers."
ABSTRACT: "The paper presents a methodology to quantify the increase in social benefit to be derived through the use of various home financing systems as well as the changes in social benefit caused by changes in the terms and conditions of housing financing. The social benefit will increase as the social price decreases. It is a benefit of a subjective nature. It is this subjectivity, which we are trying to quantify, in order to be able to rank the greater or lesser social well-being derived. The methodology is tested using data on the needs of young people for housing in the province of Madrid (Spain). The results obtained indicate that the methodology is a good tool to assist in decision making in the area of housing policy and to help governments reduce expenditure in this area."
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AUTHOR: Clive M J Warren
TITLE: The Future @ Work – Delivering Effective Corporate Real Estate
ABSTRACT: "The changing nature of the workplace is clearly shown in this paper which undertakes a comprehensive survey of Corporate Real Estate executives in Australia. The survey establishes a benchmark of attitudes to the office as an enabler of business and will form the basis for ongoing evaluation of changing attitudes to workplace provision. The paper highlights an expected increase in the need for flexible working environments while discussing the need to deliver not only cost efficient workplaces but effective, productive work environments."
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AUTHOR: Peter C. Wills
TITLE: Transaction Based Corporate Real Estate Management
KEYWORDS: "Corporate real estate, Outsourcing, CRE management, Gain-share"
ABSTRACT: "This paper will investigate the concepts of transaction based corporate estate management. The varying types/classes of corporate real estate will be reviewed both in the freehold and leasehold context. The role of outsourcing corporate real estate management will be investigated from both the corporation point of view and the outsource service provider point of view. The structures for providing management from CRE services sections will be analysed so that the concepts of the ‘win win’ scenarios can be seen. This will also involve the investigation of the concepts of cost centre and profit centre based CRE functions.To enable transaction based CRE management to be considered, the performance of CRE and CRE portfolios must be measured, so that overall advantages can be ascertained. This should increase shareholder value through cost savings as well astute management. It should also identify non-performing areas within the CRE portfolio. The conclusions will show that transaction based CRE management, like all business tools, must be used properly to achieve the desired results. Transaction based CRE may be viewed as a one-dimensional strategy, and if this is done it will lead to failure. It will be seen to be an evolving ongoing attempt to bring greater flexibility into the overall CRE management process."
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AUTHOR: Hao Wu, Jon Robinson And Richard Reed
TITLE: Economic Transition And Commercial Property Cycles In China |Refereed|
KEYWORDS: "Commercial property, cycles, economic transition, China, emerging markets"
ABSTRACT: "Drawn from a recently completed study, this paper aims at a better understanding of commercial property cycles in the transitional economy of China. It examines the behaviour of the property submarket system in China and considers structural changes in the socio-economic system as a primary factor in addressing the research problem. The study suggests that the underlying social and economic structure has greatly determined market behaviour. It finds that radical changes can alter the formal structure (the designed structure) of the market system, including the property market structure, but cannot alter the informal structure (i.e. the emergent structure) at the similar rate. As the study shows, cycles in the commercial property market in the economic transition is largely a key resulting feature of the continuous structural change both at formal and informal levels in a way that is often imbalanced and not always consistently changing together. The same situation also applies to the transformation of inner-city built form, which is featured by a delayed change of physical building stock against the space demand trend that is underpinned by the socio-economic transition. Put simply, there is a supply lag, mainly in the form of changing land use and building stock replacement, against economic change (the business cycle). This affects the level of effective demand for office space and hence becomes a major force in shaping current office cycles."
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