Pub Date : 2020-12-04DOI: 10.1108/jerer-06-2020-0035
A. Zhukovskiy, Heidi Falkenbach, Ranoua Bouchouicha
Purpose This paper aims to examine the relationship between the use of public debt and investment activity of European listed real estate companies. Design/methodology/approach Using a hand-collected sample of debt structures of 102 European public real estate companies, and using European Central Bank lending standards survey as a proxy for bank credit availability, the authors test a conditional hypothesis on the relationship between investment rates and the use of public debt during period of constrained bank lending environment in Europe. Findings The results show that ex ante diversification of debt allows retaining higher investment rates when the main source of debt, bank lending, is shrinking. The effect is statistically and economically significant and increases during times of tight bank lending constraints. The authors find no support to debt capacity explanation of the effect. They neither find support of the higher investment rates to be indicative of overinvestment problem. The results are robust to alternative model specifications and estimators. Research limitations/implications The empirical analysis is limited to Europe. Practical implications Investments and the growth of real estate companies depend on their ability to seize value-increasing opportunities that arise in the competitive markets. This paper evaluates the role of a diversified debt structure in this context. The results suggest that debt structure can have material importance for the investment activity of European listed real estate companies and issuance of public debt can help companies to counterbalance the negative effects of restricted bank loan supply on the investment levels. Originality/value The paper extends the literature on debt structures of listed real estate firms by considering the effect of debt diversification on investments.
{"title":"Debt diversification and investments of European listed real estate companies","authors":"A. Zhukovskiy, Heidi Falkenbach, Ranoua Bouchouicha","doi":"10.1108/jerer-06-2020-0035","DOIUrl":"https://doi.org/10.1108/jerer-06-2020-0035","url":null,"abstract":"Purpose\u0000This paper aims to examine the relationship between the use of public debt and investment activity of European listed real estate companies.\u0000\u0000\u0000Design/methodology/approach\u0000Using a hand-collected sample of debt structures of 102 European public real estate companies, and using European Central Bank lending standards survey as a proxy for bank credit availability, the authors test a conditional hypothesis on the relationship between investment rates and the use of public debt during period of constrained bank lending environment in Europe.\u0000\u0000\u0000Findings\u0000The results show that ex ante diversification of debt allows retaining higher investment rates when the main source of debt, bank lending, is shrinking. The effect is statistically and economically significant and increases during times of tight bank lending constraints. The authors find no support to debt capacity explanation of the effect. They neither find support of the higher investment rates to be indicative of overinvestment problem. The results are robust to alternative model specifications and estimators.\u0000\u0000\u0000Research limitations/implications\u0000The empirical analysis is limited to Europe.\u0000\u0000\u0000Practical implications\u0000Investments and the growth of real estate companies depend on their ability to seize value-increasing opportunities that arise in the competitive markets. This paper evaluates the role of a diversified debt structure in this context. The results suggest that debt structure can have material importance for the investment activity of European listed real estate companies and issuance of public debt can help companies to counterbalance the negative effects of restricted bank loan supply on the investment levels.\u0000\u0000\u0000Originality/value\u0000The paper extends the literature on debt structures of listed real estate firms by considering the effect of debt diversification on investments.","PeriodicalId":44570,"journal":{"name":"Journal of European Real Estate Research","volume":"21 1","pages":""},"PeriodicalIF":1.3,"publicationDate":"2020-12-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84917943","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-12-01DOI: 10.1108/jerer-01-2020-0001
Carsten Lausberg, P. Krieger
Purpose Scoring is a widely used, long-established, and universally applicable method of measuring risks, especially those that are difficult to quantify. Unfortunately, the scoring method is often misused in real estate practice and underestimated in academia. The purpose of this paper is to supplement the literature with general rules under which scoring systems should be designed and validated, so that they can become reliable risk instruments. Design/methodology/approach The paper combines the rules, or axioms, for coherent risk measures known from the literature with those for scoring instruments. The result is a system of rules that a risk scoring system should fulfil. The approach is theoretical, based on a literature survey and reasoning. Findings At first, the paper clarifies that a risk score should express the variation of a property’s yield and not of its quality, as it is often done in practice. Then the axioms for a coherent risk scoring are derived, e.g. the independence of the risk factors. Finally, the paper proposes procedures for valid and reliable risk scoring systems, e.g. the out-of-time validation. Practical implications Although it is a theoretical work, the paper also focuses on practical applicability. The findings are illustrated with examples of scoring systems. Originality/value Rules for risk measures and for scoring systems have been established long ago, but the combination is a first. In this way, the paper contributes to real estate risk research and risk management practice.
{"title":"Rules for a coherent real estate risk scoring","authors":"Carsten Lausberg, P. Krieger","doi":"10.1108/jerer-01-2020-0001","DOIUrl":"https://doi.org/10.1108/jerer-01-2020-0001","url":null,"abstract":"\u0000Purpose\u0000Scoring is a widely used, long-established, and universally applicable method of measuring risks, especially those that are difficult to quantify. Unfortunately, the scoring method is often misused in real estate practice and underestimated in academia. The purpose of this paper is to supplement the literature with general rules under which scoring systems should be designed and validated, so that they can become reliable risk instruments.\u0000\u0000\u0000Design/methodology/approach\u0000The paper combines the rules, or axioms, for coherent risk measures known from the literature with those for scoring instruments. The result is a system of rules that a risk scoring system should fulfil. The approach is theoretical, based on a literature survey and reasoning.\u0000\u0000\u0000Findings\u0000At first, the paper clarifies that a risk score should express the variation of a property’s yield and not of its quality, as it is often done in practice. Then the axioms for a coherent risk scoring are derived, e.g. the independence of the risk factors. Finally, the paper proposes procedures for valid and reliable risk scoring systems, e.g. the out-of-time validation.\u0000\u0000\u0000Practical implications\u0000Although it is a theoretical work, the paper also focuses on practical applicability. The findings are illustrated with examples of scoring systems.\u0000\u0000\u0000Originality/value\u0000Rules for risk measures and for scoring systems have been established long ago, but the combination is a first. In this way, the paper contributes to real estate risk research and risk management practice.\u0000","PeriodicalId":44570,"journal":{"name":"Journal of European Real Estate Research","volume":"17 1","pages":""},"PeriodicalIF":1.3,"publicationDate":"2020-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75044088","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-12-01DOI: 10.1108/jerer-05-2020-0030
G. Morri, Rachele Anconetani, Luca Benfari
Purpose The purpose of this paper is to investigate the link between greenness and the operating performance in 50 listed European real estate investment trusts (REITs). Design/methodology/approach Using a sample of 50 listed European REITs, the analysis leverages on Ordinary least squares models to investigate the relationship between greenness and operating performance indicators. In particular, it examines three types of greenness indicators: the overall Green Real Estate Sustainability Benchmark (GRESB) rating, its two components (management and policy [MP] and implementation and measurement) and the seven aspect scores; return on equity (ROE) and return on assets (ROA) are the fundamental measures of REITs operating performance. Findings The results demonstrate a positive relationship between greenness indicators and operating performance in European REITs, but the impact on ROE and ROA differs depending on the GRESB variable analyzed. If the GRESB rating proved to be significant on ROE and ROA, none of its two components has an impact on ROA, and only the MP score has a positive relationship with ROE. Finally, of the seven aspect scores, only the stakeholder engagement is significant on the two dependent variables. Originality/value The commercial real estate sector has a significant role in tackling climate change issues. To incentivize the market to increase the investments in green buildings, it is essential to find a link between their sustainability characteristics and the improvements they deliver in terms of operating performance. Despite there being a substantial body of literature investigating this connection in the US REITs market, there is still limited knowledge on the relationship between green and operating indicators in the European REITs market.
{"title":"Greenness and financial performance of European REITs","authors":"G. Morri, Rachele Anconetani, Luca Benfari","doi":"10.1108/jerer-05-2020-0030","DOIUrl":"https://doi.org/10.1108/jerer-05-2020-0030","url":null,"abstract":"\u0000Purpose\u0000The purpose of this paper is to investigate the link between greenness and the operating performance in 50 listed European real estate investment trusts (REITs).\u0000\u0000\u0000Design/methodology/approach\u0000Using a sample of 50 listed European REITs, the analysis leverages on Ordinary least squares models to investigate the relationship between greenness and operating performance indicators. In particular, it examines three types of greenness indicators: the overall Green Real Estate Sustainability Benchmark (GRESB) rating, its two components (management and policy [MP] and implementation and measurement) and the seven aspect scores; return on equity (ROE) and return on assets (ROA) are the fundamental measures of REITs operating performance.\u0000\u0000\u0000Findings\u0000The results demonstrate a positive relationship between greenness indicators and operating performance in European REITs, but the impact on ROE and ROA differs depending on the GRESB variable analyzed. If the GRESB rating proved to be significant on ROE and ROA, none of its two components has an impact on ROA, and only the MP score has a positive relationship with ROE. Finally, of the seven aspect scores, only the stakeholder engagement is significant on the two dependent variables.\u0000\u0000\u0000Originality/value\u0000The commercial real estate sector has a significant role in tackling climate change issues. To incentivize the market to increase the investments in green buildings, it is essential to find a link between their sustainability characteristics and the improvements they deliver in terms of operating performance. Despite there being a substantial body of literature investigating this connection in the US REITs market, there is still limited knowledge on the relationship between green and operating indicators in the European REITs market.\u0000","PeriodicalId":44570,"journal":{"name":"Journal of European Real Estate Research","volume":"65 1","pages":""},"PeriodicalIF":1.3,"publicationDate":"2020-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90533963","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-10-06DOI: 10.1108/jerer-03-2020-0012
Peter Palm, M. Andersson
Purpose The purpose of this study is to evaluate the impact of theoretical knowledge related to financial behaviour and especially anchor effects. Design/methodology/approach The study design is based upon an experiment divided into two parts, before and after the development of the course curriculum for the course introducing behavioural finance for undergraduate real estate students. Findings The study concludes that the anchor effect is persistent also after introducing theoretical knowledge regarding financial behaviour and anchor effects. To conclude the results, in this study, indicates that the appraisal of properties are dependent on the individual’s cognitive capacity to mitigate anchor effects. There are epistemological assumptions underlying the belief in the individuals’ capacity to handle anchor effects that might provide biased appraisals. These assumptions need to be carefully tested and treated to increase the accuracy of property appraisals. Practical implications The study result also highlights the possibility that current literature in valuation, and learning activities, does not emphases and stimulate readers to critical thinking. This paper would, therefore, propose also other real estate education programmes to be aware of the potential lack of critical thinking among the students. Originality/value It provides an insight regarding how appraisal of properties is dependent on the individual’s cognitive capacity to mitigate anchor effects.
{"title":"Anchor effects in appraisals: do information and theoretical knowledge matter?","authors":"Peter Palm, M. Andersson","doi":"10.1108/jerer-03-2020-0012","DOIUrl":"https://doi.org/10.1108/jerer-03-2020-0012","url":null,"abstract":"\u0000Purpose\u0000The purpose of this study is to evaluate the impact of theoretical knowledge related to financial behaviour and especially anchor effects.\u0000\u0000\u0000Design/methodology/approach\u0000The study design is based upon an experiment divided into two parts, before and after the development of the course curriculum for the course introducing behavioural finance for undergraduate real estate students.\u0000\u0000\u0000Findings\u0000The study concludes that the anchor effect is persistent also after introducing theoretical knowledge regarding financial behaviour and anchor effects. To conclude the results, in this study, indicates that the appraisal of properties are dependent on the individual’s cognitive capacity to mitigate anchor effects. There are epistemological assumptions underlying the belief in the individuals’ capacity to handle anchor effects that might provide biased appraisals. These assumptions need to be carefully tested and treated to increase the accuracy of property appraisals.\u0000\u0000\u0000Practical implications\u0000The study result also highlights the possibility that current literature in valuation, and learning activities, does not emphases and stimulate readers to critical thinking. This paper would, therefore, propose also other real estate education programmes to be aware of the potential lack of critical thinking among the students.\u0000\u0000\u0000Originality/value\u0000It provides an insight regarding how appraisal of properties is dependent on the individual’s cognitive capacity to mitigate anchor effects.\u0000","PeriodicalId":44570,"journal":{"name":"Journal of European Real Estate Research","volume":"29 1","pages":""},"PeriodicalIF":1.3,"publicationDate":"2020-10-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83967539","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-09-25DOI: 10.1108/JERER-12-2019-0049
D. Brounen, Alexander Michael Groh, M. Haran
PurposeThis paper aims to decompose the value effects of green retrofits on commercial real estate. The paper disentangles various sources of value capture mechanisms that can be attained through green retrofit actions and profiles the extent to which green retrofit solutions can be effectively capitalised using transaction evidence from the Munich housing market. The insights offered can help real estate owners and investors during theirex anteanalysis of future energetic retrofit investments.Design/methodology/approachThe authors offer their reader both a conceptual framework and the results from an empirical analysis to identify the value effects of retrofits and the associating gains in energy efficiency. The conceptual framework theorises the different value components that a deep retrofit has to offer. The regression analysis includes a multivariate analysis of 8,928 dwellings in the Munich residential real estate market.FindingsThis study’s framework disentangles the total retrofit value effect into three components: the capitalisation of energy savings, the exposure to the value discount because of stricter standards and the value uplift because of indirect benefits (health, employee satisfaction, marketing etc.). The regression results indicate that the value gains because of energy efficiency improvements are in the range of 2.4–7.4%, while the indirect benefits and reduced exposure to stricter standards amount to another 3%.Originality/valueWhile numerous studies have investigated the upside value effects of energy efficiency in the real estate sector, there is scant academic research which has sought to evidence the value of green retrofit solutions and the extent to which this can be capitalised. Instrumentalising the various value effects of energetic retrofit that have been identified is not straightforward. At the same time, inadequate value capture of energetic retrofit effects could delay intervention timelines or aborting of proposed retrofit actions which should be of primary concern to policymakers and stakeholders tasked with the decarbonisation of real estate assets.
{"title":"The value effects of green retrofits","authors":"D. Brounen, Alexander Michael Groh, M. Haran","doi":"10.1108/JERER-12-2019-0049","DOIUrl":"https://doi.org/10.1108/JERER-12-2019-0049","url":null,"abstract":"PurposeThis paper aims to decompose the value effects of green retrofits on commercial real estate. The paper disentangles various sources of value capture mechanisms that can be attained through green retrofit actions and profiles the extent to which green retrofit solutions can be effectively capitalised using transaction evidence from the Munich housing market. The insights offered can help real estate owners and investors during theirex anteanalysis of future energetic retrofit investments.Design/methodology/approachThe authors offer their reader both a conceptual framework and the results from an empirical analysis to identify the value effects of retrofits and the associating gains in energy efficiency. The conceptual framework theorises the different value components that a deep retrofit has to offer. The regression analysis includes a multivariate analysis of 8,928 dwellings in the Munich residential real estate market.FindingsThis study’s framework disentangles the total retrofit value effect into three components: the capitalisation of energy savings, the exposure to the value discount because of stricter standards and the value uplift because of indirect benefits (health, employee satisfaction, marketing etc.). The regression results indicate that the value gains because of energy efficiency improvements are in the range of 2.4–7.4%, while the indirect benefits and reduced exposure to stricter standards amount to another 3%.Originality/valueWhile numerous studies have investigated the upside value effects of energy efficiency in the real estate sector, there is scant academic research which has sought to evidence the value of green retrofit solutions and the extent to which this can be capitalised. Instrumentalising the various value effects of energetic retrofit that have been identified is not straightforward. At the same time, inadequate value capture of energetic retrofit effects could delay intervention timelines or aborting of proposed retrofit actions which should be of primary concern to policymakers and stakeholders tasked with the decarbonisation of real estate assets.","PeriodicalId":44570,"journal":{"name":"Journal of European Real Estate Research","volume":"2015 1","pages":"301-319"},"PeriodicalIF":1.3,"publicationDate":"2020-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73647427","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-08-31DOI: 10.1108/jerer-06-2020-0033
M. McCord, J. McCord, M. Haran, PT Davis
PurposeA number of studies have investigated the relationship between energy performance certificates (EPCs) and house prices. A majority of studies have tended to model energy performance pricing effects within a traditional hedonic conditional mean estimate model. There has been limited analysis that has accounted for the relationship between EPCs and the effects across the pricing distribution. Moreover, there has been limited research examining the “standard cost improvements EPC score”, or “potential score”. Therefore, this paper aims to quantify and measure the dynamic effects of EPCs on house prices across the price spectrum and account for standardised cost-effective retrofit improvements.Design/methodology/approachExisting EPC studies produce one coefficient for the entirety of the pricing distribution, culminating in a single marginal implicit price effect. The approach within this study applies a quantile regression approach to empirically estimate how quantiles of house prices respond differently to unitary changes in the proximal effects of EPCs and structural property characteristics across the conditional distribution of house prices. Using a data set of 1,476 achieved transaction prices, the quantile regression models apply both assessed EPC score and bands and further examine the potential EPC rating for improved energy performance based on an average energy cost improvement.FindingsThe findings show that EPCs are valued differently across the quantiles and that conditional quantiles are asymmetrical. Only property prices in the upper quantiles of the price distribution show significant capitalisation effects with energy performance, and only properties with higher EPC scores display positive significant effects at the higher end of the price distribution. There are also brown discount effects evident for lower-rated properties within F- and G-rated EPC properties at the higher end of the pricing distribution. Moreover, the potential energy efficiency rating (score) also shows increased effects with sales prices and appears to minimise any brown discount effects. The findings imply that energy performance is a complex feature that is not easily “averaged” for valuation effect purposes.Originality/valueWhile numerous studies have investigated the pricing effects of EPCs, they have tended to provide a single estimate to determine the relationship with price. This paper extends the traditional analytical insights beyond the conditional mean estimate by examining the quantiles of the relationship between EPCs and house prices to enhance the understanding of this esoteric and complex issue. In addition, this research applies the assessed energy efficiency potential to establish whether effective cost improvements enhance the relationship with sales price and capitalisation effects.
{"title":"Energy performance certificates and house prices: a quantile regression approach","authors":"M. McCord, J. McCord, M. Haran, PT Davis","doi":"10.1108/jerer-06-2020-0033","DOIUrl":"https://doi.org/10.1108/jerer-06-2020-0033","url":null,"abstract":"PurposeA number of studies have investigated the relationship between energy performance certificates (EPCs) and house prices. A majority of studies have tended to model energy performance pricing effects within a traditional hedonic conditional mean estimate model. There has been limited analysis that has accounted for the relationship between EPCs and the effects across the pricing distribution. Moreover, there has been limited research examining the “standard cost improvements EPC score”, or “potential score”. Therefore, this paper aims to quantify and measure the dynamic effects of EPCs on house prices across the price spectrum and account for standardised cost-effective retrofit improvements.Design/methodology/approachExisting EPC studies produce one coefficient for the entirety of the pricing distribution, culminating in a single marginal implicit price effect. The approach within this study applies a quantile regression approach to empirically estimate how quantiles of house prices respond differently to unitary changes in the proximal effects of EPCs and structural property characteristics across the conditional distribution of house prices. Using a data set of 1,476 achieved transaction prices, the quantile regression models apply both assessed EPC score and bands and further examine the potential EPC rating for improved energy performance based on an average energy cost improvement.FindingsThe findings show that EPCs are valued differently across the quantiles and that conditional quantiles are asymmetrical. Only property prices in the upper quantiles of the price distribution show significant capitalisation effects with energy performance, and only properties with higher EPC scores display positive significant effects at the higher end of the price distribution. There are also brown discount effects evident for lower-rated properties within F- and G-rated EPC properties at the higher end of the pricing distribution. Moreover, the potential energy efficiency rating (score) also shows increased effects with sales prices and appears to minimise any brown discount effects. The findings imply that energy performance is a complex feature that is not easily “averaged” for valuation effect purposes.Originality/valueWhile numerous studies have investigated the pricing effects of EPCs, they have tended to provide a single estimate to determine the relationship with price. This paper extends the traditional analytical insights beyond the conditional mean estimate by examining the quantiles of the relationship between EPCs and house prices to enhance the understanding of this esoteric and complex issue. In addition, this research applies the assessed energy efficiency potential to establish whether effective cost improvements enhance the relationship with sales price and capitalisation effects.","PeriodicalId":44570,"journal":{"name":"Journal of European Real Estate Research","volume":"13 1","pages":"409-434"},"PeriodicalIF":1.3,"publicationDate":"2020-08-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87166117","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-08-31DOI: 10.1108/jerer-12-2019-0054
L. Gabrielli, A. Ruggeri, M. Scarpa
Purpose This paper aims to develop a forecasting tool for the automatic assessment of both environmental and economic benefits resulting from low-carbon investments in the real estate sector, especially when applied in large building stocks. A set of four artificial neural networks (NNs) is created to provide a fast and reliable estimate of the energy consumption in buildings due to heating, hot water, cooling and electricity, depending on some specific buildings’ characteristics, such as geometry, orientation, climate or technologies. Design/methodology/approach The assessment of the building’s energy demand is performed comparing the as-is status (pre-retrofit) against the design option (post-retrofit). The authors associate with the retrofit investment the energy saved per year, and the net monetary saving obtained over the whole cost after a predetermined timeframe. The authors used a NN approach, which is able to forecast the buildings’ energy demand due to heating, hot water, cooling and electricity, both in the as-is and in the design stages. The design stage is the result of a multiple attribute optimization process. Findings The approach here developed offers the opportunity to manage energy retrofit interventions on wide property portfolios, where it is necessary to handle simultaneously a large number of buildings without it being technically feasible to achieve a very detailed level of analysis for every property of a large portfolio. Originality/value Among the major accomplishments of this research, there is the creation of a methodology that is not excessively data demanding: the collection of data for building energy simulations is, in fact, extremely time-consuming and expensive, and this NN model may help in overcoming this problem. Another important result achieved in this study is the flexibility of the model developed. The case study the authors analysed was referred to one specific stock, but the results obtained have a more widespread importance because it ends up being only a matter of input-data entering, while the model is perfectly exportable in other contexts.
{"title":"Automatic energy demand assessment in low-carbon investments: a neural network approach for building portfolios","authors":"L. Gabrielli, A. Ruggeri, M. Scarpa","doi":"10.1108/jerer-12-2019-0054","DOIUrl":"https://doi.org/10.1108/jerer-12-2019-0054","url":null,"abstract":"\u0000Purpose\u0000This paper aims to develop a forecasting tool for the automatic assessment of both environmental and economic benefits resulting from low-carbon investments in the real estate sector, especially when applied in large building stocks. A set of four artificial neural networks (NNs) is created to provide a fast and reliable estimate of the energy consumption in buildings due to heating, hot water, cooling and electricity, depending on some specific buildings’ characteristics, such as geometry, orientation, climate or technologies.\u0000\u0000\u0000Design/methodology/approach\u0000The assessment of the building’s energy demand is performed comparing the as-is status (pre-retrofit) against the design option (post-retrofit). The authors associate with the retrofit investment the energy saved per year, and the net monetary saving obtained over the whole cost after a predetermined timeframe. The authors used a NN approach, which is able to forecast the buildings’ energy demand due to heating, hot water, cooling and electricity, both in the as-is and in the design stages. The design stage is the result of a multiple attribute optimization process.\u0000\u0000\u0000Findings\u0000The approach here developed offers the opportunity to manage energy retrofit interventions on wide property portfolios, where it is necessary to handle simultaneously a large number of buildings without it being technically feasible to achieve a very detailed level of analysis for every property of a large portfolio.\u0000\u0000\u0000Originality/value\u0000Among the major accomplishments of this research, there is the creation of a methodology that is not excessively data demanding: the collection of data for building energy simulations is, in fact, extremely time-consuming and expensive, and this NN model may help in overcoming this problem. Another important result achieved in this study is the flexibility of the model developed. The case study the authors analysed was referred to one specific stock, but the results obtained have a more widespread importance because it ends up being only a matter of input-data entering, while the model is perfectly exportable in other contexts.\u0000","PeriodicalId":44570,"journal":{"name":"Journal of European Real Estate Research","volume":"186 1","pages":"357-385"},"PeriodicalIF":1.3,"publicationDate":"2020-08-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74415679","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-08-12DOI: 10.1108/jerer-04-2020-0023
Levent Sumer, B. Ozorhon
Purpose Under the current Coronavirus Disease 2019 (COVID-19) pandemic circumstances where the gold prices are increasing and the stocks are in free fall, this research aims to compare the returns of gold prices and Turkish real estate investment trust (T-REIT) index by covering the 2008 global financial crisis, 2018 Turkish currency crisis and 2020 COVID-19 pandemic-based economic crisis periods and examine the effects of the returns of gold and the T-REIT index on each other, a research area that has been limited in the literature Design/methodology/approach For the empirical analysis, vector auto regression model was used, and Augmented Dickey-Fuller and Granger causality tests were also conducted The average returns were compared with the coefficient of variation analysis Findings The results of the study exhibited that except for the 2008 global financial crisis period, 2018 Turkish currency crisis and 2020 COVID-19 pandemic-based economic crisis, the T-REIT index performs better than gold prices, but it is a riskier instrument, and both investment instruments do not affect the returns of each other The segmentation of both instruments recommends the fund managers including both tools for diversification of a portfolio Research limitations/implications In Turkey, gold prices are valued based on the fluctuations of the global gold prices, as well as the Turkish Lira/US Dollar currency exchange rates The effect of the exchange rates may be considered in future studies, and the study may be conducted based on the USD values of the T-REIT index and global gold prices Further studies may also include the comparison between the T-REIT index returns and a set of commodities such as the Goldman Sachs Commodity Index This study covered only the first five months of 2020 to analyze the COVID-19 pandemic-based economic crisis initial effects, and a successor study is also recommended by including more new data of the post-COVID-19 pandemic and comparing both results Practical implications The results of the research are expected to contribute to the REIT literature and give insight to investors about their investment choices while including both investment tools in their portfolio, especially for the future conditions of the new COVID-19 pandemic-based economic crisis Social implications The study may provide insight for individuals, especially those who are considering possible investment options in the Turkish real estate market in the post-COVID-19 pandemic crisis Originality/value Gold and real estate have always been considered as important investment instruments Gold is commonly accepted as a safe haven in the literature, and the REITs are considered as long-term investment instruments by many scholars While gold prices increase in the windy periods, the returns of real estate investments have more cyclical movements based on mostly the macroeconomic conditions and its integration with stock markets, yet the real estate is a common long-term inve
{"title":"Investing in gold or REIT index in Turkey: evidence from global financial crisis, 2018 Turkish currency crisis and COVID-19 crisis","authors":"Levent Sumer, B. Ozorhon","doi":"10.1108/jerer-04-2020-0023","DOIUrl":"https://doi.org/10.1108/jerer-04-2020-0023","url":null,"abstract":"Purpose Under the current Coronavirus Disease 2019 (COVID-19) pandemic circumstances where the gold prices are increasing and the stocks are in free fall, this research aims to compare the returns of gold prices and Turkish real estate investment trust (T-REIT) index by covering the 2008 global financial crisis, 2018 Turkish currency crisis and 2020 COVID-19 pandemic-based economic crisis periods and examine the effects of the returns of gold and the T-REIT index on each other, a research area that has been limited in the literature Design/methodology/approach For the empirical analysis, vector auto regression model was used, and Augmented Dickey-Fuller and Granger causality tests were also conducted The average returns were compared with the coefficient of variation analysis Findings The results of the study exhibited that except for the 2008 global financial crisis period, 2018 Turkish currency crisis and 2020 COVID-19 pandemic-based economic crisis, the T-REIT index performs better than gold prices, but it is a riskier instrument, and both investment instruments do not affect the returns of each other The segmentation of both instruments recommends the fund managers including both tools for diversification of a portfolio Research limitations/implications In Turkey, gold prices are valued based on the fluctuations of the global gold prices, as well as the Turkish Lira/US Dollar currency exchange rates The effect of the exchange rates may be considered in future studies, and the study may be conducted based on the USD values of the T-REIT index and global gold prices Further studies may also include the comparison between the T-REIT index returns and a set of commodities such as the Goldman Sachs Commodity Index This study covered only the first five months of 2020 to analyze the COVID-19 pandemic-based economic crisis initial effects, and a successor study is also recommended by including more new data of the post-COVID-19 pandemic and comparing both results Practical implications The results of the research are expected to contribute to the REIT literature and give insight to investors about their investment choices while including both investment tools in their portfolio, especially for the future conditions of the new COVID-19 pandemic-based economic crisis Social implications The study may provide insight for individuals, especially those who are considering possible investment options in the Turkish real estate market in the post-COVID-19 pandemic crisis Originality/value Gold and real estate have always been considered as important investment instruments Gold is commonly accepted as a safe haven in the literature, and the REITs are considered as long-term investment instruments by many scholars While gold prices increase in the windy periods, the returns of real estate investments have more cyclical movements based on mostly the macroeconomic conditions and its integration with stock markets, yet the real estate is a common long-term inve","PeriodicalId":44570,"journal":{"name":"Journal of European Real Estate Research","volume":"108 1","pages":""},"PeriodicalIF":1.3,"publicationDate":"2020-08-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80840378","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-07-30DOI: 10.1108/jerer-09-2019-0031
R. Wiśniewski, Justyna Brzezicka
Purpose This paper aims to analyse globalisation, localisation and glocalisation on the real estate market and define the characteristic features of a glocal real estate market (GREM). The GREM involves real estate properties and real estate products, as well as linking the local and global dimensions of real estate market. Further aims of the study were to provide a methodology for developing the glocal real estate market index (GREMI), and compare selected European markets by analysing their glocalisation potential. Design/methodology/approach A novel method of identifying and assessing the GREM was prepared in the work. The methodology provides tools for calculating the GREMI. This is an index based on a few dozen variables from various thematic scopes, describing the glocalisation potential of a selected market, calibrated to a range <0, 1>. GREMI values were calculated for 12 countries, which accessed European Union (EU) in 2004. The sample covers period from 2004 to 2017. Findings The study shows that the GREMI continues to increase in all countries over time and the results are becoming synchronised. Romania is a country with the highest number of minimum GREMI values in all years (2004–2017). The highest values of the GREMI were determined in Estonia over the period of nine years (2004–2006, 2008 and 2013–2017). Research limitations/implications The prepared index may be applied to analyse different real estate markets, though the necessity to select an identical set of variables for analysis to allow for comparing between markets is a limitation for applying the method. The actual selection of variables is also a study limitation, which was of an opening nature to research in this scope and may be disputable. Originality/value This paper provides the original methodology of the GREMI index for countries joining the EU from 2004 onwards.
{"title":"Glocal real estate market: evidence from European Countries","authors":"R. Wiśniewski, Justyna Brzezicka","doi":"10.1108/jerer-09-2019-0031","DOIUrl":"https://doi.org/10.1108/jerer-09-2019-0031","url":null,"abstract":"\u0000Purpose\u0000This paper aims to analyse globalisation, localisation and glocalisation on the real estate market and define the characteristic features of a glocal real estate market (GREM). The GREM involves real estate properties and real estate products, as well as linking the local and global dimensions of real estate market. Further aims of the study were to provide a methodology for developing the glocal real estate market index (GREMI), and compare selected European markets by analysing their glocalisation potential.\u0000\u0000\u0000Design/methodology/approach\u0000A novel method of identifying and assessing the GREM was prepared in the work. The methodology provides tools for calculating the GREMI. This is an index based on a few dozen variables from various thematic scopes, describing the glocalisation potential of a selected market, calibrated to a range <0, 1>. GREMI values were calculated for 12 countries, which accessed European Union (EU) in 2004. The sample covers period from 2004 to 2017.\u0000\u0000\u0000Findings\u0000The study shows that the GREMI continues to increase in all countries over time and the results are becoming synchronised. Romania is a country with the highest number of minimum GREMI values in all years (2004–2017). The highest values of the GREMI were determined in Estonia over the period of nine years (2004–2006, 2008 and 2013–2017).\u0000\u0000\u0000Research limitations/implications\u0000The prepared index may be applied to analyse different real estate markets, though the necessity to select an identical set of variables for analysis to allow for comparing between markets is a limitation for applying the method. The actual selection of variables is also a study limitation, which was of an opening nature to research in this scope and may be disputable.\u0000\u0000\u0000Originality/value\u0000This paper provides the original methodology of the GREMI index for countries joining the EU from 2004 onwards.\u0000","PeriodicalId":44570,"journal":{"name":"Journal of European Real Estate Research","volume":"369 1","pages":""},"PeriodicalIF":1.3,"publicationDate":"2020-07-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76759044","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-07-29DOI: 10.1108/jerer-07-2020-0042
J. Pike
The purpose of this paper is to suggest that property investors should engage with governments to influence outcomes. Global collaboration is required from the real estate investment community, working closely with governments and legislators, to provide a clear road map to zero carbon emissions. Covid-19 has shown how quickly governments around the world can react with draconian responses, including widespread lockdowns, when faced with an existential threat. What bigger existential threat is there than climate change?,Personal viewpoint from general research.,Three pillars of likely government and legislative interventions are identified; namely, increased and enhanced energy regulation and carbon pricing to force a rapid switch to green energy sources for buildings; an enhanced role for Energy Performance Certificates, standardised methodologies and strict enforcement; and mandatory reporting of financial and physical climate risks based on the Financial Stability Board’s Task Force on Climate-related Financial Disclosures. It is suggested that property investors should now engage with governments to influence outcomes.,Personal viewpoint to encourage greater involvement of the real estate investment community in governmental and regulatory decision making.
{"title":"The future of sustainable real estate investments in a post-COVID-19 world","authors":"J. Pike","doi":"10.1108/jerer-07-2020-0042","DOIUrl":"https://doi.org/10.1108/jerer-07-2020-0042","url":null,"abstract":"The purpose of this paper is to suggest that property investors should engage with governments to influence outcomes. Global collaboration is required from the real estate investment community, working closely with governments and legislators, to provide a clear road map to zero carbon emissions. Covid-19 has shown how quickly governments around the world can react with draconian responses, including widespread lockdowns, when faced with an existential threat. What bigger existential threat is there than climate change?,Personal viewpoint from general research.,Three pillars of likely government and legislative interventions are identified; namely, increased and enhanced energy regulation and carbon pricing to force a rapid switch to green energy sources for buildings; an enhanced role for Energy Performance Certificates, standardised methodologies and strict enforcement; and mandatory reporting of financial and physical climate risks based on the Financial Stability Board’s Task Force on Climate-related Financial Disclosures. It is suggested that property investors should now engage with governments to influence outcomes.,Personal viewpoint to encourage greater involvement of the real estate investment community in governmental and regulatory decision making.","PeriodicalId":44570,"journal":{"name":"Journal of European Real Estate Research","volume":"7 1","pages":"455-460"},"PeriodicalIF":1.3,"publicationDate":"2020-07-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82618337","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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