Automated Valuation Models: an international perspective

This paper describes two research projects: the first carried out during Q2 2007 for the Council of Mortgage Lenders (CML) and MacDonald Dettwiler and Associates (Downie & Robson, 2007). The second is a questionnaire survey of RICS Residential Faculty members, carried out Q2 2008, as part of an ongoing study funded by the RICS Education Trust and the RICS Residential Faculty, investigating how AVMs can integrate with valuation services to meet the needs of borrowers, lenders and RICS members. Both projects were undertaken by the School of the Built Environment at Northumbria University. The former predates the credit crunch and the latter coincided with it. The paper will first outline the main findings of the CML report, then those of the valuer questionnaire and finally draw conclusions about issues for consideration by professional and industry bodies

Integrating automated valuation models (AVMs) with valuation services to meet the needs of UK borrowers, lenders and valuers

Lenders traditionally instruct a valuer to conduct a property valuation to support property secured loan decisions. However AVM use for UK residential loan valuations has recently grown rapidly (CML, 2007) raising questions about how the UK valuers’ professional body, the RICS, should respond. The paper reports research funded by the RICS Education Trust and Residential Professional Group, commencing with interviews and a survey examining valuers’ changing roles in residential loan valuation in the UK, including the use of AVMs. Subsequent interviews with lenders and AVM companies explored choices between different valuation and survey levels, including AVMs, and development of AVM tools designed to support valuers. The paper analyses possible approaches to advice, guidance and regulation of AVM use by the UK professional body, drawing on the survey, interviews and a review of other countries’ professional body responses to AVMs. It is the first systematic study of valuers’ current and likely future involvement with automated valuation and their perceptions of it

Would the reputation and behaviour of the Chinese stock exchange be a disincentive to investors considering a Chinese REIT?

China has drawn the world’s attention with the emergence, rapid growth and increasing maturity of its real estate market in the past twenty years. Currently the world’s third largest economy, China was the second largest Asian country for commercial property transaction capital flows in 2006 (JLL, 2007). International investors have recently shown considerable interest regarding property investment in China, via both direct and indirect property and changes to the rules governing internal funds are likely to initiate high levels of effective demand from domestic institutions too. China is yet to develop a Real Estate Investment trust (REIT) market; despite this investment demand encouragement for development of pilot REITs by the PRC government has waxed and waned with political imperatives to manage market and economic volatility. Chinese REITs would theoretically provide the opportunity for investors to access Chinese “property” returns with liquidity and flexibility and might further play a significant role in stabilising the Chinese capital market in the medium and long term. The purpose of this paper is to examine whether the reputation and behaviour of the Chinese stock exchanges is a disincentive to investors considering a Chinese REIT. This is addressed firstly by assessing Chinese stock market volatility compared to that of the Hong Kong and Singapore stock exchanges. Secondly, a survey was used to explore Chinese domestic investors’ attitudes to investment in Chinese property REITs and their preferences amongst the three main Asian stock exchanges where Chinese REITs might potentially be available

Grease to the wheel or a spanner in the works? An investigation of office and industrial occupier displacement and property market filtering in Tyne & Wear using the chaining technique

The research uses a chaining technique to study the scale and impact of the displacement of office and industrial occupiers in the Tyne and Wear conurbation. The status and origin of occupiers of 20 office and industrial developments, promoted or assisted by the public sector, have been recorded to determine the distance that they have moved and the number of net new jobs generated. Property chaining reveals the extent to which the filtering effect has resulted in reoccupation of buildings and permits the quantification of the amount of property remaining vacant and its location. Analysis of the recorded chains has revealed that more than half of all occupiers on assisted schemes have relocated within the Tyne and Wear area and one in three occupier chains generated by such relocations result in vacant property elsewhere within the metropolitan area. The displacement of employment and economic activity within the conurbation can be mapped and could be used to inform the action of public agencies to reduce or ameliorate the negative side-effects of their intervention. The chaining technique proves an elegantly simple and robust technique by which to determine the scale and distribution of occupier displacement in property markets

Grease to the wheel or a spanner in the works? : an investigation of office and industrial occupier displacement and property market filtering generated by public sector assisted property developments : a case study of Tyne and Wear

The thesis is a study of property occupier displacement generated by the supply of new office and industrial accommodation that has been promoted or assisted by property-led regeneration policies. A review of literature revealed that there had been little in-depth investigation of the phenomenon of occupier displacement and the filtering effect associated with it. A flow model was developed to illustrate the incidence of occupier displacement and the process of property market filtering. There are two main strands to the research (see Figure 1.1), firstly an exploration of the property chains generated by the displacement of office and industrial occupiers in response the supply of new accommodation, and secondly, an investigation of the reasons why office and industrial occupiers relocate and how they determine where to move to. Three phases of research were employed to record the displacement generated by twenty public sector assisted office and industrial developments in the Tyne and Wear conurbation. Occupiers of twenty developments were identified by site inspections and a total population questionnaire survey was undertaken, complemented by a telephone survey, to record the status and origin of over 500 property occupiers and allow the property chains to be pursued. The chaining exercise revealed the scale of displacement or relocation and the outcome of the resulting chains. The origin of first move occupiers and chain-ends was plotted to reveal their spatial distribution. The research recorded that over half of all occupiers had relocated and over a third of chains generated by such moves, resulted in vacant property elsewhere in the conurbation. Structured interviews with 29 office and industrial occupiers were undertaken to investigate their locational decisions and the factors that influenced their outcome, the results of which were triangulated with the earlier research phases to reveal ten key themes that fundamentally determine such decisions. The originality of the research is the scale and rigour of the chaining survey, the mapping of the spatial distribution of the origin of occupiers and the chain-ends, and the pursuit of understanding of how occupiers respond to the availability of new accommodation. The scale occupier displacement, generated by new office and industrial accommodation, is significant, but by stimulating property market excitation and vacancy a filtering effect is set-up that can generate positive benefits to a local economy by allowing occupiers to expand.EThOS - Electronic Theses Online ServiceGBUnited Kingdo

An Investigation of the Response of Industrial and Office Property Occupiers to Property-led Urban Regeneration Policies in Tyne and Wear

The paper investigates the scale of relocations generated by property-led regeneration schemes and identifies the perceived benefits accruing to occupiers of relocating to such developments. In so doing the implications for the local property market of such moves, in respect of the performance of new and existing developments, are revealed

Efficiency outcomes from space charging in UK higher education estates

Purpose Higher education (HE) in the UK has recently suffered financial pressure due to reduced central funding, and the requirement to widen student access. The estate is typically the second highest revenue expense and is an obvious target for efficiency gains. Sector-wide statistics show there are opportunities for improving efficiency and many influential bodies have advocated space charging as a way of achieving them. This paper aims to investigate space performance indicators for evidence that space charging improves space use efficiency. Design/methodology/approach The approach used is a statistical analysis of space performance indicators for space charging and other higher education institution (HEIs). Findings Approximately one-quarter of HEIs in the UK operated space charging in 2000-2001 but only ten out of 31 space-related performance indicators for the period 1998-2001 suggest that increased efficiency results. Scrutiny of the background data shows they predominantly reflect differences in institutional wealth and activities, rather than space use management. Efficiency measures relating space to use provide no evidence of efficiency gains, suggesting that the application of charging as a space management tool is ineffective. Research limitations/implications The methodology does not reveal the reasons for the disparity between theory and results of space charging. Qualitative research into the application of charging systems is required to provide an explanation. Practical implications The conclusions are important for HE managers who are considering implementing expensive systems to improve space efficiency. The results also shed light on the usefulness of space performance indicators for HE estates. Originality/value Although there have been many assertions that space charging will improve space use efficiency in the HE sector, this research provides evidence to the contrary