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Adams, A. T., P. M. Booth, and B. D. MacGregor. "Property Investment Appraisal." British Actuarial Journal 5, no. 5 (December 1, 1999): 955–82. http://dx.doi.org/10.1017/s1357321700000763.
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ABSTRACTThis paper considers the application of discounted cash flow (DCF) techniques to the analysis of the property investment market. The traditional method of property valuation is briefly outlined and its shortcomings highlighted. An alternative DCF procedure is derived to calculate the present value of a property investment. This method will be familiar to actuaries, but is not always used in property disciplines. The sensitivities of this formulation to changes in the force of real interest, force of real rental growth and force of inflation are derived. It is suggested how these formulae may be used for property investment appraisal and risk analysis. We conclude that DCF offers a more flexible and accurate means of estimating the value of a property, and that property valuers, financial economists and actuaries should work jointly to develop practical DCF methods. However, so long as traditional methods of valuation prevail, a rational investor must use both methods to identify mispriced property assets. There have been few property contributions to the actuarial literature in the United Kingdom; this paper is intended to build on the few previous papers and suggests directions for future work.
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Mclean, Simon. "Property investment appraisal." Journal of Building Appraisal 4, no. 4 (March 2009): 331. http://dx.doi.org/10.1057/jba.2009.7.
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Danazimi Jibril, Jibril, Zainab Toyin J, and . "Title Risk Identification Techniques in Valuation and Investment Appraisal." International Journal of Engineering & Technology 7, no. 3.30 (August 24, 2018): 70. http://dx.doi.org/10.14419/ijet.v7i3.30.18158.
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This study investigated the risk analysis in property valuation and investment appraisals in Nigerian estate firms, this was carried out through the risk identification techniques. Risk and uncertainty are the inherent part of the valuation and appraisal process. Self-administered questionnaire was employed using likert scaling to collect the data from 95 estate surveying and valuation firms, while the data was analyzed using descriptive statistic. The study revealed that the most peculiar risk to real estate valuation and investments is legal risk base on the ranking. Investment appraisal reports however indicated that sensitivity analysis is the most used technique. In view of the above, the certainty equivalent and Monte Carlos stimulation was recommended if all things are equal in respect of availability of data and a stable economic situation. The study identified legal risk is the major risk found in valuation and investment appraisal, thus the result indicated that, Surveyors in the study area have very little knowledge of risk and uncertainty as revealed in their reports. Finally it was recommended that, a lot need to be done on the level of awareness and understanding valuers toward incorporating risk and uncertainty in property valuation and investment appraisal.
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Devaney, Steven. "Measuring European property investment performance: comparing different approaches." Journal of European Real Estate Research 7, no. 1 (April 29, 2014): 112–32. http://dx.doi.org/10.1108/jerer-10-2013-0022.
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Purpose – Price indices for commercial real estate markets are difficult to construct because assets are heterogeneous, they are spatially dispersed and they are infrequently traded. Appraisal-based indices are one response to these problems, but may understate volatility or fail to capture turning points in a timely manner. This paper estimates “transaction linked indices” for major European markets to see whether these offer a different perspective on market performance. The paper aims to discuss these issues. Design/methodology/approach – The assessed value method is used to construct the indices. This has been recently applied to commercial real estate datasets in the USA and UK. The underlying data comprise appraisals and sale prices for assets monitored by Investment Property Databank (IPD). The indices are compared to appraisal-based series for the countries concerned for Q4 2001 to Q4 2012. Findings – Transaction linked indices show stronger growth and sharper declines over the course of the cycle, but they do not notably lead their appraisal-based counterparts. They are typically two to four times more volatile. Research limitations/implications – Only country-level indicators can be constructed in many cases owing to low trading volumes in the period studied, and this same issue prevented sample selection bias from being analysed in depth. Originality/value – Discussion of the utility of transaction-based price indicators is extended to European commercial real estate markets. The indicators offer alternative estimates of real estate market volatility that may be useful in asset allocation and risk modelling, including in a regulatory context.
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Ye, Xu. "Property Investment Appraisal (3rd edition)20081Andrew Baum and Neil Crosby. Property Investment Appraisal (3rd edition). Oxford: Blackwell 2008." Journal of Property Investment & Finance 26, no. 6 (September 26, 2008): 577–78. http://dx.doi.org/10.1108/14635780810908415.
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Mäki, Juha. "The role of investment property appraisal in European real estate companies." Journal of European Real Estate Research 13, no. 1 (February 7, 2020): 105–22. http://dx.doi.org/10.1108/jerer-11-2019-0038.
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Purpose This paper aims to examine the connection between appraisals of investment properties and earnings properties in companies from two perspectives: what kinds of companies employ the most reputable appraisers and how appraisers produce estimations. Design/methodology/approach The research uses annual reports of European Union (EU) publicly traded real estate companies and examines the period 2007-2016. Findings The contribution of this study lies in establishing that some indicators and features of real estate companies affect the choice of appraiser and also in illustrating differences in the results of property valuations. In short, smaller companies with weaker performance are less willing to use external valuation, and external appraisers produce more conservative estimations for investment properties. Practical implications The research produces beneficial information for investors and other stakeholders interested in the real estate industry. Originality/value This is the first novel study to examine the link between appraisals of investment properties and earnings properties in companies in detail.
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Shimizu, Chihiro. "Microstructure of asset prices, property income and discount rates in the Tokyo residential market." International Journal of Housing Markets and Analysis 10, no. 4 (August 7, 2017): 552–71. http://dx.doi.org/10.1108/ijhma-12-2016-0082.
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Purpose The purpose of this paper is to decompose and measure the microstructure of property investment returns for Tokyo’s residential property markets in as much detail as possible in comparison with office market. Design/methodology/approach Using enterprise value data for property investment trust companies composed of share prices available on capital markets, this study proposed a method of estimating property investment returns corresponding to changes in capital markets, and clarified the distortion in capitalization rate that are formed based on property appraisal prices. Findings The results for residential property showed that as building floor space increased, income and price increased while the discount rate decreased. In particular, a higher return could be obtained from office property than residential property by investing in larger-scale properties. Building age lowered asset price and income for both residential and office property, especially for residential property. Research limitations/implications In Japan, investors believe that investment returns are high for properties close to the city centre, relatively new properties and those with large design or floor space. Therefore, this study first measured how asset prices, income and asset price–income ratios that comprise property investment returns change based on differences in these property characteristics. Second, the reliability/distortion of information that can be observed on the property investment market was measured. Furthermore, there was a significant divergence between discount rates and risk premiums formed by asset or space markets versus capital markets. Practical implications The differences of discount rate and risk premium formed by asset markets versus capital markets indicate that appraisal prices have biases. Thus, when it comes to property investment decisions, it is essential to make active use not just of property investment returns based on appraisal prices formed by asset markets but also information formed by capital markets. Social implications A greater difference was generated in a shrinking market, suggesting that analysing property returns estimated on asset market information alone could lead to erroneous investment decisions. Originality/value This research is the first to use the enterprise value data from real estate investment trust companies composed of share prices available on capital markets for calculating discount rate and risk premium in property market.
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J. Liapis, Konstantinos, Dimitrios D. Kantianis, and Christos L. Galanos. "Commercial property whole-life costing and the taxation environment." Journal of Property Investment & Finance 32, no. 1 (January 28, 2014): 56–77. http://dx.doi.org/10.1108/jpif-08-2013-0049.
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Purpose – The main purpose of this paper is the incorporation of life-cycle costs (LCC) and whole-life costing (WLC) method and the taxation environment into the investment appraisal procedure for commercial real property projects. Design/methodology/approach – The paper initially presents the methodologies of LCC and WLC together with the NPV measure for the evaluation of real estate investments. These methods are incorporated into a decision-making model using mathematical approaches. The model is applied to a typical commercial property project (office building) in order to explore the significance of impacts from changes in structured variables and the taxation environment by introducing direct, indirect and property taxes in the evaluation of commercial real estate projects. Findings – Testing of the methodology on the Greek economic environment revealed that time, cost, the tax regime, the financial variables of funding and the monetary and fiscal environment in a commercial real property project are the main variables of net present value (NPV) of the investment. Practical implications – From the calibration of any impact from affected variables, decision-making aiding tools can be extracted for controlling the project throughout its entire life-cycle. Originality/value – An integrated WLC mathematical model for the investment appraisal of commercial property projects is introduced. The herein proposed methodology contributes to taxation policy and real estate theory in general and assists industry professionals in effective commercial property management and decision-making.
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Jagun, Zainab Toyin. "Risks in feasibility and viability appraisal process for property development and the investment market in Nigeria." Journal of Property Investment & Finance 38, no. 3 (April 6, 2020): 227–43. http://dx.doi.org/10.1108/jpif-12-2019-0151.
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PurposeThe feasibility and viability appraisal technique is becoming increasingly crucial in the planning systems, theory, applications and outputs for property development and project investments. This paper aims to account for the findings of the practices associated with risk in the feasibility and viability appraisal process. Also, it examines the need for a practical framework for conducting a feasibility and viability appraisal, which can be employed by estate surveyors and valuers in NigeriaDesign/methodology/approachThis study adopted purposive sampling techniques to administer 240 sets of questionnaires, out of which 210 sets were well-thought-out to be useable for the analysis after data screening. Statistical package for social sciences (SPSS), structural equation modelling (SEM) and analysis of movement structures (AMOS) were the main analytical tools used to carry out the reliability test, normality test, exploratory factor analysis, confirmatory factor analysis, measurement and structural model.FindingsThe analysis results indicated that the P-values of the various forms of concepts of risks in feasibility and viability appraisal process (preparation) for property development and the investment market was statistically significant: technological factor - 0.000; political factor- 0.000 and economic factor- 0.000. However, a non-significant effect was found with socio-environmental factors on the preparation of housing development appraisal with P-value 0.155, and that risk management is neither holistically implemented in the feasibility and viability appraisal process nor extensively taken into cognisance.Research limitations/implicationsThis paper reports the results of the practices among estate surveyors and valuers in regarding the risk associated in the preparation stages of the feasibility and viability appraisal processPractical implicationsThere are limited studies that suggest risk management factors in the appraisal reports for property development. Although previous studies have identified the risk factors, there is a lack of emphasis on management, which entails identification, assessment, monitoring and control. This study, therefore, recommends the incorporation of risk management into the feasibility and viability appraisal process implemented by estate surveyors and valuers. It is envisaged that the process will protect investors from the potential risk factors associated with investments in property development.Originality/valueThe study highlighted the need for practical or empirical research to be used to assess the significant risk factors that are needed to be reflected in the preparation stages of the feasibility and viability appraisal conduct of estate surveyors and valuers in Abuja, Nigeria.
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Agbloyor, Elikplimi Komla, Frank Kwakutse Ametefe, Emmanuel Sarpong-Kumankoma, and Vera Fiador. "Investment appraisal: Akwaaba university hostel projectInvestment appraisal: Akwaaba university hostel project." Emerald Emerging Markets Case Studies 11, no. 2 (August 31, 2021): 1–38. http://dx.doi.org/10.1108/eemcs-01-2020-0025.
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Learning outcomes After completing this case, students should be able to: identify and compute relevant cash flows in relation to a real estate project and compute the net present value (NPV). Determine the target return or cost of capital (by looking at historical economic indicators). Design or formulate a sensitivity analysis to determine the drivers of the project value. Evaluate real estate and other investments taking qualitative and quantitative factors into consideration. Demonstrate the computation of a break-even rate to determine the minimum or maximum revenue or cost required for a project to be viable. Case overview/synopsis This case study is about the Golden Beak Securities Pension Fund that wanted to invest in a Hostel Project in one of the universities in Ghana. Most universities in Ghana faced an acute shortage of on-campus accommodation. Also, the Government of Ghana, in 2017, implemented a programme to make Senior High School in Ghana free. This was expected to increase the number of students who will enter the existing universities. The project was therefore seen as strategic, as it would help ease the pressure of on-campus accommodation while providing diversification for the pension fund. As part of the investment committee’s (IC) quest to improve the skill set available to it, especially in relation to real estate investments, Esi Abebrese was appointed as one of the members of the IC of GSB. Her main task was to collect information on key macroeconomic variables, as well as granular information on project costs and revenues and conduct investment appraisal. Esi was scheduled to make a presentation to the IC on the 15th of October 2019 following which the Committee will debate and make a decision. The project had an estimated cost of GH¢52m with a total number of 3,424 student beds and ancillary facilities. Undertaking the project required moving funds from investments in money market securities with one of the banks in Ghana. The investments in the money market securities were currently yielding about 16% a year. The determination of the cost of capital was critical and Esi and Nana eventually settled on a long-term weighted average cost of capital of 14%. This was after considering the trend of inflation, monetary policy rates, treasury rates, stock market returns and a report on returns on commercial real estate properties in Ghana. An exit capitalisation rate of 20% was also estimated for the purposes of determining the value of the property at the end of the investment horizon. Esi also obtained estimates of cost and revenue for the project and proceeded to carry out a feasibility analysis on the project. This consisted of an NPV analysis and sensitivity analysis on various factors to determine the drivers of the project value. The IC had to take several factors (both quantitative and qualitative) into consideration before making a decision. Esi believed that these factors included the diversification of the fund’s assets, the return on investment, potential oversupply of hostel accommodation, the social responsibility of providing student accommodation and the impact of any prolonged shutdown of the university. Complexity academic level Masters/advanced undergraduate. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes. Subject code CSS 1: Accounting and Finance.
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Freund, Steven, Frank E. Andrews, and Dev Prasad. "Mountain View Mobile Home Park." Journal of Business Case Studies (JBCS) 5, no. 5 (June 24, 2011): 79. http://dx.doi.org/10.19030/jbcs.v5i5.4724.
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This reality case pertains to one of the largest mobile home parks in the Carolinas. In 2003, the owner of the Mountain View & Vista Mountain Mobile Home Park passed away. The estate executrix hired an appraisal company to value the property. The body of the case presents three standard methods for valuing the property based on the actual appraisal report: the Cost Approach, the Income Approach, and the Sales Comparison Approach. The case then introduces the Investment Analysis Approach, which models future after-tax cash flows, considers the method of financing, and allows for year to year changes in revenues and expenses. This fourth technique complements the valuation provided by the formal appraisal. One suggested teaching strategy is to split the class into sets of matched buyers and sellers to extract data from the case and perform their independent Investment Analysis. The groups can then take opposite sides as buyers and sellers and try to negotiate a mutually agreeable price for the property.
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Trembecka, Anna. "Analysis of geodetic and legal documentation in the process of expropriation for roads. Krakow case study." Geodesy and Cartography 62, no. 1 (June 1, 2013): 67–84. http://dx.doi.org/10.2478/geocart-2013-0004.
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Abstract Amendment to the Act on special rules of preparation and implementation of investment in public roads resulted in an accelerated mode of acquisition of land for the development of roads. The decision to authorize the execution of road investment issued on its basis has several effects, i.e. determines the location of a road, approves surveying division, approves construction design and also results in acquisition of a real property by virtue of law by the State Treasury or local government unit, among others. The conducted study revealed that over 3 years, in this mode, the city of Krakow has acquired 31 hectares of land intended for the implementation of road investments. Compensation is determined in separate proceedings based on an appraisal study estimating property value, often at a distant time after the loss of land by the owner. One reason for the lengthy compensation proceedings is challenging the proposed amount of compensation, unregulated legal status of the property as well as imprecise legislation. It is important to properly develop geodetic and legal documentation which accompanies the application for issuance of the decision and is also used in compensation proceedings.
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Crosby, Neil. "The Practice of Property Investment Appraisal: Reversionary Freeholds in the UK." Journal of Property Valuation and Investment 9, no. 2 (February 1991): 109–22. http://dx.doi.org/10.1108/14635789110030840.
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Scadden, R. W. "Property Investment Appraisal. By Andrew Baum & Neil Crosby (Routledge, London)." Journal of the Institute of Actuaries 116, no. 1 (June 1989): 189. http://dx.doi.org/10.1017/s0020268100036520.
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Yong, Jaime, and Anh Khoi Pham. "The long-term linkages between direct and indirect property in Australia." Journal of Property Investment & Finance 33, no. 4 (July 6, 2015): 374–92. http://dx.doi.org/10.1108/jpif-01-2015-0005.
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Purpose– Investment in Australia’s property market, whether directly or indirectly through Australian real estate investment trusts (A-REITs), grew remarkably since the 1990s. The degree of segregation between the property market and other financial assets, such as shares and bonds, can influence the diversification benefits within multi-asset portfolios. This raises the question of whether direct and indirect property investments are substitutable. Establishing how information transmits between asset classes and impacts the predictability of returns is of interest to investors. The paper aims to discuss these issues.Design/methodology/approach– The authors study the linkages between direct and indirect Australian property sectors from 1985 to 2013, with shares and bonds. This paper employs an Autoregressive Fractionally Integrated Moving Average (ARFIMA) process to de-smooth a valuation-based direct property index. The authors establish directional lead-lag relationships between markets using bi-variate Granger causality tests. Johansen cointegration tests are carried out to examine how direct and indirect property markets adjust to an equilibrium long-term relationship and short-term deviations from such a relationship with other asset classes.Findings– The authors find the use of appraisal-based property data creates a smoothing bias which masks the extent of how information is transmitted between the indirect property sector, stock and bond markets, and influences returns. The authors demonstrate that an ARFIMA process accounting for a smoothing bias up to lags of four quarters can overcome the overstatement of the smoothing bias from traditional AR models, after individually appraised constituent properties are aggregated into an overall index. The results show that direct property adjusts to information transmitted from market-traded A-REITs and stocks.Practical implications– The study shows direct property investments and A-REITs are substitutible in a multi-asset portfolio in the long and short term.Originality/value– The authors apply an ARFIMA(p,d,q) model to de-smooth Australian property returns, as proposed by Bond and Hwang (2007). The authors expect the findings will contribute to the discussion on whether direct property and REITs are substitutes in a multi-asset portfolio.
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Akinbogun, S. P., O. P. Binuyo, and O. T. Akinbogun. "A Comparison of Monte Carlo Simulation and Discounted Cash Flow Investment Appraisal Techniques Using an Office Building in Akure, Nigeria." July 2017 1, no. 2 (July 2017): 299–308. http://dx.doi.org/10.36263/nijest.2017.02.0043.
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Every rational investor aimed to secure an optimum return from an investment at certain level of risk. However, the factors that affect the realization of the expected return are not known with certainty. Therefore, the reliability of a single point estimate for investment decision is debatable particularly when the likelihood of realizing the expected return is crucial to the investor. This study aimed at examining a better method of analysing the uncertainty in property investment rather than the use of the single point estimate formula. We collected a set of historic data from a multi-tenanted office complex in Akure to carry out the investment analysis using Monte Carlo simulation and Discounted Cash Flow Technique. The results from the study were compared and revealed that the single point estimate accounted for a huge level of risk as probability of realizing the expected return is unknown. The Monte Carlo simulation offers a more robust opportunity for a measured investment decisions by providing a probability of realizing different level of the expected returns. The study concludes that it is difficult to make a smart investment decision on a single point estimate. It therefore recommends the use of Monte Carlo simulation for property investment analysis for a more realistic return.
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Nwobodo, L. O., and H. C. Inyiama. "Strategic Management of Intellectual Property: R&D Investment Appraisal Using Dynamic Bayesian Network." International Journal of Computer Applications Technology and Research 4, no. 9 (August 24, 2015): 640–47. http://dx.doi.org/10.7753/ijcatr0409.1002.
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Morri, Giacomo, and Alessandro Baccarin. "European REITs NAV discount: do investors believe in property appraisal?" Journal of Property Investment & Finance 34, no. 4 (July 4, 2016): 347–74. http://dx.doi.org/10.1108/jpif-09-2015-0068.
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Purpose – The purpose of this paper is to analyse the NAV discount of European REITs listed in France, the Netherlands and the UK between 2003 and 2014, considering elements of both “rational” and “noise trader” approaches. Design/methodology/approach – The analysis examines the hypothesis that discounts (premiums) are the result of leverage, size, liquidity, risk, performance, investment activity and sentiment. The regressions are initially run against the traditional NAV discount, subsequently using the unlevered NAV discount measure introduced by Morri et al. (2005) in order to clean out the bias generated by the level of leverage. The NAV discount is then adjusted for investor sentiment (appraisal reduction) with the aim of better identifying firm-specific factors, considering distortions induced by sentiment. Findings – Higher liquidity commands lower discounts for French REITs, while Dutch and British REITs, which trade in markets characterized by a higher number of average daily transactions, do not seem to feature discounts resulting from liquidity. For all three samples, operational risk and performance are significant in explaining the NAV discount, the former having a positive relationship with the discount, and the latter a negative one. When measured using the average sector discount, sentiment has a profound effect on the discount, accounting alone for 10-15 per cent of the explanatory power of the model. Practical implications – REITs listed in different markets behave differently. When the discount is adjusted in order to remove the bias resulting from the level of debt, the relationship between leverage and the unlevered discount becomes less pronounced in all cases. Originality/value – The paper considers a new approach to NAV discount puzzle that takes into account market sentiment and appraisals.
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Thanasi (Boçe), Marsela. "Hedonic appraisal of apartments in Tirana." International Journal of Housing Markets and Analysis 9, no. 2 (June 6, 2016): 239–55. http://dx.doi.org/10.1108/ijhma-03-2015-0016.
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Purpose The approved methodology of property valuation in Albania evaluates the reference property prices based on the average contractual price of properties sold and takes into account only factors such as price, square meters of living and location of property. Simple method is the one used on evaluating the reference price for a group of properties with similar characteristics. The purpose of this study is, by building a hedonistic pricing model for apartments in Tirana, to prove empirically that in addition to location, there are other characteristics that affect the value of apartments. Design/methodology/approach The capital city is chosen as a case study for the construction of a hedonistic pricing model. In the database were included detailed characteristics of 1,421 apartments. Multiple regression analysis was chosen in this model as a method to test hypotheses about the causal relationship between house value Y and independent variables XS, representing the characteristics of the property. Population equation parameters β0, β1, β2 […], βn. were evaluated by the ordinary least squares method. Selection of α-standard is 5 per cent, taking into account the significant number of observations and the degree of regression freedom. Findings Based on this study, it was proved empirically that the characteristics of the apartments as square meters of living, number of rooms, access to parking, furniture, view and surface of living affect their price. As a literature review showed, location is the most important variable that affects the value. Results showed that the marginal effect that the number of rooms has on the apartment value depends on the square meters of living of the apartment. In the same line, the effect of the square meters of living on value depends on the square meters, as the relationship between these variables is nonlinear and depends more on the number of rooms. Research limitations/implications It was impossible to find the information on property sales contracts. That is why this study was oriented toward the market and took into account the properties offered for sale at one of the biggest real estate agency “Çelësi”. More accurate information regarding properties characteristics could be obtained. The information was limited and depended on the best apartment characteristics that potential sellers wanted to advertise. On the other side, contractual sales price is oriented by the reference price, so, the applied methodology has resulted in better evaluations of real estate prices, which reflect the market price. Practical implications This study is conducted as an applicable research. After analyzing the property valuation system in Albania, the study recommends the change of the method used on apartment valuation. Improvement of the property valuation system requires first of all creation of a complete and updated database for all real estate sales. Social implications Property valuation is a very important function of the land administration system which directly affects people’s life. Property evaluation for different purposes like tax evaluation, compensation and expropriation is a process that must be designed using an equal, transparent and well-accepted methodology by all. Promotion of property valuation system development is helpful to various interest groups in society, as it can reduce the risk of investment in this sector and encourages lower rates of interest on loans. Originality/value To the author's knowledge, the hedonic model is not applied on the Albanian housing market, thus providing encouragement to deepen the study in this regard. The study is original and has a very important impact on policymakers to change the actual property valuation methodology to obtain more accurate property values.
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Chakraborty, Prabal. "Indian Pharmaceuticals Industry in Global Scenario: An Appraisal." Journal of Health Management 22, no. 3 (August 6, 2020): 424–29. http://dx.doi.org/10.1177/0972063420937939.
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Today, the Indian pharmaceuticals industry is recognised the world over due to the quality and cost-effectiveness of its products. At present, globally it is one of the fastest-growing industries and contributes 2.4 per cent value wise and 10 per cent volume wise globally. India alone accounts for 20 per cent of global exports in generics. In 2016, the Indian pharma industry exported USD16.89 billion and is expected to touch USD40 billion by 2020. The present generics market has immense potentiality for foreign direct investment (FDI) inflows, and worth USD14.53 billion of FDI inflows came in between April 2000 and December 2016. We have witnessed that Indian pharma companies go for joint ventures with multinational companies, make strategic alliances and co-promotions, contract research and manufacturing services, export, acquisitions and mergers, focus on new markets other than the USA and Europe, buy offshore plants and increase stakes in other companies. India is also becoming an attractive investment for the clinical trials market. The objective of this paper is to analyse the Indian pharmaceuticals industry—opportunity and threats, strategies of the Indian companies particularly after trade-related aspects of intellectual property rights (TRIPS).
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Mei, Bin. "Investment returns of US commercial timberland: insights into index construction methods and results." Canadian Journal of Forest Research 47, no. 2 (February 2017): 226–33. http://dx.doi.org/10.1139/cjfr-2016-0186.
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This study compares different index construction methods of timberland investment returns and evaluates the resulting indices by various asset pricing models. In addition to various NCRIEF indices, I include a de-smoothed index that attempts to restore property market values, a transaction-based index that tracks ex post transaction prices, and a pure-play index that is based on unleveraged returns of public timber firms and only has exposures to the timber segment. The findings are that the appraisal-based timberland index has higher mean and lower volatility compared with the transaction-based timberland index, separate accounts outperform comingled funds in the private timberland market, the pure-play timberland index exhibits higher return and lower risk than the corresponding portfolio of public timber firms, and abnormal performance of timberland asset becomes less significant after controlling for the appraisal smoothing or by using real transaction data. These results can help timberland investors better benchmark their financial performance.
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PAVEL'EVA, Ella Yu. "Private investment in residential real estate viewed through personal behavioral traits of the agent: Evidence from St. Petersburg." Finance and Credit 27, no. 3 (March 30, 2021): 627–48. http://dx.doi.org/10.24891/fc.27.3.627.
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Subject. Professional training of decision-makers influences investment decision private or individual investors make. Decisions on real estate investment are subject to biased consumer preferences resulting from investment or consumer interests. Hence, choosing a residential real estate item to purchase/rent, future buyers have their own psychological and emotional opinion on values. Objectives. I provide my own interpretation of residential real estate appraised by the private investor, considering their psychological and emotional traits. Methods. I applied general scientific and special methods of research to study the residential real estate appraisal, such as the retrospective, systems and functional-structural analysis, observation, classification, instrumental techniques for grouping, sampling, comparison and generalization, evolutionary and dynamic analysis, surveys and sorting out of the findings. Results. Private investors make choices, referring to their own personal trains, such as behavior, personal beliefs and values. I suggest considering the market segmentation on the basis of value-based method and evaluating the given segment. I tested the technique, referring to the Saint-Petersburg market of real estate. Various social groups of private investors were found to choose different residential properties and have different priorities in choosing an apartment for purchase or rent. They have greater expectations about the quality of rented housing than a residential property item to be purchased for their own use. Conclusions and Relevance. I investigated the relationship of investors’ behavior and investment lucrativeness of a residential property item. I discovered key aspects of lucrativeness for investors and provide guidelines for coordination of investors’ choices in line with their personal preferences.
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Sherris, Michael. "Leveraged Leasing: An Example of the use of Investment Appraisal Techniques." Journal of the Staple Inn Actuarial Society 30 (December 1987): 97–115. http://dx.doi.org/10.1017/s0020269x00010094.
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The origins of leveraged leasing are the trust arrangements used in the 1870's in the United States of America by railroad companies to finance the acquisition of rolling stock (Fritch, 1977, p. 98). A trust was established to purchase the equipment. The trustee issued trust certificates to investors who provided the funds for the equipment acquisition. The trust certificates provided for the repayment of principal and interest at specified dates. The trust then leased the equipment to the railroad company and the rental paid by the railroad company was used to repay the trust certificates as they fell due. These arrangements were in reality conditional sale agreements and not leveraged leases. Leveraged leasing as we know it today was introduced in the U.S.A in 1963 after the Comptroller of the Currency permitted national and state chartered banks to own and lease personal property (Weston, 1983, p. 271). The arrangement was used initially by railroad and airline companies to finance the acquisition of large items of capital equipment. Companies within capital intensive industries could not absorb the tax benefits of ownership whereas the banks could. Leveraged leasing meant that the banks owned the equipment and claimed depreciation and other tax deductions associated with ownership. These benefits were passed onto the railroad companies through lower rentals which reflected the value of these taxation benefits.
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Ogunbayo, Oyeronke Toyin, Adedayo Ayodeji Odebode, Joseph Bamidele Oyedele, and Oluwafemi Timothy Ayodele. "The significance of real estate development process analysis to residential property investment appraisal in Abuja, Nigeria." International Journal of Construction Management 19, no. 3 (January 24, 2018): 270–79. http://dx.doi.org/10.1080/15623599.2017.1423164.
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Olapade, Daramola Thompson, and Abel Olaleye. "Factors affecting accessibility to property data in an opaque market." Property Management 37, no. 1 (February 18, 2019): 82–96. http://dx.doi.org/10.1108/pm-01-2017-0004.
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Purpose With a focus on Lagos property market, the purpose of this paper is to examine the factors that influence accessibility to data for valuation and investment analysis in Nigeria. This was with a view to improving accessibility to property data in the market, thereby enhancing investment appraisal practice. Design/methodology/approach Primary data utilized for the study were sourced through the use of questionnaire administered on property practitioners (referred to as estate surveying and valuation (ESV) firms) in Lagos property market. A total of 190 ESV firms were selected using stratified random sampling based on their geographical location. Relative significance index (RSI), frequency distribution and principal component analysis (PCA) were employed for data analysis. Findings A total of 19 factors were identified as affecting accessibility to data. Confidentiality attached to property data by practitioners was ranked as the most significant factor with RSI of 0.81. The next three factors were lack of cooperation within members of professional body (0.79), accuracy of data (0.76) and duty of care to client (0.75), while the least ranked factor was duplication of data set (0.63). All the 19 variables were further grouped into six principal factors using PCA, namely, economic, attitudinal, ethical, legal, administrative and technical factors; with each factor explaining the following variance, 16.75, 16.1, 13.64, 12.78, 10.51 and 7.95, respectively. Practical implications The paper’s results will enable stakeholders to address the challenges to data accessibility in Lagos property market and similar opaque markets elsewhere thereby enhancing property data accessibility and investment analysis. Originality/value The paper is an attempt to examine the factors affecting accessibility to data identified in different studies holistically together in a single study and from the perspective of an emerging property market like Nigeria.
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Jagun, Zainab Toyin, Dzurllkanian Bin Daud, and Salfarina Binti Samsudin. "Risk in Property Appraisal Report: A Perception of Estate Surveyors and Valuer in Nigeria." Journal of Computational and Theoretical Nanoscience 17, no. 2 (February 1, 2020): 814–19. http://dx.doi.org/10.1166/jctn.2020.8723.
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Risk analyses are necessary for many forms of investment; therefore, it is vital for Estate Surveyors and Valuers to link and account for these risks explicitly to clients by incorporating more detailed risk analysis techniques to the present appraisal techniques used in order to guard their clients against the effects of instability in the expected outcome of their development. Data collected amongst 90 estate firms in phase III Abuja revealed that only few Estate Surveyors and Valuers firms have carried out the feasibility and viability appraisal in Abuja metropolis in the past 20 years. Analyses of data collected were made using frequency counts, percentage tables and Mean Item Scores, based on 5 points Likert scale with spearman ranking in descending order. From the study, the result shows the significant risk provided for are political, economic, and legal risk, while sensitivity analysis was the most preferred risk analysis technique used by Estate Surveyors and Valuer, the research work also revealed that the more complex the method of analysis, the lower the usage. Monte Carlos technique is recommended to be a suitable method that Estate Surveyors and Valuers can use to report risk explicitly to clients.
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Hui, Eddie Chi Man, Ka Hung Yu, and David Kim Hin Ho. "OFFICE PRICE INDEX LAGGING IN SINGAPORE AND HONG KONG." International Journal of Strategic Property Management 11, no. 1 (March 31, 2007): 33–46. http://dx.doi.org/10.3846/1648715x.2007.9637559.
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Price discovery of real estate investment has been getting lots of attentions from researchers and it is generally believed that lagging errors exist in appraisal‐based returns of commercial real estate investments, in comparison to other investment instruments traded in the stock market. Due to fewer transactions in the commercial real estate market, it is reasonable to notice a difference in the handling of current market information. By introducing two study approaches along with a test case using Singapore's data, this paper explores the extent of lagging in Hong Kong's commercial (office) real estate values, in a State Space Model with Kaiman filter. The findings first suggest that whether appraisal‐based indices overstate or understate true values lies in the economy condition at the time. Then, commercial real estate values in Hong Kong are about three months behind the stock market property indices. Also, as indicated by the findings, data collection/selection bias may render a de‐lagged index not as efficient as it is supposed to be. This paper provides a different perspective on price discovery and the process of de‐lagging property values. Biurų kainų indekso atsilikimas Singapūre ir Honkonge Santrauka Investicijų į nekilnojamąjį turtą kainos mokslininkus itin domina. Dažnai manoma, kad, palyginti su kitais akcijų biržoje siūlomais investiciniais instrumentais, investicijų į komercini nekilnojamąjį turtą grąža vertinama klaidingai dėl atsilikimo. Kadangi komercinio nekilnojamojo turto rinkoje sandoriu sudaroma mažiau, verta pabrėžti, kaip skirtingai tvarkoma aktuali rinkos informacija. Pristatant du tyrimo būdus kartu su atvejo tyrimu pagal Singapūro duomenis, šiame darbe, remiantis būsenų erdves modeliu ir naudojant Kalmaro filtrą, nagrinėjamas Honkongo komercinio nekilnojamojo turto (biuru) verčiu atsilikimas. Išvados pirmiausia rodo, kad tai, ar vertinimu pagristi indeksai padidina ar sumažina realias vertes, priklauso nuo esamu ekonominiu sąlygų. Be to, komercinio nekilnojamojo turto vertes Honkonge nuo akcijų rinkoje naudojamu nuosavybes indeksu atsilieka apie tris mėnesius. Išvados rodo ir tai, kad dėl šališko duomenųrinkimo (atrankos), neatsiliekantis indeksas gali būti ne toks efektyvus, kaip turėtu būti. Šiame darbe pateikiamas kitas kainų nustatymo būdas ir aprašomas nuosavybes vertes atsilikimo panaikinimo procesas.
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Mohd, Edie Ezwan. "A Framework of Building and Locational Characteristics Ranking for Purpose-built Offices in Malaysia." Journal of Education and Vocational Research 4, no. 3 (March 30, 2013): 69–76. http://dx.doi.org/10.22610/jevr.v4i3.102.
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The development of purpose-built office market in Malaysia is primarily resolved by a supplydemand market. Since the office market in Malaysia has displayed significance improvement due to increasing level of competitiveness, many characteristics of purpose-built office have appeared and become prominent during the process of assessment. These characteristics were generally used as indicators in property valuation, building performance as well as office market appraisal. Based on these characteristics, property market participants can evaluate their property proficiently based on their requirements, especially in decision making during business planning, investment or property management. Technology growth and national policy also gave contribution factors on revealing newly characteristics of purpose-built office such as green building, intelligent building and sustainable development model. The purpose of this article is to identify suitable characteristics of purpose-built office that can be used in Malaysia. Integral to achieving this objective, exploration on purpose built office characteristics in a global and local context will be reconsidered. As a result, a building and locational framework of purpose-built office's characteristics in Malaysia will be diagnosed and verified appropriately.
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Kuethe, Todd. "The risk and return of farm real estate and the “bad data problem”." Agricultural Finance Review 76, no. 1 (May 3, 2016): 140–50. http://dx.doi.org/10.1108/afr-11-2015-0049.
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Purpose – The purpose of this paper is to explore the consequences of appraisal smoothing in the estimation of the risks and returns of farm real estate. It examines the degree to which the risk and return characteristics of farm real estate are an artifact of the methods used to measure aggregate property values. Design/methodology/approach – A multifactor asset pricing model is estimated using farm real estate returns in a manner consistent with prior research, as well as using farm real estate returns calculated using two synthetic unsmoothing procedures developed in the real estate finance literature. Findings – The model suggests that unsmoothed farm real estate returns exhibit characteristics that differ from those suggested by prior research. The unsmoothed returns suggest a stronger correlation with economy wide investment risks. Originality/value – This is the first study to evaluate the impacts of appraisal smoothing in a farm real estate context. It provides a simple framework for addressing many of the pricing anomalies associated with farmland.
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Igbinosun, Betha. "Security Interests in Personal Property and the Nigerian Secured Transactions in Movable Assets Act 2017: An Appraisal." Journal of African Law 64, no. 3 (August 3, 2020): 357–71. http://dx.doi.org/10.1017/s0021855320000157.
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AbstractIn a bid to improve financial inclusion and access to affordable debt finance by micro, small and medium enterprises (MSMEs), Nigeria's Secured Transactions in Movable Assets Act (STMA) was enacted on 31 May 2017 to regulate the creation, perfection and realization of security interests in movable assets. This article critically examines certain provisions of the STMA, including the potential issues that may arise due to the dual registration system now available under the act and that hitherto existing under the Companies and Allied Matters Act, as well as the implications of the STMA on traditional pledge transactions. It concludes that, while the STMA is an impressive attempt at enabling MSMEs to leverage their assets into capital for investment and expansion, it fails to procure a harmonized legal framework for secured transactions in personal property or to facilitate their effective use as collateral to improve access to credit by businesses in Nigeria.
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Ogunbayo, Oyeronke T. "Respondents’ perception of Risk Factors on Residential Property Development in Abuja, Nigeria." Journal of Construction Business and Management 3, no. 1 (February 12, 2019): 18–26. http://dx.doi.org/10.15641/jcbm.3.1.588.
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Significant risk factors such as social, technological, economic, environmental and political in the timing development, minimization of cost and expected return as they influence the successful delivery process of residential property development were investigated in this study towards enhancing real estate development decisions. This is expedient because it has been argued that the link between project success criterions determines a successful project delivery. Data were obtained from members of Real Estate Developers Association (REDAN) in Abuja through the use of a self-administered questionnaire. The respondents were asked to rate the influence of risk factors on residential property development parameters, and the data were computed using logistic regression analysis. The study revealed that real estate developers were more concerned with the influence of economic and technological risk than other sources of risk. Also, the statistical effects were computed through logistic regression analysis. It was explained by significant value (p<0.05) which depicts the likelihood of the risk factor which could either be positive or negative, as explained by beta (β). The findings revealed the effect of economic risk factors in timing development to be (β=1.833, p<0.05). Also, the effect of technological risk factors to influence development cost were found to be (β=--.187, p<0.05) while the effect of economic risk factors on return was found to be (β=1.026, p<0.05). The main contribution of the study to the body of knowledge is developing a risk factors assessment technique for practitioners and academia to assess the residential property development performance as related to timely completion, cost and returns to enhance the need to develop competence in managing and minimizing the effect of risk factors on the residential investment appraisal.
Keywords: Development appraisal, Expected return, Profit maximization, Residential property, Risk analysis, Time.
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Roubi, Sherif. "Towards a transaction-based hotel property price index for Europe." Journal of Property Investment & Finance 33, no. 3 (April 7, 2015): 256–81. http://dx.doi.org/10.1108/jpif-09-2013-0053.
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Purpose – The purpose of this paper is to fill an existing gap in the field. A transaction-based hotel price index for Europe is constructed to provide a true measure for hotel real estate performance. The index will enable investors enhance investment decisions in many ways: to assess individual property performance; to make an objective decision about where to invest and in which property type; to assess the relative performance of hotel assets to all other sectors and consequently reach optimal funds allocation decisions. This will allow investors to time their acquisitions/disposals according to the hotel property cycle. Design/methodology/approach – Data include 495 hotel property transactions in Europe during the period between 2004 and 2013. Transaction prices and property characteristics were collected from a variety sources published by hotel agents and consultants, property magazines, newspapers, tourist board, individual property and hotel association registers and web sites. Data include property name, sale price, size, time of sale, location, buyers and sellers. A hedonic pricing model is developed where the transaction price is regressed on the different characteristics. The index is calculated by taking the anti-logs of regression coefficients of the year index. Findings – This paper claims that the hotel property price index (HPPI) portrays a more realistic picture of what happened to hotel property prices in 2008 showing a single digit negative growth vs the hotel valuation index which reports a double digit negative growth rate in European hotel prices during the same year. The real impact of recession showed on hotel property prices in 2009. HPPI shows a crash in hotel property prices by -23.7 per cent in 2009. The year 2011 was marked by more sales transacted through administrators and a looming double-dip recession. Unlike appraisal-based indices, HPPI does not suffer from sticky valuation issues and is not desensitise from distressed properties. Therefore, it was more volatile to distressed situations throughout the period between 2011 and 2013. Research limitations/implications – Results of this study should be considered with caution. There are limitations associated with transaction data including incompleteness or inaccuracies regarding price data, financing information for each deal, property tenure, and property characteristics. Practical implications – This work has successfully developed an HPPI for hotel property in Europe. This paper paves the way for transaction-based indices that are more volatile than existing appraisal-based indices. This represents a significant development in tracking price movements of hotel properties in Europe. The index has potential to support research and forecasting of the hotel property cycles. Originality/value – This paper fulfils an identified need to track hotel property prices and timing the hotel property cycle.
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Ataguba, Joseph Obaje. "Synthesis of Short-Cut DCF Appraisal and Spreadsheet Iteration of Freehold Rental Growth Rates Across Specific Valuation Epochs." Real Estate Management and Valuation 29, no. 2 (June 1, 2021): 52–70. http://dx.doi.org/10.2478/remav-2021-0013.
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Abstract While the use of simple deterministic models to calculate rental value growth (RVGrowth) rate of reversionary freeholds across epochs prior to upward rent review appears illusive, literature evidence of the synthesis between short-cut DCF valuation and Solver tools in a spreadsheet does not constitute an exhaustive list of solutions. This study examined alternative spreadsheet and iteration tools that can determine RVGrowth rate of freehold investment properties across rent review epochs. With recourse to a hypothetical case of a freehold investment property, this experimental study identified the mathematical composition of RVGrowth in an explicit DCF framework, performed short-cut DCF Valuation and equivalent yield calculation at specific epochs prior to and including the full reversion; as well as using Goal Seek to calculate RVGrowth across all epochs prior to- and including the full reversion. Excel® Solver and Goal Seek, as well as the graphing/root-solving tool in Kyplot® were found to feasibly produce identical results for RVGrowth rate. This is among the limited studies that identified and researched the veracity of alternative tools for RVGrowth rate iteration. The value of this study is the awareness of alternative analytical tools avail freehold investors who desire knowledge of RVGrowth rate when making purchase-, hold-, and sales decisions.
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Talalova, L. N., Chu Thanh Hang, and A. V. Morozova. "Consequences appraisal on India’s opting out of the Regional Comprehensive Economic Partnership Agreement." Vestnik Universiteta, no. 6 (August 7, 2021): 129–34. http://dx.doi.org/10.26425/1816-4277-2021-6-129-134.
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The political and economic context for India based on the results of the Regional Comprehensive Economic Partnership Agreement (RCEP) signed in November 2020 is considered. The benefits of strengthening economic cooperation for the participating countries from its signing are characterized. The hypothetical advantages for India in the case of its entry into RCEP are analyzed. In connection with country’s opting out of RCEP the authors have highlighted three segments of reasons for studying (political, legal and economic) that caused such India’s decision. Among the political reasons for India’s opting out of RCEP the problem of the Indo-Chinese border conflict over disputed territory escalating is emphasized. Among the legal reasons that determined opting out of the treaty, the issues of investment policy and intellectual property outside the World Trade Organization frameworks are noted. The economic reasons offset the benefits of RCEP for India are investigated. The connection between all three segments of causes is demonstrated. The experts’ forecasts is evaluated for India’s entry into third place in the world economy in terms of the gross domestic product contribution and the prerequisites for this are studied. It is concluded about the possibility of achieving the goal if a number of conditions are met and a set of necessary measures is carried out.
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Mosallaeipour, Sam, Seyed Mahdi Shavarani, Charlotte Steens, and Adrienn Eros. "A robust expert decision support system for making real estate location decisions, a case of investor-developer-user organization in industry 4.0 era." Journal of Corporate Real Estate 22, no. 1 (November 17, 2019): 21–47. http://dx.doi.org/10.1108/jcre-03-2019-0019.
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Purpose This paper aims to introduce a practical expert decision support system (EDSS) for performing location analysis and making real estate location decisions in the organization’s facility and real estate management (FREM) department in presence of several decision criteria, under risk and uncertainty. This tool is particularly useful for making strategic decisions in facility planning, portfolio management, investment appraisal, development project evaluations and deciding on usage possibilities in an unbiased, objective manner. Design/methodology/approach The proposed EDSS uses fuzzy logic and uncertainty theory as two of the most useful tools to deal with uncertainties involved in the problem environment. The system performs an unbiased mathematical analysis on the input data provided by the decision-maker, using a combination of Analytical Hierarchy Process (AHP) and Global Criterion Method; determines a suitable compromise level between the objectives; and delivers a set of locations that complies best with the outlined desires of the management as the final solution. The application of the system is tested on a real case and has delivered satisfactory results. Findings The proposed EDSS took the defined objectives, the list of alternative locations, and their attributes as the required input for problem-solving, and used a combination of AHP, Possibilistic approach, and global criterion method to solve the problem. The delivered outcome was a set of proper locations with the right attributes to meet all objectives of the organization at a satisfactory level, confirmed by the problem owners. Originality/value The application of such a system with such a degree of preciseness and complexity has been very limited in the literature. The system designed in this study is an Industry 4.0 decision making tool. For designing this system several body of knowledge are used. The present study is particularly useful for making strategic decisions in the domains of portfolio management, investment appraisal, project development evaluations and deciding on property usage possibilities. The proposed EDSS takes the information provided by the experts in the field (through qualitative and quantitative data collecting) as the inputs and operates as an objective decision-making tool using several bodies of knowledge considering the trends and developments in the world of FREM. The strong scientific method used in the core of the proposed EDSS guarantees a highly accurate result.
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Ayodele, Timothy Oluwafemi, Timothy Tunde Oladokun, and Kahilu Kajimo-Shakantu. "Employability skills of real estate graduates in Nigeria: a skill gap analysis." Journal of Facilities Management 18, no. 3 (July 24, 2020): 297–323. http://dx.doi.org/10.1108/jfm-04-2020-0027.
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Purpose The global shift in the traditional skills required of real estate graduates has led to an increased demand for employees who have the required skills and competencies. The purpose of this study is to evaluate employment considerations of real estate firms and analyse employers’ skill expectations and the observed skills possessed by the graduate employees. This study also analysed the self-assessed soft skill levels of the graduate employees, thereby establishing the skill gap. Design/methodology/approach Data were sought from real estate employers in the two dominant real estate markets of Nigeria: Lagos and Abuja, and real estate graduate employees who have had a minimum of six months working experience in real estate firms. Data collected were analysed using statistical techniques such as frequency, percentages, mean, correlation, multivariate analysis of variance, paired-samples t-test and independent samples t-test. Findings The findings of this study revealed that employers’ soft skills expectations were high with skills such as responsibility, administrative, listening, communication, business negotiation and work ethics. Based on employers' observed skills, there were significant skill gaps with respect to soft skills such as responsibility, business negotiation, logical thinking, marketing and dispute resolution. An analysis of the core skills reveals employers' preference for technical competencies in valuation, agency, property management, marketing, report writing and landlord and tenant laws. However, graduate employees possessed significant skill gaps with regards to technical skills such as valuation, property investment analysis, feasibility and viability appraisal, market research methods and facility management. Practical implications An understanding of the skill gaps will provide useful feedback to professional bodies, regulatory boards, institutions of higher learning, faculty members and other stakeholders regarding deficient skill areas, especially for curriculum review, development and training in the real estate sector. Originality/value There is a paucity of information about employers' skill preferences and the skill gaps in the real estate sector.
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Fabbri, Rita, Laura Gabrielli, and Aurora Greta Ruggeri. "Interactions between restoration and financial analysis: the case of Cuneo War Wounded House." Journal of Cultural Heritage Management and Sustainable Development 8, no. 2 (May 21, 2018): 145–61. http://dx.doi.org/10.1108/jchmsd-05-2017-0026.
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Purpose The purpose of this paper is to examine the cross-sectoral collaboration between conservation and economic appraisal, and to process a financial analysis for private owners of a built heritage. Design/methodology/approach The methodology applied addresses the financial analysis of restoration through a discounted cash flow analysis, together with a life cycle costing. Costs and revenues are both analysed in this paper. Some energy-saving measures are applied to cut running costs and decrease the energy required by the building, using as reference the “Guidelines for improving energy efficiency in cultural heritage” drafted by MiBACT, which considers the respect of restoration principles. In order to increase revenues, part of the building is rented. The attractiveness of the investment opportunity is valued through the calculation of the net present value of cash flows, the payback period and the internal rate of return. Findings The paper offers a simple strategy for the planning of cost-revenues, preventively allowing verification if the conservation is economically feasible and if the owners can afford the operation. The strategic planning will give the owners the chance of maintaining the property of their building and achieve a proper restoration on it. Originality/value The novelty of the paper is the study of cooperation between conservation and economic valuation, but also the focus on a specific portion of twentieth-century heritage, the war-wounded houses, which represent a widespread patrimony, on which it is not clear how to operate yet.
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Ataguba, Joseph Obaje. "Spreadsheet Iteration of Reversionary Leasehold Rental Growth Rate Within The Framework of Explicit DCF Appraisals." International Journal of Built Environment and Sustainability 8, no. 1 (December 29, 2020): 29–45. http://dx.doi.org/10.11113/ijbes.v8.n1.576.
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Income growth rates are required to justify decisions and strategies for property investments. Although existing studies addressed this phenomenon in freehold investments, a relative question regarding the determination of rental growth rates of leasehold investment properties valued part-way through rent review periods has not been addressed before now. This study examined the spreadsheet-assisted scenario analysis tools and techniques that are required for the determination of rental growth rates of leasehold investment properties valued part-way through rent review periods. A precursor to the scenario analysis was the development of a hybrid leasehold DCF valuation model arising from the equation of the formula for reversionary leasehold equivalent yield valuation to the formula for reversionary leasehold growth explicit DCF valuation model; thereby culminating into the identification of four unknown variables comprising the all risks yield and the implied growth rates of leasehold cash inflows and cash outflows which were subsequently derived using the solver tool of Excel®. From a total of eleven scenarios generated, the 9th successive scenario produced optimal results indicating zero slack between iterated and calculated values for the growth rates of leasehold cash inflows and cash outflows respectively. With recourse to the hybrid leasehold DCF valuation model, the spreadsheet-assisted scenario was found to produce mathematically valid growth rates that justify the valuation of leasehold investment properties part-way through rent review periods. The value of this research is the analytical tools and rigour it avails investors seeking income returns and growth from reversionary leasehold property as an instance of terminable investments.
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Yasnitsky, Leonid N., Vitaly L. Yasnitsky, and Aleksander O. Alekseev. "The Complex Neural Network Model for Mass Appraisal and Scenario Forecasting of the Urban Real Estate Market Value That Adapts Itself to Space and Time." Complexity 2021 (March 2, 2021): 1–17. http://dx.doi.org/10.1155/2021/5392170.
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In the modern scientific literature, there are many reports about the successful application of neural network technologies for solving complex applied problems, in particular, for modeling the urban real estate market. There are neural network models that can perform mass assessment of real estate objects taking into account their construction and operational characteristics. However, these models are static because they do not take into account the changing economic situation over time. Therefore, they quickly become outdated and need frequent updates. In addition, if they are designed for a specific city, they are not suitable for other cities. On the other hand, there are several dynamic models taking into account the overall state of the economy and designed to predict and study the overall price situation in real estate markets. Such dynamic models are not intended for mass real estate appraisals. The aim of this article is to develop a methodology and create a complex model that has the properties of both static and dynamic models. Moreover, our comprehensive model should be suitable for evaluating real estate in many cities at once. This aim is achieved since our model is based on a neural network trained on examples considering both construction and operational characteristics, as well as geographical and environmental characteristics, along with time-changing macroeconomic parameters that describe the economic state of a specific region, country, and the world. A set of examples for training and testing the neural network were formed on the basis of statistical data of real estate markets in a number of Russian cities for the period from 2006 to 2020. Thus, many examples included the data relating to the periods of the economic calm for Russia, along with the periods of crisis, recovery, and growth of the Russian and global economy. Due to this, the model remains relevant with the changes of the international economic situation and it takes into account the specifics of regions. The model proved to be suitable for solving the following tasks: industrial economic analysis, company strategic and operational management, analytical and consulting support of investment, and construction activities of professional market participants. The model can also be used by government agencies authorized to conduct public cadastral assessment for calculating property taxes.
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Roubi, Sherif. "The valuation of intangibles for hotel investments." Property Management 22, no. 5 (December 1, 2004): 410–23. http://dx.doi.org/10.1108/02637470410570761.
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Reviews the literature on the valuation of intangibles for hotel investments. Contrary to the sceptical outlook portrayed in the literature, demonstrates the effectiveness of ex‐post models and hedonic pricing models (HPM) as an objective and robust tool in separating and measuring intangible hotel property and decomposing total asset value. Develops two HPM models using data on 50 hotel properties appraised in 1997. All hotels are owned and managed by the same hotel company and affiliated with the same brand. Some 58 per cent of the properties are freeholds and the rest are leaseholds. Estimates the hedonic price equations by regressing appraised values on physical, location and economic characteristics of the properties. Results confirm the effectiveness of HPM and in fact its relative superiority to traditional ex‐ante modelling in measuring and decomposing intangible property. As expected at the outset, comparable‐leases and excess‐profits‐based models produced similar results.
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Morano, Rosato, Tajani, Manganelli, and Liddo. "Contextualized Property Market Models vs. Generalized Mass Appraisals: An Innovative Approach." Sustainability 11, no. 18 (September 6, 2019): 4896. http://dx.doi.org/10.3390/su11184896.
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The present research takes into account the current and widespread need for rational valuation methodologies, able to correctly interpret the available market data. An innovative automated valuation model has been simultaneously implemented to three Italian study samples, each one constituted by two-hundred residential units sold in the years 2016–2017. The ability to generate a “unique” functional form for the three different territorial contexts considered, in which the relationships between the influencing factors and the selling prices are specified by different multiplicative coefficients that appropriately represent the market phenomena of each case study analyzed, is the main contribution of the proposed methodology. The method can provide support for private operators in the assessment of the territorial investment conveniences and for the public entities in the decisional phases regarding future tax and urban planning policies.
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Ekemode, Benjamin Gbolahan, and Abel Olaleye. "Convergence between direct and indirect real estate investments." Journal of Financial Management of Property and Construction 21, no. 3 (November 7, 2016): 212–30. http://dx.doi.org/10.1108/jfmpc-12-2015-0040.
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Purpose This paper aimed to examine the return/risk performance of direct and indirect real estate (listed property stock) in the Nigerian real estate market and analyzed the short-term integration between the two classes of real estate assets. It also established whether investors could achieve diversification benefits by combining both assets in a portfolio. Design/methodology/approach The data utilized comprised annual returns on direct real estate calculated from the rental and capital values of 226 direct commercial properties obtained from property valuers in Lagos, Nigeria, for a period of January 1999-December 2014. The appraisal-based direct real estate returns were de-smoothed using the Geltner (1993) procedure. The annual returns of indirect real estate were also computed from the transactions of listed property stock on the Nigerian Stock Exchange for the study period. The return-risk profiles were also broken down into short- and medium-term sub-periods, comprising 3, 5, 8 and 12 years to reflect the level of volatility in the market, whereas the nature of the short-term relationship between the two real estate assets classes was tested using Granger causality technique. Findings The results revealed that listed property stock performed better than unsmoothed direct real estate on a risk-adjusted performance basis. The performance profile, however, varies over the different sub-periods considered. Short-term integration analysis showed that there was no bidirectional relationship between direct and listed property stock, implying diversification and risk reduction possibilities in combining both assets with other asset classes in a domestic asset portfolio. Overall, the results confirm the findings of previous study that listed property stocks return is segmented from the direct real estate market upon which its pricing and trading in the stock market are based. Practical implications The conclusion of the study suggests that investors could achieve improved performance by investing in listed property stocks than direct real estate in the Nigerian real estate market. The inclusion of both assets in a domestic mixed-asset portfolio could also be expected to offer diversification and risk reduction benefits. Originality/value This is one of the few studies that examine the short-run integration between direct real estate and listed property stocks with a focus on an emerging African market.
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Morano, Pierluigi, Francesco Tajani, and Marco Locurcio. "Multicriteria analysis and genetic algorithms for mass appraisals in the Italian property market." International Journal of Housing Markets and Analysis 11, no. 2 (April 3, 2018): 229–62. http://dx.doi.org/10.1108/ijhma-04-2017-0034.
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Purpose This paper aims to test and compare two innovative methodologies (utility additive and evolutionary polynomial regression) for mass appraisal of residential properties. The aim is to deepen their characteristics, by exploring the potentialities and the operating limits. Design/methodology/approach With reference to the same case studies, concerning samples of residential properties recently sold in three Italian cities, the two procedures are tested and the results are compared. The first method is the utility additive, which interprets the process of the property price formation as a multi-criteria selection of multi-objective typology, where the selection criteria are the property characteristics that are decisive in the real estate market; the second method is a hybrid data-driven technique, called evolutionary polynomial regression, that uses multi-objective genetic algorithms to search those models expressions that simultaneously maximize accuracy of data and parsimony of mathematical functions. Findings The outputs obtained from the experimentation highlight the potentialities and the limits of the two methodologies, as well as the possibility of jointly applying them to interpret and predict the real estate phenomena in a more realistic representation. Originality value In all countries, mass appraisal techniques have become strategic for the definition of management and enhancement policies of public and private property assets, in the case of investments of technical and economic refunctionalization (energy, environment, etc.), and for the alienation of buildings no longer suitable for public needs (military barracks, hospitals, areas in disuse, etc.). In this context, the use of mass appraisal techniques for residential properties assumes a leading role for sector operators (buyers, sellers, institutions, insurance companies, banks, real estate funds, etc.). Therefore, the results of the applications outline the potentialities of the two methodologies implemented and the opportunity of further insights of the topics that have been dealt with in this research.
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Susanto, Sofian Arif, and Njo Anastasia. "Herding Behavior and Decision-Making within the Middle – Class Residential Property Investments." Jurnal Akuntansi dan Keuangan 21, no. 2 (November 4, 2019): 90–100. http://dx.doi.org/10.9744/jak.21.2.90-100.
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The main purpose of this study is to investigate the causality of the behavioral bias ‘herding’ that was traced down to both social and normative influences. An experimental method was developed to test 125 participants studying finance. The experiment provides a total of 6 houses in which the participants were instructed to appraise to a value that meets their willingness to purchase. The subjects were treated with social and normative influences and their valuation shifts were observed. In total, three valuations were recorded, labeled ‘initial’, ‘social’, and ‘normative’ valuations respectively. Our findings showed that the undergraduates were susceptible to both social and normative influences. However, further analysis showed that some external factors had a role in causing the herding behavior.
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Mattarocci, Gianluca, and Georgios Siligardos. "Income return versus capital appraisal for real estate funds during the financial crisis." EuroMed Journal of Business 10, no. 1 (May 5, 2015): 66–79. http://dx.doi.org/10.1108/emjb-01-2014-0005.
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Purpose – The overall performance of real estate funds can be ascribed to capital appreciation and/or income return. The Italian property funds market has grown significantly over the past few years; however, little is known about the key drivers of property fund performance. The purpose of this paper is to measure the impact of two sources of funds’ performance and identify their relevance during the financial crisis. Design/methodology/approach – The paper considers the Italian market in the last decade and analyses the annual reports of public real estate funds, separating appraisal returns from income returns. By considering a wide time horizon, it evaluates if the roles of income returns and capital gains with respect to overall performance are more or less influenced by fund characteristics, such as asset diversification, concentration, and leverage. Findings – The contribution of income return and capital growth are not strictly related to the overall performance of Italian real estate funds, with a significantly lower correlation during the global financial crisis. Furthermore, the main drivers of the two income sources are not strictly comparable. Originality/value – The paper presents the first analysis on the source of income return for the Italian real estate funds and it represents one of the few studies that considers the effect of the financial crisis on European indirect real estate investments, capital appreciation and income return.
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Baig, Umair, Manzoor Anwar Khalidi, Shujaat Mubarak, and Salman Sarwat. "An Empirical Insight into the Theory and Practices of Capital Budgeting in Pakistan." Market Forces 15, no. 2 (December 1, 2020): 18. http://dx.doi.org/10.51153/mf.v15i2.466.
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The study explores the different stages of the capital investment decision process and empirically investigates these stages’ mediating role. We have used firms, managers, and economic attributes as independent variables. Likewise, ROA, ROE, and EPS are used as proxies for measuring firm performance, which is the dependent variable. A survey was conducted through a self-developed questionnaire for non-financial listed firms of the Pakistan Stock Exchange (PSX). The questionnaire comprises of two parts. The first part is related to managers and firm attributes. The second part covers the nine steps of the Capex Appraisal Model (CAM). PLS-SEM was used to investigate the objectives of the study. Moreover, the results support the applicability of CAM in the corporate sector of Pakistan. For this purpose, 27 hypotheses were empirically tested, of which 21 were found to be significant. However, 6 hypotheses were not supported. The findings suggest that the “Capex Appraisal Model” is a useful approach for the corporate sector of Pakistan. Thus, firms should properly evaluate Capex decisions to enhance performance in the long run.
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Suh, Sunduck, Wonho Suh, and Jung In Kim. "Risk analysis model for regional railroad investment." Engineering Computations 34, no. 1 (March 6, 2017): 164–73. http://dx.doi.org/10.1108/ec-10-2015-0323.
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Purpose The purpose of this study is to model risks in financial analysis. These risks associated with uncertainties in the projects should be properly addressed to ensure proper decision regarding the projects. Performance indicators should be developed and assessing risks has high priority. All these activities comprise appraisal, and based on these, a proper course of action should be recommended. Design/methodology/approach To analyze the attractiveness of a project for foreign regional railroad investment or participation, the project should be analyzed in a systematic way. First, the project’s goals and objectives should be evaluated for compatibility. Also, criteria of acceptability for stakeholders should be checked against output from the project. Usually, a project can have many alternatives, and impacts of each alternative should be analyzed in terms of quantitative and qualitative forecasts of impacts. Benefits and costs need to be counted in proper units of measurement per goals and objectives. Findings This paper shows that risk modeling can reflect uncertainty in decision-making and provide robustness of modeling process and improved communication. Also, challenges are presented in using risk analysis. Originality/value To overcome the shortcomings of traditional mathematical optimization model in identifying best sets of projects for private application, the proposed model finds ways to incorporate risk management components for the optimization procedure. Based on simulation results, a brute force solution procedure using enumeration can be used. Another approach is recommended to use the genetic algorithm process to reduce the number of alternatives to search to reach an optimal solution.
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Źróbek, Sabina, Jerzy Adamiczka, and Richard Grover. "VALUATION FOR LOAN SECURITY PURPOSES IN THE CONTEXT OF A PROPERTY MARKET CRISIS - THE CASE OF THE UNITED KINGDOM AND POLAND." Real Estate Management and Valuation 21, no. 4 (December 1, 2013): 36–46. http://dx.doi.org/10.2478/remav-2013-0035.
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Abstract Valuation for loan security purposes has been a key issue related to property valuation, financial markets and the economy in general. This paper attempts to demonstrate the main reasons for interest in this field by referring to the situation in Poland and the United Kingdom. Moreover, the conditions of valuation for loan security purposes in Europe have been outlined, as well as the new challenges that property valuers have to face. Questions regarding unified and harmonious valuation standards have been presented in relation to international, European and domestic professional standards and legal regulations. The conclusion addresses further challenges of property valuation that must be tackled urgently, because valuation results are strictly connected with the profitability and safety of investments in the property market. Furthermore, the paper emphasizes that uncertainty in the valuation process also needs to be taken into account, as the appraised properties secure loans given by institutions funding their development.
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Müller, Maximilian A., Edward J. Riedl, and Thorsten Sellhorn. "Recognition versus Disclosure of Fair Values." Accounting Review 90, no. 6 (January 1, 2015): 2411–47. http://dx.doi.org/10.2308/accr-51044.
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ABSTRACT This paper examines pricing differences across recognized and disclosed fair values. We build on prior literature by examining two theoretical causes of such differences: lower reliability of the disclosed information, and/or investors' higher related information processing costs. We examine European real estate firms reporting under International Financial Reporting Standards (IFRS), which require that fair values for investment properties, our sample firms' key operating asset, either be recognized on the balance sheet or disclosed in the footnotes. Consistent with prior research, we predict and find a lower association between equity prices and disclosed relative to recognized investment property fair values, reflecting a discount applied to disclosed fair values. We then predict and find that this discount is mitigated by lower information processing costs (proxied via high analyst following), and some support that it is also mitigated by higher reliability (proxied via use of external appraisals). These latter results are documented using subsample analyses to test one attribute (either information processing costs or reliability) while holding the other constant. Overall, these findings are consistent with fair value reliability and information processing costs providing complementary explanations for observed pricing discounts assessed on disclosed accounting amounts. Data Availability: Data are available from public sources identified in the manuscript.
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Chan, Yin Wen, Min Huang Hsu, Chun Hung Chang, and Je Wei Tu. "Study on the Application of a Verification System Implementation Mode in Asphalt Concrete Batching Plants." Advanced Materials Research 723 (August 2013): 993–1000. http://dx.doi.org/10.4028/www.scientific.net/amr.723.993.
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Asphalt concrete is the main body of the surface layer of the road construction, which directly affects the service level of the road surface. During the construction process, how quality control (QC) operation is performed for products of the asphalt concrete batching plant (ACBP) is one of the key factors that will directly affect whether the road construction is successful. How to stimulate the asphalt concrete industry to strengthen its efforts on QC, investment in R&D, upgrading its manpower, machinery, raw material quality and assist the construction authority in playing a watchdog on the quality of the ACBP have become an imminent and critical issue. The theme of this study is to bring QC of the ACBP in the verification system and describe how to establish the quality appraisal standard and the verification system for the ACBP and the real benefits from implementation of the product verification, properly monitoring the quality of asphalt concrete from the origin.