Thesis (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Dept. of Architecture, Center for Real Estate, 2004 [first author]; and, (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Dept. of Urban Studies and Planning, Center for Real Estate, 2004 [second author].This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections.Includes bibliographical references (p. 85-87).This study examines the methodological opportunities of index construction for the Pan-European property index, whose release is planned by the company Investment Property Databank (IPD). To address the question of temporal aggregation in appraisal indices, three index construction methods, namely "Stale Appraisal", "Linear Interpolation", and "Repeated Measures Regression", are tested for their accuracy in dealing with infrequent appraisals. Our model is based on a simulation approach, calculating appraised indices from a simulated "true index" of randomly generated returns, and directly comparing the statistical characteristics of these index returns to the true return. As broader context, this paper also gives an overview of the current theories in respect to general valuation issues on a disaggregate, aggregate and international level. We also investigate the European real estate market regarding currently applied market size measuring, structure and country performance. In particular, we explore crucial valuation issues that are relevant for the planned Pan-European property index to obtain the respect of the international investment community.by Friederike Helfer and Markus Witta.S.M.in Real Estate Developmen
