Changing priorities in investor decision-making: the sustainability agenda

Ten years ago, the authors undertook a study, funded by the RICS Education Trust, to explore the ways in which investment decision-makers view comparative property choices. The study recognised that asset selection is undertaken in a complex environment, with multiple trade-offs necessary due to the different investment attributes represented in each property. The results indicated that, at that time, investors’ concerns about the sustainability of property were low, ranked as 7th in importance out of 8 attributes. This raised concerns over the degree to which actors within the industry were embracing the sustainability agenda. The current project seeks to revisit these results, a decade later, to explore whether preferences and investment behaviour have changed as Government and RICS’ sustainability stances have become reinforced. This is a timely study, with three of the ten principles of the UN Global Compact focusing on the environment (RICS, 2015) and, furthermore, it responds to calls, at the time of the original publication, for a repeat investigation into behaviour post-crash. This paper presents the preliminary results of the study. The original methods are replicated – a simulation of complex stock selection choices (using choice-based-conjoint analysis) to reveal investors’ purchasing-decision behaviour – with the results subsequently further explored through focus groups to reveal the reasons for their simulated investment choices against their sustainability objectives. Thus, the research seeks to investigate and reveal the degree of accord between what investment decision-makers explicitly state their sustainability strategies to be and how they are implemented, against what their behaviour reveals about how purchasing decisions are made and the implicit judgments within

Integrating interests: consumers-retailers-investors

The retail sector underpins many local and national economies, yet is experiencing a prolonged period of change and uncertainty. Securing successful large-scale retail-led developments within town and city centres can be key to economic success and stability, yet is a challenging and complex process. This is exacerbated during times of change, with the decision-making environment faced by investors undergoing dynamic transformation driven by changing consumer behaviour, retailer rationalisation and concerns over the accessibility of these traditional public places. The role of the city centre is being challenged and the aspirations of multiple user groups and stakeholders need to be revisited to seek to ensure the future-proofing of the next generation of retail developments. The role of the city centre faces challenges from the evolving behaviour and objectives of consumers and retailers and, in turn, each group comprises diversity. Consumers, for example, include user groups such as leisure users, workers, drinkers, diners, tourists, arts and culture users, the third sector, socialisers, service users, residents and, of course, shoppers (within both comparison and convenience sectors). Within each of these categories, behaviour has changed due to shifts in working hours, commuting patterns, utility of central public spaces, disposable income and, importantly, multi-channel internet shopping. Similarly, the characteristics and objectives of retailers have changed, with expansion in store numbers, store sizes and, more recently, retraction in representation with consequent changing requirements for space. It is within this diverse and complex context that the role of the city centre is explored. A model is developed that provides a comprehensive yet accessible representation of the diversity of user groups and stakeholders, their relationships, aspirations and the environment within which they operate. At its core it shows investors and depicts the challenges they face in terms of situating risk within the opportunities represented by the catchment of users (both occupiers and consumers) and satisficing the diverse aspirations of the catchment. It is argued that such a model can progress our understanding of the role of the city centre and, thus, may be an important input into investor decision-making by contextualising user group and stakeholder relationships, aspirations and pressures, enabling alignment of retail developments and urban regeneration goals

Changing Priorities in Investor Decision-Making: Preliminary Stage 1 Results

Ten years ago, the authors undertook a study, funded by the RICS Education Trust, to explore the ways in which investment decision-makers view comparative property choices. The study recognised that asset selection is undertaken in a complex environment, with multiple trade-offs necessary due to the different investment attributes represented in each property. The results indicated that, at that time, investors’ concerns about the sustainability of property were low, ranked as 7th in importance out of 8 attributes. This raised concerns over the degree to which actors within the industry were embracing the sustainability agenda. The current project seeks to revisit these results, a decade later, to explore whether preferences and investment behaviour have changed as Government and RICS’ sustainability stances have become reinforced. This is a timely study, with three of the ten principles of the UN Global Compact focusing on the environment (RICS, 2015) and, furthermore, it responds to calls, at the time of the original publication, for a repeat investigation into behaviour post-crash. This paper presents the preliminary results of the study. The original methods are replicated – a simulation of complex stock selection choices (using choice-based-conjoint analysis) to reveal investors’ purchasing-decision behaviour – with the results subsequently further explored through focus groups to reveal the reasons for their simulated investment choices against their sustainability objectives. Thus, the research seeks to investigate and reveal the degree of accord between what investment decision-makers explicitly state their sustainability strategies to be and how they are implemented, against what their behaviour reveals about how purchasing decisions are made and the implicit judgments within

Refining the real estate pricing model

Investment theory dictates that capitalisation (cap) rates for freehold real estate should be determined by the risk free nominal rate of return plus the risk premium (RP) less the expected growth rate, with an allowance for depreciation. However, importing the concept of the RP from the capital markets fails to guide investors through the complexities of the asset, or enable exploration of purchaser preferences and behaviour. A refined pricing model for real estate is proposed, based on a concept termed a risk scale, to distinguish between macro (market) and micro (stock) determinants of risk and growth within the RP. This pricing model is estimated for a major global investment market, using a cross-sectional inter-temporal framework, with a dataset of 497 transactions in the London office sector over 2010Q2-2012Q3. Average cap rates are estimated at just over 5%, with asset-specific attributes dominating yield determination, with submarket quality and tenant covenant most important; and unexpired term insignificant, surprising during the “flight to safety” characterising the period. International investors bought at lower cap rates, despite the ongoing economic and financial instability of the study period. Improving understanding of pricing behaviour and market transparency is important and may be advanced through the pricing model

Farmer participation in England’s Facilitation Funds

Participatory processes are relevant to large-scale environmental projects, which require knowledge sharing, decision making and action from a range of stakeholders including farmers, who are the focus of this research. A review of participatory models is used to build a conceptual framework which disaggregates key components of the process: the organisational driver, facilitators’ role and nature of farmers’ participation. Two English initiatives are analysed using primary and secondary data: large-scale environmental projects and the Facilitation Fund scheme (government-resourced farmer groups). Since 2010, non-governmental organisations (NGOs) have dominated the delivery of large-scale environmental projects. Farmers were generally framed as the subjects of the project interventions rather than active participants within it. Facilitation Funds provide an opportunity for farmer group creation, but are related to England’s current AES, over which groups have no control. The affiliation of the facilitator (organisationemployed or independent farm advisor) has an impact on farmers’ participation which may be related to group size. There was a spectrum of farmer participation: 17% of members did not attend any events and 57% attended less than a quarter of events. Generally, farmers were not motivated to join the group by environmental aims. Most did not change their farming practice as a result of group membership because of practical barriers, such as the cost of new equipment. A revised conceptual framework is proposed for future research into farmer participation with a focus on ensuring transparency within project initiation and resourcing, and an emphasis on individuals within the process. Further research is suggested to investigate the proposed link between participation in pro-environmental action and the influence of farmers’ agency and socioeconomic position. Lastly this research reinforces the importance of collaborative action within large-scale environmental projects, and, related to this, codesign of AES

Real estate stock selection and attribute preferences

The majority of studies that explore property portfolio construction and management strategies utilise highly aggregated ex-post data, but stock selection is known to be a significant determinant of portfolio performance. Thus, here we look at stock selection, focusing on the choices faced by investors, necessitating the collection and analysis of primary data, carried out utilising conjoint analysis. This represents a new step in property research, with the data collection undertaken using a simulation exercise. This enables fund managers to make hypothetical purchase decisions, viewing properties comprising a realistic bundle of attributes and making complex contemporaneous trade-offs between attributes, subject to their stated market and economic forecasts and sector specialism. In total 51 fund managers were surveyed, producing 918 purchase decisions for analysis, with additional data collected regarding fund and personal characteristics. The results reveal that ‘fixed’ property characteristics (location and obsolescence) are dominant in the decision-making process, over and above ‘manageable’ tenant and lease characteristics which can be explicitly included within models of probabilities of income variation. This reveals investors are making ex-ante risk judgements and are considering post acquisition risk management strategies. The study also reveals that behavioural factors affect acquisition decisions

Evidence, Theory and Context: Using intervention mapping to develop a worksite physical activity intervention

<p>Abstract</p> <p>Background</p> <p>The workplace is an ideal setting for health promotion. Helping employees to be more physically active can not only improve their physical and mental health, but can also have economic benefits such as reduced sickness absence. The current paper describes the development of a three month theory-based intervention that aims to increase levels of moderate intensity physical activity amongst employees in sedentary occupations.</p> <p>Methods</p> <p>The intervention was developed using an intervention mapping protocol. The intervention was also informed by previous literature, qualitative focus groups, an expert steering group, and feedback from key contacts within a range of organisations.</p> <p>Results</p> <p>The intervention was designed to target awareness (e.g. provision of information), motivation (e.g. goal setting, social support) and environment (e.g. management support) and to address behavioural (e.g. increasing moderate physical activity in work) and interpersonal outcomes (e.g. encourage colleagues to be more physically active). The intervention can be implemented by local facilitators without the requirement for a large investment of resources. A facilitator manual was developed which listed step by step instructions on how to implement each component along with a suggested timetable.</p> <p>Conclusion</p> <p>Although time consuming, intervention mapping was found to be a useful tool for developing a theory based intervention. The length of this process has implications for the way in which funding bodies allow for the development of interventions as part of their funding policy. The intervention will be evaluated in a cluster randomised trial involving 1350 employees from 5 different organisations, results available September 2009.</p

Randomised cluster trial to support informed parental decision-making for the MMR vaccine

Background In the UK public concern about the safety of the combined measles, mumps and rubella [MMR] vaccine continues to impact on MMR coverage. Whilst the sharp decline in uptake has begun to level out, first and second dose uptake rates remain short of that required for population immunity. Furthermore, international research consistently shows that some parents lack confidence in making a decision about MMR vaccination for their children. Together, this work suggests that effective interventions are required to support parents to make informed decisions about MMR. This trial assessed the impact of a parent-centred, multi-component intervention (balanced information, group discussion, coaching exercise) on informed parental decision-making for MMR. Methods This was a two arm, cluster randomised trial. One hundred and forty two UK parents of children eligible for MMR vaccination were recruited from six primary healthcare centres and six childcare organisations. The intervention arm received an MMR information leaflet and participated in the intervention (parent meeting). The control arm received the leaflet only. The primary outcome was decisional conflict. Secondary outcomes were actual and intended MMR choice, knowledge, attitude, concern and necessity beliefs about MMR and anxiety. Results Decisional conflict decreased for both arms to a level where an 'effective' MMR decision could be made one-week (effect estimate = -0.54, p < 0.001) and three-months (effect estimate = -0.60, p < 0.001) post-intervention. There was no significant difference between arms (effect estimate = 0.07, p = 0.215). Heightened decisional conflict was evident for parents making the MMR decision for their first child (effect estimate = -0.25, p = 0.003), who were concerned (effect estimate = 0.07, p < 0.001), had less positive attitudes (effect estimate = -0.20, p < 0.001) yet stronger intentions (effect estimate = 0.09, p = 0.006). Significantly more parents in the intervention arm reported vaccinating their child (93% versus 73%, p = 0.04). Conclusions Whilst both the leaflet and the parent meeting reduced parents' decisional conflict, the parent meeting appeared to enable parents to act upon their decision leading to vaccination uptake

Testing a workplace physical activity intervention: a cluster randomized controlled trial

<p>Abstract</p> <p>Background</p> <p>Increased physical activity levels benefit both an individuals' health and productivity at work. The purpose of the current study was to explore the impact and cost-effectiveness of a workplace physical activity intervention designed to increase physical activity levels.</p> <p>Methods</p> <p>A total of 1260 participants from 44 UK worksites (based within 5 organizations) were recruited to a cluster randomized controlled trial with worksites randomly allocated to an intervention or control condition. Measurement of physical activity and other variables occurred at baseline, and at 0 months, 3 months and 9 months post-intervention. Health outcomes were measured during a 30 minute health check conducted in worksites at baseline and 9 months post intervention. The intervention consisted of a 3 month tool-kit of activities targeting components of the Theory of Planned Behavior, delivered in-house by nominated facilitators. Self-reported physical activity (measured using the IPAQ short-form) and health outcomes were assessed.</p> <p>Results and discussion</p> <p>Multilevel modelling found no significant effect of the intervention on MET minutes of activity (from the IPAQ) at any of the follow-up time points controlling for baseline activity. However, the intervention did significantly reduce systolic blood pressure (B = -1.79 mm/Hg) and resting heart rate (B = -2.08 beats) and significantly increased body mass index (B = .18 units) compared to control. The intervention was found not to be cost-effective, however the substantial variability round this estimate suggested that further research is warranted.</p> <p>Conclusions</p> <p>The current study found mixed support for this worksite physical activity intervention. The paper discusses some of the tensions involved in conducting rigorous evaluations of large-scale randomized controlled trials in real-world settings.</p> <p>Trial registration</p> <p>Current controlled trials <a href="http://www.controlled-trials.com/ISRCTN08807396">ISRCTN08807396</a></p