A question of value: a discussion of property pricing and definitions of value

Valuation is often said to be “an art not a science” but this relates to the techniques employed to calculate value not to the underlying concept itself. Valuation practice has documented different bases of value or definitions of value both internationally and nationally. This paper discusses these definitions and suggests that there is a common thread that ties the definitions together

Internal rents and corporate property management: a study into the use of internal rents in UK corporate organisations

Research in the late 1980s showed that in many corporate real estates users were not fully aware of the full extent of their property holdings. In many cases, not only was the value of the holdings unknown, but there was uncertainty over the actual extent of ownership within the portfolio. This resulted in a large number of corporate occupiers reviewing their property holdings during the 1990s, initially to create a definitive asset register, but also to benefit from an more efficient use of space. Good management of corporately owned property assets is of equal importance as the management of other principal resources within the company. A comprehensive asset register can be seen as the first step towards a rational property audit. For the effective, efficient and economic delivery of services, it is vital that all property holdings are utilised to the best advantage. This requires that the property provider and the property user are both fully conversant with the value of the property holding and that an asset/internal rent/charge is made accordingly. The advantages of internal rent charging are twofold. Firstly, it requires the occupying department to “contribute” an amount to the business equivalent to the open market rental value of the space that it occupies. This prevents the treating of space as a free good and, as individual profit centres, each department will then rationalise its holdings to minimise its costs. The second advantage is from a strategic viewpoint. By charging an asset rent, the holding department can identify the performance of its real estate holdings. This can then be compared to an internal or external benchmark to help determine whether the company has adopted the most efficient tenure pattern for its properties. This paper investigates the use of internal rents by UK-based corporate businesses and explains internal rents as a form of transfer pricing in the context of management and responsibility accounting. The research finds that the majority of charging organisations introduced internal rents primarily to help calculate true profits at the business unit level. However, less than 10% of the charging organisations introduced internal rents primarily to capture the return on assets within the business. There was also a sizeable element of the market who had no plans to introduce internal rents. Here, it appears that, despite academic and professional views that internal rents are beneficial in improving the efficient use of property, opinion at the business and operational level has not universally accepted this proposition

Judgments, forecasts and decisions: an analysis of fund managers over time

Decision theory is the study of models of judgement involved in, and leading to, deliberate and (usually) rational choice. In real estate investment there are normative models for the allocation of assets. These asset allocation models suggest an optimum allocation between the respective asset classes based on the investors’ judgements of performance and risk. Real estate is selected, as other assets, on the basis of some criteria, e.g. commonly its marginal contribution to the production of a mean variance efficient multi asset portfolio, subject to the investor’s objectives and capital rationing constraints. However, decisions are made relative to current expectations and current business constraints. Whilst a decision maker may believe in the required optimum exposure levels as dictated by an asset allocation model, the final decision may/will be influenced by factors outside the parameters of the mathematical model. This paper discusses investors' perceptions and attitudes toward real estate and highlights the important difference between theoretical exposure levels and pragmatic business considerations. It develops a model to identify “soft” parameters in decision making which will influence the optimal allocation for that asset class. This “soft” information may relate to behavioural issues such as the tendency to mirror competitors; a desire to meet weight of money objectives; a desire to retain the status quo and many other non-financial considerations. The paper aims to establish the place of property in multi asset portfolios in the UK and examine the asset allocation process in practice, with a view to understanding the decision making process and to look at investors’ perceptions based on an historic analysis of market expectation; a comparison with historic data and an analysis of actual performance

Theories, models and structures: thirty years on

Thirty years after the conference that gave rise to The Structure of Scientific Theories, there is renewed interest in the nature of theories and models. However, certain crucial issues from thirty years ago are reprised in current discussions; specifically: whether the diversity of models in the science can be captured by some unitary account; and whether the temporal dimension of scientific practice can be represented by such an account. After reviewing recent developments we suggest that these issues can be accommodated within the partial structures formulation of the semantic or model-theoretic approach

Decision theory and real estate development: a note on uncertainty

Real estate development appraisal is a quantification of future expectations. The appraisal model relies upon the valuer/developer having an understanding of the future in terms of the future marketability of the completed development and the future cost of development. In some cases the developer has some degree of control over the possible variation in the variables, as with the cost of construction through the choice of specification. However, other variables, such as the sale price of the final product, are totally dependent upon the vagaries of the market at the completion date. To try to address the risk of a different outcome to the one expected (modelled) the developer will often carry out a sensitivity analysis on the development. However, traditional sensitivity analysis has generally only looked at the best and worst scenarios and has focused on the anticipated or expected outcomes. This does not take into account uncertainty and the range of outcomes that can happen. A fuller analysis should include examination of the uncertainties in each of the components of the appraisal and account for the appropriate distributions of the variables. Similarly, as many of the variables in the model are not independent, the variables need to be correlated. This requires a standardised approach and we suggest that the use of a generic forecasting software package, in this case Crystal Ball, allows the analyst to work with an existing development appraisal model set up in Excel (or other spreadsheet) and to work with a predetermined set of probability distributions. Without a full knowledge of risk, developers are unable to determine the anticipated level of return that should be sought to compensate for the risk. This model allows the user a better understanding of the possible outcomes for the development. Ultimately the final decision will be made relative to current expectations and current business constraints, but by assessing the upside and downside risks more appropriately, the decision maker should be better placed to make a more informed and “better”

The aeroelastic characteristics of the Saturn IB SA-203 launch vehicle

Aeroelastic properties, and effects of boundary layer-terminal shock wave interaction on Saturn IB SA-203 launch vehicl

The life project

This conference paper is available to download from the publisher’s website at the link below.The Life Project explores issues of psychological projection into technology by diving into the convoluted relationship between practical purpose and emotional attachment, through both the creative act of designing and making robot entities with artificial emotions, and the social act of engaging with them. This process explores the concept of body representation through a multiidentity in virtual and physical blended space. In a lesser sense, it also suggests a future world of collaboration between physical and virtual forms, enabled by new forms of representation in blended worlds

Characterisation of dairy soiled water in a survey of 60 Irish dairy farms

peer-reviewedDairy farming in Ireland generates an effluent known as dairy soiled water (DSW), which consists of a relatively dilute mixture of cow faeces, urine, spilt milk and detergents that is typically applied to grassland. However, relatively little is known about the volumes generated, nutrient content and management factors that influence volume and concentration. Sixty dairy farms that had a separate storage tank for storing DSW were selected for this study. The spatial distribution of the farms reflected the spatial distribution of dairy cows across the 26 counties of the Republic of Ireland, with each farm representing between 10,000 and 20,000 dairy cows. Samples were analysed for biochemical oxygen demand (BOD), ammonium N (NH4-N), total nitrogen (TN), potassium (K), phosphorus (molybdate-reactive and total) (MRP and TP) and dry matter (DM) content. Management characteristics and parlour properties were quantified. Factors influencing volume and concentration of DSW were determined using mixed model multiple regression analysis. On average, 9784 l (standard error 209 l) of DSW, including rainfall, was produced cow−1 year−1 and this contained significant quantities of total N, P and K (587, 80 and 568 mg l−1, respectively). A typical Irish dairy farm stocked at 1.9 cows ha−1 could therefore supply approximately 13, 2 and 12 kg ha−1 of total N, P and K, respectively, across the farm, annually to meet some of the nutrient requirements for herbage production and potentially replace some of the synthetic fertilizer use. Seventy one percent of samples were within the regulated concentration limits of soiled water for BOD (<2500 mg l−1), rising to 87% during the closed period for slurry spreading (mid October to mid-late January), while 81% were within the concentration limits for DM (<1% DM), rising to 94% during the closed period. The efficiency of a milking parlour (cows per unit, time taken) plays a key role in determining the volume of DSW generated. This, in turn, also influences the concentration of nutrients and other chemicals. Large variability was found in nutrient concentrations and this presents a challenge for effective nutrient management to maximise the fertilizer replacement value of DSW

Relativistic U(3) Symmetry and Pseudo-U(3) Symmetry of the Dirac Hamiltonian

The Dirac Hamiltonian with relativistic scalar and vector harmonic oscillator potentials has been solved analytically in two limits. One is the spin limit for which spin is an invariant symmetry of the the Dirac Hamiltonian and the other is the pseudo-spin limit for which pseudo-spin is an invariant symmetry of the the Dirac Hamiltonian. The spin limit occurs when the scalar potential is equal to the vector potential plus a constant, and the pseudospin limit occurs when the scalar potential is equal in magnitude but opposite in sign to the vector potential plus a constant. Like the non-relativistic harmonic oscillator, each of these limits has a higher symmetry. For example, for the spherically symmetric oscillator, these limits have a U(3) and pseudo-U(3) symmetry respectively. We shall discuss the eigenfunctions and eigenvalues of these two limits and derive the relativistic generators for the U(3) and pseudo-U(3) symmetry. We also argue, that, if an anti-nucleon can be bound in a nucleus, the spectrum will have approximate spin and U(3) symmetry.Comment: Submitted to the Proceedings of "Tenth International Spring Seminar-New Quests in Nuclear Structure", 6 page