Hosted by:

Proudly supported by:

MELBOURNE 2005

CONFERENCE PROGRAM

The 11th Annual Conference of the

Pacific Rim Real Estate Society

January 23 to 27, 2005

held at

The University of Melbourne

Victoria, Australia

www.conferences.unimelb.edu.au/PRRES

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Table of Contents

Welcome from PRRES Board Page v Welcome from Organising Committee Page vi PRRES 2006 Information Page vii Campus Map & Legend Page viii Program at a Glance Page xi Refereed Paper Directory Page xii Conference Session Program Page xiii Information for Session Chairs and Presenters Page xviii PRRES Meetings’ Schedule Page xix Conference Keynote Speakers Page xxi Round Table Presenters Page xxiii The Hosting Universities - Melbourne Page xxv - Monash Page xxvii - RMIT Page xxviii Abstracts Page 1 Author Index Page 91 Special Edition of Pacific-Rim Property Research Journal – Call for Papers Page 93 PRRES Financial Report for 2004 year Page 94 PRRES 2004 AGM Minutes Page 95 PRRES Balance Sheet 2004 Page 97 PRRES Awards Page 99 IRES Information Page 101

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Pacific Rim Real Estate Society

Welcome from the PRRES Board

Welcome to the 11th annual PRRES conference in Melbourne. Melbourne was the venue for the first conference held under the name of PRRES in January 1995 at RMIT. Previous conferences were held under the auspices of the Australian Real Estate Educators. The annual PRRES conference circuit has become an established forum for regional and international property researchers. Strong links have grown between the members of the International Real Estate Society (IRES) of which PRRES is a member. Other members of the IRES network include the American (ARES), European (ERES), Asian (AsRES), African (AfRES), Latin American (LaRES) and Middle East (MeRES) Real Estate Societies. The various Society meetings provide many opportunities for researchers who desire a forum to present their work and develop joint research projects with colleagues in other countries and regions. Since its inception PRRES has sought to develop links with the property industry. This is evident from the continuing sponsorship relationship that is now in place with API (the Australian Property Institute), NZPI (New Zealand Property Institute) and RICS (Royal Institute of Chartered Surveyors). The inclusion of a specific industry forum as a keynote conference session, such as the Round Table on Thursday, has also become an important feature of our three-day event. The PRRES journal, Pacific Rim Property Research Journal, now published four times a year, which together with the annual conference is a key element of PRRES’s strategic objective to promote and foster property research in our region. A special edition of the journal will be devoted to the conference theme ‘property investment’. Details of the call for papers for the special edition are included in this program. We congratulate the joint conference hosts; the University of Melbourne, Monash and RMIT universities and the organising committee for their efforts in organising this conference. We wish all participants a successful and enjoyable conference. PRRES Board Members:

John Flaherty (President) Angelo Karantonis (Executive Director)

John MacFarlane (Treasurer) Richard Reed (Secretary)

Australia: Geoff Page, Chris Eves, George Earl and John Sheehan

New Zealand: Bob Hargraves (President-elect), Sandy Bond (Newsletter editor) and Deborah Levy

ASEAN & Pacific Region: John Loh, Yu Shi Ming, Spike Boydell, Niput Jitprasonk

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Welcome from the Conference Organisers

We are delighted to welcome you to Melbourne for the 11th annual PRRES conference. The conference programme is the result of a joint venture between the three participating universities with the University of Melbourne providing the venue for the three (four) – day event. Approx. 90 papers have been submitted for presentation and a record number, some 30 papers, were submitted for inclusion in the refereed section of the conference. Presenters hail from all parts of Australia, New Zealand and the Pacific Rim region with a very substantial number of presenters from Europe, Asia and North America. Our special thanks to our keynote speakers Professors Neil Crosby, Crocker Liu, Michael Goldberg and C F Cirmans. Our thanks also to Anthony DeFrancesco for organising the Round Table on property markets. We hope that the conference and your visit to Melbourne will be an enjoyable and rewarding experience. Conference Organising Committee

Professor Jon Robinson Associate Professor Greg Schwann Faculty of Architecture Building and Planning Department of Finance University of Melbourne Faculty of Economics & Commerce University of Melbourne Dr Richard Reed Mr John Flaherty Faculty of Architecture Building and Planning Department of Accounting and Finance, University of Melbourne Faculty of Business and Economics Monash University Ms Janne Morrison Mr Ric Lombardo Faculty of Architecture Building and Planning School of Property, Construction & Project University of Melbourne Management Portfolio of Design & Social Context RMIT University Conference Management

Cath Bennett & Jen Westphal Old Physics Building The University of Melbourne VIC 3010 http://www.conferences.unimelb.edu.au/prres/

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PRRES 2006 - New Zealand

The 2006 PRRES conference will be held in New Zealand and hosted by the Department of Property at the University of Auckland. Imagine an urban environment where everyone lives within half an hour of beautiful beaches, hiking trails and a dozen enchanted holiday islands. Add a sunny climate, a background rhythm of Polynesian culture and a passion for outstanding food, wine and shopping – you’re beginning to get the picture of Auckland. Auckland’s blend of islands, Polynesian culture, glistening harbours and modern city environment creates an unbelievable lifestyle ranked amongst the best in the world. Discover why Auckland is one of the best places in the world to live – and visit.

Map - Legend

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LEGEND

Conference Venue: ICT Building, 111 Barry Street..................................... … Grid Reference P6

Official Conference Hotel: - Welcome Reception - Conference BBQ Rydges Carlton Hotel, 701 Swanston Street ..............… Grid Reference O13

Conference Dinner: University House (Building 112) ................................. … Grid Reference E5

Accommodation: St Mary’s College ...................................................... … Grid Reference C12

Union House: Shops............................................................................. Grid Reference E6 Chemist Newsagency Computer Shop Public Telephones (Basement)

Banks: National Bank ................................................................ Grid Reference F6 Natural Philosophy Building

Commonwealth Bank ................................................... Grid Reference E10

Architecture Building

Post Office: Architecture Building ....................................................Grid Reference F10 Melbourne University Book Room: Book Shop (Building 177) ..........................................Grid Reference H5

330 mts fromMain Campus

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PROGRAM

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Conference Program at a glance Sunday 23rd January 2005 (Arrival)

2.00 - 4.00 PM PhD Session - Rydges Carlton Hotel 4.00 - 6.00 PM PRRES pre-AGM Board Meeting at Rydges Carlton Hotel 5.30 - 7.00 PM Welcome Reception and Registration at Rydges Carlton

Hotel

Monday 24th January 2005 (Day one)

9.00 AM Introduction and welcome - Professor Jon Robinson 9.20 - 10.05 Keynote address - Professor Neil Crosby 10.50 - 12.30 Parallel sessions 12.30 - 1.15 Lunch 1.15 - 1.50 Professor Miles Lewis a presentation on: Melbourne

Architectural styles 1.50 - 3.10 Parallel sessions 3.40 - 5.00 Parallel sessions

Monday evening is a free evening. RICS course leaders dinner 6.30 for 7.00 Karageusian Room, University House Tuesday 25th January 2005 (Day two)

9.00 AM Introduction and welcome 9.20 - 10.05 Keynote address - Professor Crocker Liu 10.50 - 12.30 Parallel sessions 12.30 - 1.15 Lunch immediately followed by: 1.15 - 2.15 PRRES Annual General Meeting in main lecture theatre Food and beverages are not permitted in the lecture rooms 2.15 - 3.15 Parallel sessions 3.45 - 5.05 Parallel sessions

Conference dinner at University House - 6.30 for 7.00 PM After dinner speaker Prof. Mike Goldberg Presentation of the PRRES Achievement Award Wednesday 26th January 2005 Australia Day - no sessions

6.00 PM – 8.00 PM Bar-B-Q Roof Garden, Rydges Carlton Hotel Thursday 27th January 2005 (Day three) - last day of conference

9.00 AM Introduction 9.05 - 9.45 Keynote address - Professor C.F. Sirmans 10.30 - 12.00 Property Industry Round Table 12.30 - 1.15 Lunch 1.15 Parallel sessions 3.00 - 3.30 Conference closing ceremony

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Accepted Refereed Papers by Paper Number (Jan 13, 2004)

C004 Coleman Safe as Houses? Business Risk in Real Estate Investment

C005 Cieleback Agency problems in indirect real estate investing

C007 Susilawati Barriers To Expanding Partnerships For Affordable Rental Housing Investment

C008 Small Valuing your Grandmother: Why customary title is incomparable to Western conceptions of property value

C009 Courchane An Analysis of Mortgage Closing Costs

C011 Mann The impact of negative equity housing on private consumption: HK Evidence

C012 Kauko The Budapest housing market structure from a heterodox economics perspective and with a neural network classification

C014 Dimovski The Gender Composition of Boards of Property Trust IPOs

C015 Chan China’s latest constitutional amendment on land acquisition compensation issues– Does it offer real help to farmers?

C024 Seabrook Multi-Criteria Modelling Of Hotel Investment Decision-Making

C026 Bjornlund Implicit values and explicit prices of water – Do they converge?

C031 Kim The Performance Indicator of Industrial Property Market based on the Location Factors

C033 Small A Christian Understanding of Property: Spiritual themes underlying Western property

C035 Karantonis Risk free profit from property –the government, the risk free partner.

C039 Rossini Using a Hybrid Automated Valuation Model to Estimate Capital and Site Values

C041 Bjornlund Tracing evidence of rational investor behaviour in water markets

C043 Li Boom or gloom: A comparative study of the propensity of firsthome buyers in Beijing and Shanghai

C045 Robson "Seachange," Fact of Fiction

C050 Wu Marketing Environment, Marketing Strategy and Marketing Performance: An Empirical Analysis of Taiwan Residential Property Market

C069 Kupke Survey of investors in the private rental market in South Australia

C071 Mangioni Residential Property Investment – Is Regulatory Change Necessary?

C073 Boyd Stakeholder Impact on Property Education Programs

C074 Boyd The Triple Bottom Line Approach To Property Performance Evaluation

C084 Hargreaves Exploring the yields on residential investment property

C091 Mills Market Analysis Study of the Value Technology Systems to Home Owners

Times Sunday 23rd January 2005 (Arrival Date) 2.00 - 4.00 Phd session - Rydges Carlton Hotel 4.00 - 6.00 PRRES pre-AGM Board Meeting at Rydges Carlton Hotel 6.00 - 8.00 Welcome Reception and Registration at Rydges Carlton Hotel

Times Monday 24th January 2005 (Day One)

9.00 - 9.05 Introduction and Welcome - Professor Jon Robinson 9.05 - 9.10 Professor Ruth Fincher, Dean, Faculty of Architecture Building and Planning 9.10 - 9.15 Professor Robert Brown, Finance Department, Commerce Faculty 9.15 - 9.20 RICS introduces the keynote speaker

9.20 - 10.05 Keynote speaker - Professor Neil Crosby, Department of Real Estate and Planning, University of Reading 10.05 - 10.20 Questions 10.20 - 10.50 Morning Tea and Coffee

Times Day 1 Presentation of Papers (SESSION 1) Room # 1 Room # 2 Room # 3

Topic Miscellaneous - Real Estate Service Sector Valuation - Method and Theory Under Scrutiny Housing Affordability Session Chair: John Flaherty Session Chair: Jon Robinson Session Chair: Richard Reed

10.50 - 11.10 C101 Real Estate Agents and Consumer Service: The Voice of a Busy Market G. Crews, S. Hovell

C078 Price versus value versus worth: a capital market context D. Parker

C043 Boom or gloom: A comparative study of the propensity of first home buyers in Beijing and Shanghai P. Li, A. Karantonis

11.10 - 11.30 C111 Corporate Governance and Real Estate Industry K.W. Schulte, C.Kolb

C112 A Critical analysis of US real estate appraisal methods when used for financial reporting according to the International Financial Reporting Standards (IFRS) F.F. Spies, D.B. Wilhelm

C007 Barriers to Expanding Partnerships for Affordable Rental Housing Investment C. Susilawati, L. Armitage, M. Skitmore

11.30 - 11.50 C086 Towards understanding real estate franchises in Australasia S. Flint-Hartle

C008 Valuing your Grandmother: Why customary title is incomparable to Western conceptions of property value G. Small, J. Sheehan

C051 Urging Reforms: Housing Subsidies in Hungary A. Dobricza

Topic Valuation Practice Housing - Planning and/or Development and/or Investment

11.50 - 12.10 C083 Market making in the Real Estate Market: The Case of Real Estate Services E. D'Arcy

C082 A Model for Valuing Development Land. Discounted Cash Flow and Hypothetical Subdivision Budget Formula Methodology E. Gamby, P. Bendall, A. Smee

C059 Some attributes of a second tier property market in transitional China S.S. Han

12.10 - 12.30 C110 Revising the Conceptual Basis of Price: Its impacts on Agency Agreements H. Antoniades, G. Small

C031 The Performance Indicator of the Industrial Property Market Based on Location Factors J. Kim

C077 The Constraints of Housing Supply in Fiji A. Hassan

12.30 - 1.15 LUNCH – Mezzanine Level, ICT Building (Food and beverages are not permitted in the lecture rooms) 1.15 - 1.50 Professor Miles Lewis - A Presentation on Melbourne Architectural Styles

Times Day 1 Presentation of Papers (SESSION 2) Topic Miscellaneous - Business Location Choice Valuation Practice Property Title/Rights

Session Chair: John Loh Session Chair: Peter Wills Session Chair: Graham Crews 1.50 - 2.10 C102 Broadband Technology: An appraisal of the

availability and use by small office occupiers and the potential impact upon the office market V. Spurge

C068 Current rural valuation practice: A survey of NSW valuers and agribusiness managers C. Eves

C023 Myth, Embeddedness and Tradition: an Examination of Property Rights grounded on a Fijian Case Study S. Boydell

Topic Miscellaneous - Building Management Tools

2.10 - 2.30 C094 Challenges in the Assessment of the Residual Service Life of Aging Buildings A. Shah, Prof. A. Kumar

C027 Integrating Artificial Neural Networks and GIS for Single-property Valuation A.G. Sarip

C033 A Christian Understanding of Property: Spiritual themes underlying Western property G. Small

2.30 - 2.50 C039 Using a Hybrid Automated Valuation Model to Estimate Capital and Site Values P. Rossini, P. Kershaw

C109 Compensation Models for Native Title R. Fortes

2.50 - 3.10 C015 China's latest constitutional amendment on land acquisition compensation issues - Does it offer real help to farmers N. Chan

3.10 - 3.40 Afternoon Tea and Coffee Times Day 1 Presentation of Papers (SESSION 3)

Topic Housing - Demographic and Socioeconomic Influences

Securitisation - Performance Measurement and/or Attribution Valuation - Valuing Special Property Attributes

Session Chair: Terry Boyd Session Chair: Lyn Armitage Session Chair: Ann Brownell 3.40 - 4.00 C045 Sea Change Fact or Fiction?

K. Robson C022 Factors Influencing the performance of listed

property trusts G. Newell

C085 Property valuation and analysis applied to environmentally sustainable development J. Robinson

4.00 - 4.20 C060 Identifying linkages between generations and community development R. Reed, N. Conisbee

C049 Efficient Frontiers and Performance Measurement for LPTs J. Flaherty, V. Fang, R. Lombardo

C091 Market Analysis Study of the Value Technology System to Home Owners A. Mills, P. Williams

Topic Housing - Investigations, Forecasts or Predictions of Housing Market Phenomena Securitisation - Price or Value drivers

4.20 - 4.40 C062 The impact of retiree migration on the Spanish housing market - a case study P. Taltavull

C030 Assessing the Time-Varying Interest Rate Sensitivity of Real Estate Securities P.Wilson, R.Zurbruegg

C106 Valuing ground rentals - modelling the land value percentage rate R.L. Jefferies

4.40 - 5.00 C001 Analysis of Accuracy of Housing Commencement Forecasts in Australia A. Mills, D. Harris, R. Reed

C042 Focus, Liquidity and Firm Value - An Empirical Study of Listed Property Trusts in Australia J. Hedander

C079 Urban trees - valuation issues and challenges D. Parker

5.00 – 6.00 API Lecturer Meeting – Room # 2

Times Tuesday 25th January 2005 (Day Two) 9.00 - 9.05 Introduction and Welcome 9.05 - 9.10 Professor Jayne Godfrey, Department of Accounting & Finance, Monash University 9.10 - 9.15 Professor Ron Wakefield, School of Property, Construction and Project Management, RMIT University 9.15 - 9.20 API introduces the keynote speaker

9.20 - 10.05 Keynote speaker - Professor Crocker Liu, Stern School of Business, New York University (NYU) 10.05 - 10.20 Questions 10.20 - 10.50 Morning Tea and Coffee

Times Day 2 Presentation of Papers (SESSION 1) Room # 1 Room # 2 Room # 3 Room # 4

Topic Housing - Investigations, Forecasts or Predictions of Housing Market Phenomena

Securitisation - Risk Measurement and/or Exposure Valuation - Valuing Special Property Attributes Property Profession, Education and Training

Session Chair: Greg Schwann Session Chair: John Flaherty Session Chair: Geoff Page Session Chair: Kath Robson 10.50 - 11.10 C003 Urban Structure and Change in Brisbane:

Exploring Locations for Property Price Premiums S. Huston, T. Yigitcanlar, H. Han

C028 The Distributional Characteristics of REIT Returns and Risk Measurement Implications S. Stevenson, E. Hutson

C075 The Branding of Suburbs D. Levy

C092 Internationalization of Real Estate Programs K.W. Schulte, G. Schulte-Daxbok

11.10 - 11.30 C103 Trading Rules in Housing Markets - What can we learn? G. Costello

C021 The changing risk profile of listed property trusts G. Newell

C087 A comparative analysis of gold mining activities on residential property values E. Gamby, P. Reid

C016 Facilities Management Education - Is it meeting global industry expectations? C. Warren, S. Heng

11.30 - 11.50 C006 Prices and rents in the German residential sector: an asset pricing view M. Cieleback

C017 Real Estate Risk Exposure of Equity Real Estate Investment Trusts M.L. Lee, K.C.H. Chiang

C088 Modeling the value of view in real estate: A 3-D GIS Approach S-M. Yu, S-S. Han, C-H. Chai

C073 Stakeholder Impact on Property Education Programs T. Boyd

11.50 - 12.10 C012 The Budapest housing market structure from a heterodox economics perspective and with a neural network classification T. Kauko

C029 Estimation of Listed Property Trust Beta's S. Stevenson, R. Kishore

C053 Career mentoring preferences of undergraduate property and construction students V. Francis, L. Armitage

12.10 - 12.30 C072 An alternative House Price Index Method M. Hoesli, S. Bourassa, J. Sun

C098 The Linkage beween Listed Property Trusts and Stocks based on Systematic and Unsystematic Risks R. Kishore

C013 Reputation and professional deontology: The Ethic Code of Spanish Real Estate Professional Bodies P. Taltavull, A. Raga, R .Duenas

12.30 - 1.15 LUNCH – Mezzanine Level, ICT Building 1.15 - 2.15 PRRES Annual General Meeting in main lecture theatre (food and beverages are not permitted in the lecture rooms)

Times Day 2 Presentation of Papers ( SESSION 2 ) Topic Water Studies Real Estate Investment and Finance Property Profession, Education and Training

Session Chair: Angelo Karantonis Session Chair: Chris Eves Session Chair: Amanda McCallum 2.15 - 2.35 C026 The Valuation of Water Rights - A Comparison of

Valuation Methodologies B. O'Callaghan, H. Bjornlund

C005 Agency problems in indirect real estate investing M. Cieleback

C054 The Valuation Profession in Australia: Profile, Analysis and Future Directions P. Elliott, C. Warren

2.35 - 2.55 C041 Factors impacting on farmers willingness to pay for water in markets for permanent water H. Bjornlund, P. Rossini

C009 An Analysis of Mortgage Closing Costs M. Courchane, D. McManus, P.M. Zorn

C095 Professional Socialization of Valuers: Graduate Experience G. Page

2.55 - 3.15 C080 Trading in Australia's Greatest Liquid Asset: WaterJ. Keogh

C071 Residential Property Investment - Who is qualified to provide advice V. Mangioni

3.15 - 3.45 Afternoon Tea and Coffee Times Day 2 Presentation of Papers ( SESSION 3 ) Topic Corporate Real Estate Housing Sector - Special Topics Real Estate Investment & Finance

Session Chair: Paul Kershaw Session Chair: Peter Elliott Session Chair: David Parker 3.45 - 4.05 C070 Aligning Corporate Real Estate and Business

Strategies P. Wills

C011 The impact of negative equity housing on private consumption: HK evidence K.F. Mann, R. Tse

C065 Risk-return profiles in the UK regeneration market S. McGreal, A. Adair, J. Berry

4.05 - 4.25 C067 Optimization of Performance in Facilities Management A. Kwok, C. Warren

C050 Marketing Environment, Marketing Strategy and Marketing Performance: An Empirical Analysis of Taiwan Residential Property Market C-W. Wu

C038 A Term Structure of Commercial Lease Real Estate Returns F. Pretorius, M.K.S. Tse, KW. Chau

4.25 - 4.45 C018 Corporate Real Estate Disposition and Agency Costs of Managerial Discretion M.L. Lee

C061 The Melbourne 2006 Commonwealth Games - What does it mean for the local property market? R. Reed, H. Wu

C048 Modeling the Australian Investment Property Universe D. Higgins

4.45 - 5.05 C076 Ownership and community assets: Managing change processes in strategic local government corporate property management C. Heywood, G. Missingham, R. Kenley

C064 Floor measurement strategies in Germany - an empirical study S.Kippes

7.00 – 11.00 Conference Dinner at University House (attendees to assemble at venue at 6.30pm) After Dinner Speaker Professor Mike Goldberg Presentation of the PRRES Achievement Award

Times Wednesday 26th January 2005 (Day Three) - AUSTRALIA DAY - no sessions 9.00 - 10.30 PRRES Board Meeting at Rydges Carlton Hotel

11.00 - 12.30 PRPRJ Board Meeting at Rydges Carlton Hotel 1.00 - 2.00 API Course Leaders' Meeting 6.00 – 8.00 Bar-B-Que at Roof Garden, Rydges Carlton Hotel - the Official Conference Hotel (situated at 701 Swanston Street)

Times Thursday 27th January 2005 (Day Four) - Last Day of Conference 9.00 – 9.05 Professor Graeme Newell to introduce keynote speaker: C.F. Sirmans 9.00 – 9.45 Keynote Speaker: Professor C.F. Sirmans - Director, Real Estate Center, William N Kinnard Jr Professor of Real Estate and Finance, School of Business, University of Connecticut

9.45 – 10.00 Questions 10.00 - 10.30 Morning Tea and Coffee

Industry Round Table Chaired by Dr Anthony De Francesco Speaker: Dr David Rees (Director, Investment Strategy, Knight Frank) Topic: Economic Overview of Markets Speaker: Nick Vondras (LPT Analyst, Goldman Sachs JB Were) Topic: LPTs

10.30 - 12.00 Speaker: Trent Alston (General Manager, Colonial First State Property) Topic: Wholesale Funds Speaker: Bill Grounds (General Manager, Unlisted Funds, Investa Property Group) Topic: Property Syndicates Speaker: Peter Studley (Head of Research, DB RREEF Trust) Topic: Stapled Securities

12:00 - 12.30 Questions 12.30 - 1.15 LUNCH – Mezzanine Level, ICT Building

Times Day 4 Presentation of Papers (SESSION 1) Room # 1 Room # 2 Room # 3

Miscellaneous - Perspectives on Property Sector Performance

Issues Relating to Property Law and/or Taxation Property Cycles

Session Chair: Susan Flint-Hartle Session Chair: Greg Costello Session Chair: Jinu Kim 1.15 - 1.35 C074 The Triple Bottom Line Approach to Property

Performance Evaluation T. Boyd, P. Kimmet

C066 Review of Property Taxation Authorities in Australasia W. Marano, P. Rossini, N. Bray

C093 The Shape of the Property Cycle J. MacFarlane

1.35 - 1.55 C034 Economic Performance Analysis of the Australian Property Sector Using Input-output Tables C. Liu, Y. Song

C035 Risk free profit from property - the government, the risk free partner A. Karantonis

C100 The cyclical nature of tourism accommodation in Melbourne P. Triandos, R. Russell

Housing Sector - Planning and/or Development and/or Investment

1.55 - 2.15 C019 Planning for Housing in the Post-Barker Era G. Meen

C113 The Impact of the Retail Leases Act 2003 in Victoria and the implications of land tax for small business and investors A. Brownell

C010 Hong Kong Property Cycle - A Frequency Domain Analysis K.F. Mann, K.W. Chau

Topic Real Estate Investment & Finance Securitization - Special Issues 2.15 - 2.35 C044 Residential Apartment Development in

Auckland's Central Business District L. Murphy

C084 Exploring the yields on residential investment property B. Hargreaves

C020 The significance of fractional interests in listed property trusts G. Newell

2.35 - 2.55 C069 Survey of Investors in the Private Rental Market in South Australia V. Kupke, W. Marano, P. Rossini

C004 Safe as Houses? Business Risk in Real Estate Markets L. Coleman

C014 The Gender Composition of Boards of Property Trust IPOs B. Dimovski, R. Brooks

3.00 - 3.30 Closing Conference Ceremony

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Information for Session Chairs

• Check that the scheduled presenter(s) is present in the correct location prior to the session and that the required equipment is in readiness.

• Introduce the presenter briefly • Each presenter is given a maximum of 15 minutes to deliver his/her paper

followed by at most 3 minutes of questions/discussion. To allow time to move between presentations the session chair should ensure that each presentation finishes inside the allocated 20 minutes.

• Remind the presenter three (3) minutes before the end of the allocated delivery

time. • Draw the presentation to a close by thanking the speaker and remind the

audience of the next scheduled presentation in your session. • Collect one copy of the presented paper for Conference Management*.

Information for Presenters • The maximum time for the oral presentation of each paper is 15 minutes. • You will be reminded three (3) minutes before the end of the oral presentation to wind up your presentation. • An overhead projector will be provided in each room for use by presenters. If specialised equipment is required arrangements should be made in advance with Conference Management. • Ensure that an electronic copy and a hard copy of your paper is given to Conference Management. • PowerPoint presentations should be pre-loaded. Please contact Conference Management to organise an appropriate time. • All presenters should have 30 copies of their paper available for distribution at their presentation.

All papers presented at the conference will be available at the PRRES web site about one month after the conference. http://business2.unisa.edu.au/prres

*Conference Management phone number during the PRRES Conference: 8309 1077 or 0425 761 077

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PRRES Meetings’ Schedule Board members Sunday 23 January PRRES Board meeting (Part I) Time: 4:00 – 6:00 PM Location: Rydges Carlton Hotel Tuesday 25 January PRPRJ (Journal) Board meeting Time: 5:15 – 6:15 PM Location: ICT Building, 111 Barry Street Thursday 27 January PRRES Board meeting (Part II) Time: 8:00 – 9:00 AM Location: ICT Building, 111 Barry Street All Conference delegates – Annual General Meeting Tuesday 25 January PRRES AGM Time: 1:15 – 2:15 PM Location: Lecture Theatre 1, ICT Building, 111 Barry Street

Please note - food and beverages are not permitted in the lecture rooms. Conference Venue: University of Melbourne ICT Building, 111 Barry Street, Carlton Rydges Carlton Hotel: 701 Swanston Street, Carlton

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CONFERENCE KEYNOTE SPEAKERS

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Neil Crosby, Ph.D, ARICS is Professor of Real Estate in the Department of Real Estate and Planning at the University of Reading. He is a Chartered Surveyor with experience of property management and valuation practice as well as a long academic career at Nottingham Trent and Oxford Brookes Universities, before moving to Reading in 1994. He specializes in commercial property appraisal and the commercial

Landlord and Tenant relationship and has undertaken a series of major research studies funded by the UK Government and the UK property industry in these areas since his return to Reading. In 2002 he was awarded the International Real Estate Society’s annual achievement award for his work in real estate research, education and practice. He is a frequent speaker on property valuation related topics at international and national academic conferences and has given keynote addresses at the World Valuation Congress, mainly for practitioners, and The Pacific Rim Real Estate Society Conference, mainly for academics, both in Australia. He sits or has sat on various education and research committees for the Investment Property Forum, Property Valuation Forum and the Royal Institution of Chartered Surveyors and sits on the editorial boards of three of the major international academic real estate journals. He was the academic member of both the two major RICS committees which have examined property valuations in the last 10 years, the Mallinson Committee in 1994 and the Carsberg Committee in 2001 and has recently sat on the Editorial Board of the new 2003 Red Book.

Crocker Liu, Associate Professor of Finance. BBA Real Estate/Finance (1976) University of Hawaii, MS Real Estate (1980) Wisconsin, PhD Finance/Real Estate (1988) Texas. Professor Liu joined the Stern School of Business in 1988. He is currently the Co-Editor of the Journal of Real Estate Economics, and is on the editorial board of the Journal of Property Research. He also was on the editorial board of the Journal of Real Estate Finance and Economics and the Journal of Real Estate Finance. He currently serves on the advisory board of the Real Estate Research Institute. He has served on the board of directors of the American Real Estate and Urban Economics Association (AREUEA).

His research interests are focused on issues in real estate finance, particularly topics related to agency, organizational forms, market efficiency, and valuation. His research has been published in the Review of Financial Studies, the Journal of Financial Economics, the Journal of Business, the Journal of Financial and Quantiative Analysis, the Real Estate Economics Journal (formerly known as the AREUEA Journal) and the Journal of Real Estate Finance and Economics. Professor Liu won the AREUEA doctoral dissertation award and also won a 1991 postdoctoral award from the Homer Hoyt's Weimer School of Advanced Studies in Real Estate and Land Economics. He has received the "Best Research Paper Award" from the American Real Estate and Urban Economics Association in 1992 (co-authored with Aswath Damodaran), and 1993-1994 (co-authored with Jianping Mei). In addition to this, Crocker is the past winner of the Wiley Award (1990) for Best Paper in the Journal of Real Estate Research and was named Undergraduate Teacher of the Year (1996-1997 and also 2001-2002) and Executive MBA in Finance Teacher of the Year (1997, 1999). In 1999, he became a Distinguished Teaching Fellow. He has been a professional realtor in Hawaii for a number of years and was a Vice President with Prudential Real Estate Investment Group. He has consulted with RREEF, Milliman and Robertson, and Standard and Poors among others.

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Michael A. Goldberg is the Herbert R. Fullerton Professor of Urban Land Policy in the Sauder School of Business and the Associate Vice President International at the University of British Columbia. He was Dean (1991-97), and at UBC since 1968 after finishing a PhD in Economics at the University of California at Berkeley. He has been Chair of the Real Estate Foundation (1988- 91) and a governor (1985-92); was a Commissioner of the British Columbia Housing Management Commission (1989-1992); was a member of the Deposit Insurance Advisory Committee serving Canada’s Minister of

Finance (1992-94); is a member of the Investment Committee of the B.C. Workers Compensation Board; is or was on the Boards of Directors of Redekop Properties (1994- 2000), Catamaran Ferries International (1996-97); Imperial Parking Ltd. (1991-94); Vancouver Land Corporation (1991-93) and of Lend Lease Global Properties Fund (2001-present). He was the Chair (1992-94) (Vice-Chair 1991-92) of the Canadian Federation of Deans of Management and Administrative Studies, and on the International Marketing Committee of the American Assembly of Collegiate Schools of Business (1993-7). His research has continued to focus on cities and real estate markets, increasingly in an international setting as in his book The Chinese Connection: Getting Plugged in to Pacific Rim Real Estate, Trade and Capital Markets, (Vancouver: UBC Press, 1985) which examines real estate investment behaviour of Southeast Asian ethnic Chinese. He has also worked widely in housing and property markets and policy, advising businesses, trade associations and governments at all levels around the world on housing and real estate. In sum, he has wholly or partly authored 9 books and more than 200 academic and professional articles largely dealing with facets of real estate and urban/regional economic analysis and policy.

C. F. Sirmans is the William N. Kinnard, Jr. Professor of Real Estate and Finance and Director of the Real Estate Center at the University of Connecticut. He has also taught at the University of Illinois, University of Georgia and Louisiana State University. He has published articles in numerous real estate, finance and economics journals including the Journal of Financial Economics, Journal of Finance, Quarterly Journal of Economics, Review of Economics and Statistics, Real Estate Economics, Journal of Law and Economics, Journal of Legal Studies, Journal of Real Estate Finance and Economics,

Journal of Urban Economics, and others. His research interests include spatio-temporal modeling of real estate prices, real estate securitization and real property law and economics. He has served as a consultant to a variety of real estate professional associations, government agencies and real estate firms. Professor Sirmans specializes in the analysis of real estate. He has written, lectured, and consulted extensively on a wide range of real estate topics, including real estate investments, mortgages, lease valuation, and housing.

ROUND TABLE SPEAKERS

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Session Chair:

Anthony De Francesco is Head of Research at Colonial First State Property. He is responsible for developing House views on (direct and listed) property markets and undertaking strategic research on property investment. Anthony has over 10 years experience in various research roles, including 5 years in property research. Anthony is involved in client presentations and seminars. Anthony’s research experience involved reviewing international markets

(both economic and property fundamentals). Prior to joining CFSP Anthony was Senior Quantitative Analyst with Commsec, responsible for asset allocation modelling. Prior to this, Anthony worked at Lend Lease for over three years where he was Head of Research.

David Rees

Director – Investment Strategy, Knight Frank David is responsible for the research activities of Knight Frank in the Australasian region. The purpose of research is to provide information and insights to commercial and institutional clients, as well as to assist them in the development of optimal strategies for the management and performance of their property assets. Prior to joining Knight Frank David was at Commonwealth Bank where he was Head of Investment Strategy, responsible for

advising on investment opportunities across the major asset classes – property, shares, bonds and a range of other securities. David has an extensive background in research and investment banking. He is involved in the education programs of the Securities Institute of Australia and the Property Council of Australia, as well as providing corporate briefings to a range of financial and corporate clients.

Nick Vrondas Current role (since 2000): Joint Head of Real Estate Equities Research at Goldman Sachs JBWere. Researching and analysing listed property securities such as Stockland, Mirvac, Investa and Multiplex along with a specialisation in Office trusts such as ING Office and Commonwealth Property Office. Nick also covers US related trust Macquarie ProLogis and has a special interest in US related Australian listed securities. Nick is responsible for a team of 4 analysts.

Former roles: (1998-2000) Senior Analyst covering the Office and Industrial sectors.at Burdett Buckeridge & Young.

(1993-1998) JLW Advisory in the role of Economist and Econometrician with a view to establishing econometric models for forecasting returns in most of the national property sub-markets, and to establish performance monitoring models for those markets. Education: B Ec (Economics and Econometrics) University of New South Wales

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Trent Alston

General Manager, Wholesale Funds Trent oversees the operation of 10 wholesale funds and two mandates that total over $7 billion of investment grade real estate assets under management. In this role, he has overall responsibility for developing Colonial First State Property’s unlisted property funds management business. Trent commenced with Colonial First State Property in July 1998. With over 15 years experience, Trent has held a number of senior

management positions within the group including Fund Manager of several funds and more recently General Manager of Colonial First State Property Corporate Portfolios. In November 2001, Trent was appointed General Manager, Corporate Portfolios, responsible for the strategic planning, implementation and management of Commonwealth Bank of Australia’s 1,000,000sqm property portfolio. Trent was previously with Lend Lease for 13 years, working across both domestic and international projects in various roles including project manager, developer, investor and fund manager.

Bill Grounds General Manager Unlisted Funds at Investa Property Group. The Unlisted Funds business has approximately $1b of property funds under management across eight property syndicates and two wholesale funds. Investa is one of Australia’s largest property companies and is the largest listed owner of commercial office buildings in Australia and is the fourth largest property syndicator.

Prior to Investa Bill held various project and senior management positions during his 14 years at Lend Lease including Project Director Stage1 Olympic Games Projects, General Manger NSW and Executive Director of Civil & Civic and Lend Lease Property Services.

Peter Studley

Peter is Head of Research for DB RREEF a major property investment group managed in partnership with Deutsche Bank. He is responsible for investment strategy and the view on real estate markets across the Asia Pacific region. Peter holds a Masters of Applied finance and an Associate Diploma in Valuation. He is an associate of the Australian

Property Institute and an active member on the Property Council of Australia Capital Markets Committee (NSW). His previous roles have been in the fields of property finance and economics. The DB RREEF group manages more than 200 properties throughout Australia and the US valued at more than nine billion dollars. This puts them in the top six property fund managers in Australia. Along with a variety of private property funds and syndicates, DB RREEF manages DB RREEF Trust, a diversified stapled entity on the Australian Stock Exchange.

CONFERENCE HOSTS

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Faculty of Architecture, Building & Planning

The Faculty of Architecture Building & Planning (ABP) has an outstanding reputation for educating top-class professionals in the wide range of disciplines involved in the planning, design, production and management of the built and natural environment. ABP offers undergraduate and postgraduate courses in property in construction, leading to careers in asset management, property development, investment appraisal, valuation, project management, building surveying, construction management, construction technology, and quantity surveying/ construction economics. Our programs are attractive to those looking for a career change as well as to property and construction professionals wishing to extend their professional reach and/ or develop a particular area of interest. Our courses are accredited by a wide range of organization [depending on subjects undertaken], including the Australian Institute of Building, Australian Institute of Quantity Surveyors, Australian Property Institute, Australian Institute of Building Surveyors, Malaysian Board of Quantity Surveyors, Singapore Institute of Surveyors and Valuers, Royal Institution of Chartered Surveyors, and the Hong Kong Institute of Surveyors. Postgraduate Programs Research The Master of Building (by thesis) can be undertaken in areas such as: • property investment and development • corporate real estate • property valuation and analysis • facilities planning and management • building construction management • building economics and quantity surveying • construction technology ABP’s PhD students are currently researching in the areas of: • property management • construction materials • construction management

Coursework • Master of Property and Construction (by

Coursework) • Post/Graduate Diploma in Planning and

Design (Property and Construction) • Graduate Diploma in Building Surveying • Graduate Diploma in Property Valuation

Undergraduate Programs • Bachelor of Planning and Design (Property and Construction) • Bachelor of Property and Construction Strategic Research: ABP and Industry ABP has strong research relationships with industry. Collaborative research projects provide opportunities for the University of Melbourne and industry to pool their resources and work together to address issues of common interest. Current collaborative projects involving ABP staff include: • the role of perceptions and community values in local government property management (with

a number of municipal councils) • the performance of environmentally sustainable design features in commercial buildings (with

the Construction Industry Institute of Australia and the Public Works Department of Queensland)

• the delivery of on-line tourism information using three-dimensional modelling and interactive multimedia technologies (with Lonely Planet)

For more information: Faculty of Architecture Building and Planning, The University of Melbourne, Vic 3010 Tel: +61 3 8344 6417, Fax: +61 3 8344 5532, Email: abp-info@unimelb.edu.au Web: www.abp.unimelb.edu.au

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http://finance.ecom.unimelb.edu.au/ On behalf of the Department of Finance, I welcome you to the University of Melbourne. The organizing committee has worked hard to put together a great conference so I am sure you are in for a stimulating three days. I hope you also take the time to get to know The University of Melbourne better and the delights of Melbourne itself.

Ours is a young department and a comparative newcomer to the field of property education. To help you get to know us better, I have prepared a few facts about the department. The Department of Finance is one of four teaching departments in the Faculty of Economics and Commerce. The Department was formally established in July 2001 although finance has been taught at the University of Melbourne for many years. There are 24 academic staff in the Department of Finance. Their research interests cover a wide range, including corporate finance, investments, international finance, derivative securities, financial institutions management and real estate finance. The Department is particularly strong in quantitative areas, with several of its staff holding doctorates in mathematics or econometrics. The Department provides its undergraduate students with an education that prepares them for employment as finance specialists and also lays the foundation necessary for postgraduate study. The honours program in Finance is particularly strong; there is a significant excess demand for places in the program, with intake restricted to around 40 students, and many honours graduates go on to highly successful careers in finance. The Department offers several programs at the postgraduate level. The Master of Applied Finance (MAF) prepares graduates in any discipline for a career in finance. The Master of Financial Management (MFM) is designed for students who have completed some study of finance at the undergraduate level but who may not have any work experience. The Master of Commerce (Finance) is a research-oriented qualification and provides one route into doctoral study. There is also an active PhD program, which includes one year of coursework and a major thesis that is externally examined. The Department of Finance offers four subjects in real estate finance: two subjects at the undergraduate level, one subject in the Master of Financial Management and one subject for MCom/PhD research students. The Department hosts a large number of international visiting academics from all over the world. Department staff are involved in continuing education and executive programs and have strong links with practitioners and financial institutions. Rob Brown Head of Department

DDeeppaarrttmmeenntt ooff FFiinnaannccee TThhee UUnniivveerrssiittyy ooff MMeellbboouurrnnee

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www.buseco.monash.edu.au

Professor Jayne Godfrey - Head of Department Department of Accounting and Finance Monash University is Australia's most internationalised university. It has more than 53,000 students from over 100 countries, speaking 90 plus languages. Monash University is a member of the prestigious Group of Eight (Go8) universities, recognised for excellence in teaching, learning, research and graduate outcomes. The Go8 undertake 70% of all research conducted in Australian universities and over half of all basic research conducted throughout Australia.

Named after prominent Australian, Sir John Monash, Monash University was established by an Act of Parliament in 1958 making it the first university to be established in the state of Victoria for 106 years. Since its first intake of students in 1961, Monash has grown from a single campus at Clayton to six campuses in Australia, one in Malaysia and one in South Africa, which was established in 2001, and centres in London, UK and Prato, Italy. The Department of Accounting and Finance, in the Faculty of Business and Economics, offer a range of undergraduate and postgraduate programs. The department consists of three discipline groups; Financial Accounting and Auditing, Management Accounting & Accounting Information Systems and Finance. Graduates who have chosen a particular set of subjects have the educational qualifications to qualify for admission to CPA Australia, The Institute of Chartered Accountants in Australia, the Australasian Institute of Banking and Finance, the Finance and Treasury Association, and the Australian Institute of Risk Management. The Department also offers an honours program and a wide range of postgraduate programs. The Finance discipline group provides support for specialisation in finance-related areas in banking, corporate finance, investment finance, treasury management, fund management, international finance and others. These specialisations could be chosen by students reading for double degrees as well as single degree programs, of which finance specialisation in the Monash MBA is an example. The department has a large number of postgraduate students studying for Masters or PhD degrees, and most of them conduct research related to finance. The electronic resources of the university system include several key accounting, banking, economic, finance and statistical databases, which provide strong resource support for postgraduate research as well as teaching. Several of the staff members are members of the editorial boards of international journals. Some are active in national and international professional associations holding key positions. These activities give the Finance Discipline Group a worldwide network of connections essential for continuing the high quality of research and teaching while paving the way forward to achieve the status of a pre-eminent institution.

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RMIT University

RMIT University enjoys a long tradition of providing working people with work-related education and undertaking research that reflects business and community aspirations. The university provides education and training programs to almost 60,000 Australian and international students. The university’s curriculum is aligned to the demands of the global economy and its international links with more than 190 universities and colleges, allow students and staff to participate in exchanges, study abroad programs, and cooperative teaching and research initiatives. RMIT programs are delivered and awarded in 12 countries through partnership relationships as well as an international campus in Vietnam. RMIT is a partner in more than 20 research centres including 9 Cooperative Research Centres (CRCs). It also provides training and consultancy services to government, industry and community clients both in Australia and internationally. School of Property, Construction and Project Management

The School of Property, Construction and Project Management (PCPM) was created in 2004 by fusing the staff and programs associated with each of the disciplines appearing in the school’s title. The school’s research and teaching activities are described below: PCPM Course-Work Teaching Programmes

Bachelor of Applied Science degrees are offered to undergraduate students in the specialisations of construction management, property management, property and valuation. The programs have been devised to ensure students experience the key aspects of all disciplines and gain a global understanding of the entire industry that they choose to enter. All programs share a common first year, allowing all students to learn and work collaboratively in activities and assessments revolving around a reasonably familiar theme (the residential sector). In the remaining three years a number of common core units and elective opportunities, help reinforce the common threads across all professional areas. All specialisations have an industry work-experience component embedded within their curricula. At the post-graduate level, PCPM offers a Graduate Certificate and Graduate Diploma in Project Management. Graduate Diplomas are also offered in, Valuations and Property. Masters offerings (by course work) include a Master in Business (Property) and a Master in Project Management. PCPM Research

PCPM is committed to researching and publishing the latest innovations and ideas in the construction management, project management and property fields. As well as offering research degrees (Master and Doctor of Philosophy), PCPM undertakes government-funded research through various federal and state government agencies. The School is a member of the Collaborative Research Centre in Construction Innovation, together with other universities and industry partners. PCPM recently expanded its research potential with the appointment of several full-time research fellows and a research director. PCPM International Activities and Experiences

PCPM staff posses well established networks with universities across the globe. They also visit universities as teaching fellows and organize overseas study tours for students. International scholars and industry experts regularly visit the school and provide staff and students with their expertise and ideas on various research areas and issues. Finally, the school is in partnership with the Singapore Institute of Management in the delivery of the Bachelor of Applied Science in Construction Management.

ABSTRACTS

1

C000

Trends in Real Estate Research

C.F. Sirmans Real Estate Center

University of Connecticut Storrs, Connecticut, USA

In this presentation, I summarize some of the recent developments in real estate research and review what are likely to be the major areas of focus in the future. Over the last two decades, there has been much research that has impacted real estate practice. Thus, real estate research is, in my opinion, a real success story. Numerous factors make this an exciting time for real estate research, including unprecedented availability of data and research tools, numerous outlets for research and changing market conditions. Some topics that are currently unresolved and likely to receive increased attention in the future are pricing the spatial effects in real estate markets, managing risks in real estate investments, securitization of equity claims, and comparative analysis of property markets across various countries.

2

C001

Analysis of Accuracy of Housing Commencement Forecasts in Australia

Anthony Mills

D.Harris R.Reed

Dept of Architecture Building & Planning The University of Melbourne

Melbourne, Australia Forecasting is an integral part of all business planning, and forecasting the outlook for housing is of interest to many firms in the housing construction sector. This research measures the performance of a number of industry forecasting bodies; this is done to provide users with an indicator of the value of housing forecasting undertaken in Australia. The accuracy of housing commencement forecasts of three Australian organisations – the Housing Industry Association (HIA), the Indicative Planning Council for the Housing Industry (IPC) and BIS-Shrapnel - is examined through the empirical analysis of their published forecasts supplemented by qualitative data in the form of opinions elicited from several industry ‘experts’ employed in these organisations. Forecasting performance was determined by comparing the housing commencement forecast with the actual data collected by the Australian Bureau of Statistics on an ex-post basis. Although the forecasts cover different time periods, the level of accuracy is similar, at around 11-13% for four-quarter-ahead forecasts. In addition, national forecasts are more accurate than forecasts for individual states. This is the first research that has investigated the accuracy of both private and public sector forecasting of housing construction in Australia. This allows users of the information to better understand the performance of various forecasting organisations. Keywords: Housing, housing commencements, forecasting, accuracy, Australia.

3

C003

Urban Structure and Change in Brisbane: Exploring Locations for Property Price Premiums

Simon Huston T.Yigitcanlar

H.Han CR-SURF

University of Queensland Brisbane, Australia

Over the past five years a combination of short, long term and institutional factors have conspired to fuel the property boom in Australia. In such circumstances price premiums are often paid for residential property. For example an extract from recent developer web publicity states: “it is little wonder that all the premium apartments are selling fast”. The same web page goes on to justify price premiums on the basis of unique architectural design and neighbourhood characteristics. The neighbourhood being advertised is extolled through statements such as “Step out to the hub of James Street’s active contemporary life". Understanding the dynamics of price premiums is important for property developers, Valuers and investors. We clarify the premium concept and dissect a neighbourhood price premium into its current and future components. We then derive a conceptual framework from the revitalisation literature to sort possible information sources about current neighbourhood quality and past neighbourhood quality changes which may be used by some housing market participants in an attempt to identify various price premium locations. Operationalizing the indicators using data from the Brisbane metropolitan area, we conduct a number of analyses of urban structure and structural changes from 1991 to 2001. The analysis included regressions, map representations and discriminant analysis to illustrate how the concept of neighbourhood quality and evolving neighbourhood premiums might manifest themselves. First we isolate “dress circle” suburbs with high current average incomes. These quality premium suburbs benefit from positive ecological externalities such as water or Mount Cootha views or are screened from the dampening effect on values of industrial blight. Information costs make an assessment of future quality particularly difficult. Investors may use indicators of past urban structural change in an, often misguided, attempt to reduce evolutionary risk. Consequently evolutionary premiums may be paid where urban structure has “improved” in the past. We highlight such evolutionary premium locations where urban change has occurred in tenure status, housing density and approvals. These evolving information premium suburbs tend to be core and inner suburbs with dynamic, high status tenants of a “professional standard” to quote from same publicity used earlier. Although we found evidence that urban structural change may provide some information to indicate the location of evolving price premiums, current urban structure is the dominant determinant of prices. Keywords: Premium, information, risk, urban structure, structural change, symbolic analysts

4

C004

Safe as Houses? Business Risk in Real Estate Markets

Les Coleman Department of Finance

The University of Melbourne Melbourne, Australia

The financial risks of investing in real estate are well-covered in applications of modern portfolio theory. However, real estate assets and their associated markets have a number of idiosyncratic characteristics which give them unique risks which are not amenable to elimination through traditional strategies of diversification, insurance, or transfer. These are business risks which arise out of the economy and politics, anomalies in real estate markets, and commercial aspects of real estate ownership. They share a common thread of inadequate knowledge; and they require real estate investors to expend considerable effort on investment strategy, market assessment, property evaluation, and other due diligence processes. This paper examines the sources and consequences of business risks in real estate investment, and points to strategies for their management.

5

C005

Agency problems in indirect real estate investing

Marcus Cieleback MEAG MUNICH ERGO AssetManagement GmbH

Munich, Germany Real estate is of increasing importance in the asset allocation of institutional investors. As direct real estate investment needs a great deal of market know how and is very management intensive, institutional investors are shifting more and more of their real estate investments to indirect forms. There are two general forms of indirect real estate investing, listed and non-listed vehicles. Especially in the second case, agency problems increase for the investors as only very limited data are available to compare different investment options and so far no benchmarks exist for this sector. The paper highlights the different forms of agency problems in indirect real estate investing and shows how institutions, like INREV, can alleviate these problems. Keywords: agency problem, indirect real estate investment, benchmarks JEL-classification

5

6

C006

Prices and rents in the German residential sector: an asset pricing view

Marcus Cieleback

MEAG MUNICH ERGO Asset Management GmbH Munich, Germany

Germany is one of the few industrialized countries that has not seen a general rise in house or apartment prices in recent years. This paper tries to gain insights in the functioning / pricing of the German apartment sector by applying the principles of asset pricing theory to the German residential sector. The analysis is based on rent and price data of apartments in 125 cities in East and West Germany. The analysis shows how the relation of rents and prices is influenced by the risk free rate (10 year government bond yield) and rental growth expectations, proxied by past rental growth data (backward looking expectation formation of buyers). The results are interpreted against the background of changes in the tax law and government subsidies towards housing. Keywords: apartment sector, Germany, asset pricing, JEL-classification

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C007

Barriers to Expanding Partnerships for Affordable Rental Housing Investment

Connie Susilawati

L.Armitage M.Skitmore

Queensland University of Technology Brisbane, Australia

The recent housing boom, experienced across Australian metropolitan markets, has attracted many new investors and resulted in increasing prices across the full range of residential sub-markets for both owner-occupation and investment categories. Of particular concern from a social perspective is the consequential pressure generated in the affordable housing rental market. Moreover, high vacancy rates and modest rental growth in rental housing has caused a deterioration in the investor’s rental yield given these increasing house prices (Powall and Withers, 2004, p.7). In this difficult situation, traditional delivery methods for rental housing are unlikely to continue to attract more investment in this area. Although some innovative proposals - such as public private partnerships in the affordable housing area - have been put forward solutions, many stakeholders continue to hold doubts about the specious attractions of such approaches (Susilawati and Armitage, 2004). This paper reports the results of a survey of affordable housing providers drawn from a range of backgrounds: namely the private sector, government and non-for-profit organisations. Using in-depth interviews, it compares the opinions of these supply side groups, regarding their experiences of the barriers to entry to such partnerships. The findings show agreement across the sector that, for a range of reasons, they have failed to produce better outcomes than would have been expected without the partnership. Further analysis using two-way and three-way cross-tabulation is then used to investigate the importance level between sub-groups. Keywords: Partnerships, affordable housing, rental housing, housing supply, stakeholders

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C008

Valuing your Grandmother: Why customary title is incomparable to Western conceptions of property value

Garrick Small

J.Sheehan Faculty of Design, Architecture and Building

University of Technology Sydney, Australia

8 Compensation for the extinguishment of customary title holdings has proven to be a problematic area of property valuation. In Australia there are few settlements and many have either the character of duress or have been concluded in secret. Attaching a pecuniary value to customary title has important implications for indigenous people that are not understood by Westerners. If one’s relationship to land is viewed as a personal, or even filial, relationship, the indigenous perspective becomes evident. This is contrasted to the material perspective currently adopted by Western peoples. Behind this fundamental difference between the two approaches lies theories of law, morals and even fundamental metaphysical questions that further separate the two systems of property. These various issues are shown to be the necessary content of any discussion of compensation for the Western extinguishment of customary tenure. Keywords: property theory, customary title, valuation methodology

9

C009

An Analysis of Mortgage Closing Costs

Marsha Courchane D.McManus P.M.Zorn

Welch Consulting Silver Spring, USA

Fair and affordable access to credit for borrowers remains an important public policy objective. While some believe that significant improvements in mortgage markets have led to more efficient and lower cost access to a greater variety of mortgage products, others believe that lending practices remain abusive over certain dimensions. Often, the abusive or predatory practices are found to be most prevalent in the subprime market. There remains significant debate, however, over the desirability of some aspects of lending behavior in the prime market as well. In this research, we focus on the use of yield spread premiums (YSPs), a payment made by the lender to a mortgage broker that is reflected in the closing costs paid by the consumer for a loan. We use data collected from a national lender. The data allow us to characterize the types of borrowers in the prime market who use yield spread premiums to finance their mortgage, to address the impact of the yield spread premium on consumer closing costs and net mortgage broker compensation, and broadly to assess market outcomes. We find that borrowers who use yield spread premiums can usefully be segmented into three types: those who finance all of their closing costs using this mechanism, those that use YSPs as part of their financing package, and those that do not incur any yield spread premium in the process. We find that those borrowers who did not use YSPs or those who paid some of their closing costs with YSPs disproportionately pay higher closing costs than did the other segments. We predict that those who paid all their closing costs using YSPs had the lowest costs. Moreover, we find that differences in the closing costs paid, either measured as out-of-pocket costs or closing costs including YSPs, cannot fully be explained by adjusting for related risk factors such as credit score and loan-to-value (LTV) ratios. It is likely that other factors such as search behavior or financial sophistication on the demand side, and the ability of the broker (or lender) to extract rents on the supply side, also affect both the incidence and severity of the impact of yield spread premiums.

10

C010

Hong Kong Property Cycle - A Frequency Domain Analysis

King Fai Man K.W.Chau

Dept of Building and Real Estate Hong Kong Polytechnic University

Kowloon, Hong Kong Property cycle study is a popular topic in the current real estate literature, particularly when the market is near the peak or in low ebb. In this study, some of the stylized facts of the Hong Kong property cycle will be examined and high frequency (monthly) data, partly public and partly proprietary, will be used. Spectral analysis, uni-variate and bi-variate, will be employed to investigate individual cycle and co-movements of two different cycles respectively. Aperiodic movements of price and rental for various segments of the real estate market of Hong Kong are found. However it does not apply to the case of total returns. This result could have important implications for the investors who are thinking of investing in real estate: on an investment horizon of several years, they can buy near the trough and sell near the peak. Co-movements of the direct (various segments) and indirect real estate are also investigated and it is found that residential market is the one that carries the greatest coherence with the indirect market. Retail and office market follow in the pack and the industrial market is least coherent one. Keywords: Hong Kong property cycle, spectral analysis, co-movement

11

C011

The impact of negative equity housing on private consumption: HK evidence

King Fai Man

R.Tse Dept of Building and Real Estate Hong Kong Polytechnic University

Kowloon, Hong Kong Housing is the most important single investment for most individual investors. Thus, negative equity of housing capital would have a major psychological impact on homeowners through a consumption effect. This study explores the wealth effect of housing and stock markets in Hong Kong. More specifically, studies are made on how the aggregate consumption behaviour is influenced by the presence of an extended and protracted negative equity phenomenon in Hong Kong housing assets. Using quarterly data, our results indicate that there is a long-term equilibrium relationship between consumption and the wealth effect of changes in housing wealth. Furthermore this effect appears to be more significant than that associated with changes in financial wealth. Finally, the paper finds that the wealth effect is asymmetrical and that the loss-effect weighs heavier than an equal amount of gain-effect. Keywords: Negative equity housing, consumption, wealth effect

12

C012

The Budapest housing market structure from a heterodox economics perspective and with a neural network classification

Tom Kauko

OTB Research Institute for Housing, Urban and Mobility Studies Delft University of Technology

The Netherlands The development of the housing markets in different European metropolitan areas is of high interest for urban development and real estate markets which are about to globalise. What sort of pricing mechanism is able to explain the house prices in different areas? The general target is a conceptual model, and also, to provide market actors with a useful tool to aid decision making concerning the spatial and functional allocation of resources within an urban housing market environment is of high importance. The Budapest housing market is well-suited for scrutiny from an institutional and evolutionary perspective. The housing market is very fragmented with respect to location; several different house types, age-categories and price-levels, as well as micro-locations, are to be found side by side. It is an extremely patchy and multi-faceted setting, and running the data with neural network modelling techniques, namely the self-organizing map (the SOM) and the learning vector quantification (the LVQ), together with conducting the conceptual level analysis using a heterodox economics framework and some qualitative material, sheds some light about the degree to which the market is affected by physical and socio-demographic characteristics, price and regulation. Keywords: Budapest, Housing, Pricing Mechanism, Neural Networks

13

C013

Reputation and professional deontology: The Ethic Code of Spanish Real Estate Professional Bodies

Paloma Taltavull

A.Raga R.Duenas

Department of Applied Economy Analysis University of Alicante

Alicante, Spain

This paper evaluates the role of ethics in two Spanish real estate professional bodies as a guide for practising real estate managers and brokers. There are two official professional bodies in Spain. Each enunciates ethical rules of conduct that enjoy official legal recognition. However, as a result of recent market changes and deregulation, both ethical codes are found to be wanting in their capacity to deliver appropriate ethical guidance for practitioners. This paper develops an alternative ethical code that is informed by the insights gained from a questionnaire that was specifically developed for this research undertaking. Keywords: Real Estate Ethics, Spanish Real Estate Professional Bodies

14

C014

The Gender Composition of Boards of Property Trust IPOs

Bill Dimovski R.Brooks

School of Accounting, Economics and Finance Deakin University Geelong, Australia

1

This paper follows Dimovski and Brooks (2004) which identified a relatively low proportion of female directors on the boards of Australian mining and industrial company initial public offerings (IPOs). This study investigates the gender composition of the boards of directors of Australian property trust IPOs from 1994 to 1999. We find that property trust IPOs in Australia generally do not require female directors for the capital raising. We also find that larger IPOs tend to engage more women directors but that retail property trust IPOs tend to engage fewer women directors.

15

C015

China's latest constitutional amendment on land acquisition compensation issues - Does it offer real help to farmers?

Nelson Chan

University of Western Sydney South Penrith DC, Australia

15

Since China adopted an open door policy in l978, there has been rapid development in the economy and great improvement to the livelihood of the people. The rapid development also expedites urbanisation in the country. These forces have created great demand for land to support various developments. Compulsory acquisition of farmland has become a convenient means to increase land supply. The compulsory acquisition of farmland is governed by the Peoples’ Republic of China Land Management Law 1998. It also provides for the payment of compensation to dispossessed farmers. Land acquisition in recent years has encountered increasing resistance from farmers because they think the compensation is unfair and inadequate. In some cases, the resistance turns into violence. In March 2004, the Chinese Constitution was amended to address, among other issues, land acquisition compensation payment problems. This paper gives an overview of the prevailing methods of compensation for compulsory acquisition of farmland in China. It also examines the adequacy of the latest constitutional amendments that are supposed to address the problems. Recommendations for improvement are provided at the conclusion.

16

C016

FM Education are we meeting industry needs

Clive Warren S.Heng

School of Geography, Planning & Architecture University of Queensland

St Lucia, Australia Facilities Management is widely recognised as a knowledge based industry in which professional practitioners use their management skills and real property knowledge to administer significant corporate real estate portfolios for their client organisations. The profession has grown in a relatively short period and draws practitioners from a wide range of other professions. This paper will examine the role that tertiary level education has to play in developing the FM profession; it will review the wide range of FM courses offered at graduate and undergraduate level in Europe and Asia. These courses show a wide content range from business based degrees to operational asset management and from fulltime study degree courses to distance learning graduate certificates. The paper will compare and contrast the courses on offer with current FM industry trends and recognised skill sets within the profession. In reviewing the courses available it will be possible map course skills objectives and knowledge base with current industry developments. This mapping of courses and skills will attempt to highlight developing needs of industry and to identify any deficiencies in our education of future FM professionals. Finally the paper will attempt to link education, industry trends and the professional accreditation programs offered by the leading global bodies including British Institute of Facilities Management (BIFM), RICS, Facilities Management Association of Australian (FMAA) and International Facilities Management Association (IFMA). The paper will conclude by providing a future framework which will assist universities and professional associations in meeting the current and future needs of the FM industry. Keywords: Facilities Management, Education, Skills, Professional Development.

17

C017

Real Estate Risk Exposure of Equity Real Estate Investment Trusts

Ming-Long Lee K.C.H.Chiang

National Yunlin University of Science and Technology Yunlin, Taiwan

17

Gloscock, Lu, and So, (2000) show that equity REITs behave more like stocks after 1992, although equity REITs are co integrated with the private real estate market during their whole study period. However Calyton and Mackinnon (2003) provide evidence demonstrating that equity REITs become more akin to real estate and less like stocks. Facing the seemingly contradicting evidence produced by the two studies, we are motivated to examine the real estate risk exposure of equity REITs. We ask whether equity REITs provide investors more real estate exposure after 1992. Particularly, is there a real estate risk factor in equity REIT pricing and has it started to play a larger role after the structural change in the REIT market? This study extends the work of Peterson and Hsieh (1997) who apply the three-factor (the three stock market factors: an overall market factor, a size factor, and a book-to-market factor) model of Fama and French (1993; hereafter FF) and show that the risk factors influencing traditional common stocks also influence equity REITs. The study also applies the approach of He (2003) who incorporates a real estate risk factor to the five-factor model (the three stock market factors plus the two bond market factors: the term structure factor and the default risk factor) of FF (1993). Finally, the study examines whether the real estate risk factor of equity REITs change significantly after 1992.

Keywords: REIT; Real Estate; Asset Pricing; Real Estate Factor; Equity REIT

18

C018

Corporate Real Estate Sales and Agency Costs of Managerial Discretion

Ming-Long Lee

National Yunlin University of Science and Technology Yunlin, Taiwan

1

Relative few studies extensively examine sales of corporate real estate. Examples are Glascock, Davidson and Sirmans (1991), Booth, Gloscock, and Sarkar (1996), and Liao and Chang (1996). However the studies have not yet examined the financing hypothesis of Lang, Poulsen, and Stulz (1995). This study contributes to the literature on corporate real estate dispositions by examining the financing hypothesis. Specifically we examine the link between stock-price reaction and the agency costs of managerial discretion in the corporate real estate disposition context. We exploit the concept that institutional investor involvement and debt obligations lead to effective monitoring of managers, compelling them to take value-maximizing decisions and thus reduce the degree of agency costs of managerial discretion. Stratifying observations into “high agency-cost firm-years” and “low agency-cost firm-years” with the monitoring devices, this study employs both univariate and multivariate analysis to examine the difference on the market responses to real estate dispositions between the high agency-cost group and the low agency-cost group. The evidence from both the univariate and multivariate analysis show that abnormal returns are higher for low agency-cost firm-years than for high agency-cost firm-years on dispositions of corporate real estate. This empirical result supports the financing hypothesis that implies a negative relation between the stock market response to asset sales and the degree of agency costs. Keywords: Asset sales, Agency cost, Real estate, Corporate finance, Taiwan

19

C019

Planning for Housing in the Post-Barker Era

Geoff Meen Department of Economics

University of Reading Reading, UK

19

In March 2004, the Final Report of the Barker Review of Housing Supply was published in England. House prices in the UK have risen much faster in real terms over the last thirty years than in the rest of Europe and this has generated considerable problems for macroeconomic management. The government has attributed this rise to housing supply shortages and the Review’s remit was to consider why housing supply is so low and unresponsive to market signals. The Final Report placed considerable emphasis on the failures of the land-use planning system. Most of the Review’s recommendations were quickly accepted by the government and the report promises to be one of the most important for housing policy for many years. In future, as a part of the planning process, indicators of market shortages will play a much more prominent role in land release decisions. Indeed much of housing policy, both nationally and regionally, will be driven by affordability indicators. Regions will be required to adopt explicit affordability targets. However, there are considerable conceptual difficulties in the adoption of such an approach and government officials are still consulting on the appropriate methodology. But, almost certainly, it will require greater input from economists and economic models than in the past. These models do not yet exist. This paper, however, attempts to develop an economic framework that can be used as part of the planning process at local authority level. The model has been estimated and initial simulations are presented. The model argues that since housing, labour market and mobility decisions are all so closely linked, any model that attempts to assess affordability needs to model all these aspects together. Mobility is a particular problem at fine spatial levels. One of the difficulties for government is to assess the implications of affordability targets for new housing supply. The paper discusses the issues that arise in carrying out such calculations from the model. Key words: Barker Review, planning, economic models.

20

C020

The significance of fractional interests in listed property trusts

Graeme Newell University of Western Sydney Penrith South, Australia 20

The cost of many major commercial property assets now often exceeds prudent investment bounds for many property investors. As such, fractional interests or co-ownership in commercial property have taken on increased importance as institutional investors seek to manage single-asset risk in their property portfolios. Similarly, listed property trusts (LPTs) now have over 1,300 commercial properties accounting for over $75 billion in assets and representing over 50% of institutional-grade investment property in Australia. LPTs also account for approximately 8% of institutional asset allocations. The purpose of this paper is to assess the level of fractional interests amongst the LPT property portfolios over 1992-2004, involving the assessment of the ownership arrangements for over 10,000 commercial properties over this 15-year period. Issues to be assessed include:

has the incidence of fractional interests increased in recent years what ownership structures are used for these fractional interests what property types are included as fractional interests,

to gain further insights into LPT property investment strategies. Keywords: Fractional interests, co-ownership, LPTs, ownership structure, property type.

21

C021

The changing risk profile of listed property trusts

Graeme Newell University of Western Sydney

Penrith South, Australia

Listed property trusts (LPTs) have been the most successful indirect property investment vehicle in Australia, accounting for over $57 billion in market capitalisation at June 2004, as well as including many of the premier property investments in Australian office, retail and industrial property in these LPT property portfolios. LPTs account for approximately 8% of institutional asset allocations and are the third largest stockmarket sector. However, the LPT sector has undergone considerable change in recent years, including:

increased levels of international property increased levels of debt incorporating property development activities via increased use of stapled

securities structure reduced number of LPTs via mergers and acquisitions.

The potential impact of these changes is to increase LPT risk levels and reduce the traditional defensive nature of LPTs in a portfolio. The purpose of this paper is to assess the changing risk profile of LPTs over the last ten years, specifically focusing on the impact of the above factors on the LPT risk profile, both at a LPT sector level and at an individual LPT level. The implications for the portfolio diversification benefits of LPTs will also be assessed.

Keywords: LPTs, risk, international property, stapled securities, debt, portfolio diversification benefits. 1

22

C022

Factors Influencing the performance of listed property trusts

Graeme Newell University of Western Sydney

Penrith South, Australia

Listed property trusts (LPTs) accounted for over $57 billion in market capitalisation at June 2004, representing 8% of the total Australian stockmarket capitalisation and being the third largest stockmarket sector. While LPTs are listed on the stockmarket, their underlying assets are direct property. Hence, the issue of how much of LPT performance is attributable to direct property performance and how much to stockmarket performance has been actively debated in recent years. The purpose of this paper is to use a variance decomposition approach to assess LPT performance over 1990-2004 and whether this LPT performance has reflected more of direct property performance in recent years.

Keywords: LPTs, multi-factor model, variance decomposition, sensitivity, direct property factor

23

C023

Myth, Embeddedness and Tradition: an Examination of Property Rights grounded on a Fijian Case Study

Spike Boydell

School of Social and Economic Development University of the South Pacific

Suva, Fiji

There is no property in nature – the concept of property and property rights is a human construct. In all societies the property rights of individuals are subject to political and legal regulation, whether this is by custom, modern legal instruments, or both. In the Pacific, there is often confusion and conflict between constitutional and customary law. Embeddedness, or preconception from prior upbringing, clouds and confuses attitudes to property and land ownership. The concept of communalism, which is accepted practice in many Pacific island countries, and the grounding of property in relationships provides a clearer explanation, albeit shrouded in myth and tradition. Fundamental to the enquiry is an examination of property rights, which remain shrouded in confusion, a confusion that can lead to all manner of land tenure conflicts. Yet as Smajgl et al. (2003) suggest, property rights are the principal instrument for achieving and reconciling multiple aspirations, reducing uncertainty for investors and maximising benefits to the community. This essay is grounded on the case study of Timoci and the property rights that he ‘holds’ from a customary and a western perspective, and the interplay with formal and informal institutional arrangements. Keywords: Land tenure, property rights, custom, communalism, institutions. 3

24

C024

Multi-criteria Modeling of Hotel Investment Decision-making: A Theoretical Introduction

Ross Seabrook

Central Coast School of Business University of Newcastle

Ourimbah, Australia 24

Hotel investment performance has been criticised for its high volatility and thus unpredictable returns. Inconsistent performance has resulted from a range of industry specific factors. At present, there is no universally adopted decision-making model that integrates relevant factors cohesively and logically to improve hotel investment decision-making. This paper examines multi-criteria modelling using Analytic Hierarchy Process (AHP) methodology to develop a suitable theoretical model for this purpose. Fifteen participants, including hotel investors, owners and operators, representing thirty-eight per cent of hotel ownership in the ten primary Australian hotel markets, participated in the process. Content analysis of the extant literature identified seven factors and sixty-three sub-factors that have potential impact on hotel investments. To develop a manageable cohort of factors, preliminary surveys were undertaken to gain consensus on the most important factors influencing hotel investment decision-making. The subsequent outcome was a cohort of five factors and twenty-five sub-factors. Pairwise assessments of factors and their sub-factors were undertaken and ranked using degree of importance of one factor over the other. The study identified the overall mean factor weights in order of importance are: Financial (36.9%), Location (29.9%), Economic (14.5%), Diversification (12%) and Relationships (6.6%). The results suggest three tiers of importance. The first tier includes financial and location factors which account for 66.80% of respondent weightings. The second tier includes economic and diversification factors accounting for 26.5% of respondent weightings and the final tier incorporating relationships. Not surprisingly, hotel investments are prioritised based on underlying financial performance, which are strongly influenced by local market conditions. Hotel investors place greater importance on location attributes they can specifically identify such as, hotel supply and demand and site attributes as opposed to macroeconomic impacts including business and tourist spending patterns and growth patterns in employment. Whilst 5-year return on investment dominates individual hotel analysis, investors are cognisant of the importance of geographic diversification to reduce their risk exposure and segment diversification to reduce property specific occupancy risk. The relationship factor was at the lowest tier of importance. Hotel investors did not find relationship management an important consideration except for the sub-factor - alignment with stakeholders (3.29%), which achieved a medium importance ranking. Keywords: Hotels, Investment, AHP, Decision-modelling

25

C026

The Valuation of Water Rights - A Comparison of Valuation Methodologies

Brian O'Callaghan

H.Bjornlund School of International Business

University of South Australia Adelaide, Australia

Efficient and effective use of water in society has been a subject of interest in most countries throughout the world where fresh water is a scarce resource. In recent times, the ownership of rights to use and transfer water allocations and entitlement rights has become a topic of great interest in Australia’s south eastern states, where reliance on the nation’s single largest natural waterway, the Murray-Darling river system, is paramount to the economies of New South Wales, Victoria, Queensland and South Australia. Much discussion has occurred between competing and complementary groups with an interest in the river system. Environmentalists, farming groups and government agencies have debated the issues surrounding the use of the river system, and where or why flows could or should be returned to the river to increase environmental flows. Each of the states has a vested interest in maintaining as great a share of the river resource as possible, while at the same time instituting mechanisms to deliver flows back to the river. As part of the drive to increase production efficiencies in the rural sector, water has been identified as a scarce resource. In an attempt to deliver this scarce resource to its most productive environment, water trading, the mechanism to allow temporary and permanent transfers of water entitlements from one property to another, or one individual to another, has gradually been introduced into the four states. Traditionally, the inherent value of water has been tied to land. Its value has been encapsulated in the overall value of the property. Financial institutions included its value in valuations of properties for mortgage purposes, and government rating agencies included water in overall land value when assessing value for rating and taxing purposes. Each state has, or is in the process of, separating ownership of water and land rights, and assigning ownership of water rights to individuals, rather than to land. As such, water rights have become personal chattels, and are no longer included in valuation assessments for rating or lending purposes. It therefore requires valuers to identify the true value of water, so that lenders can reduce risk and rating authorities can fairly and equitably implement the rate burden. This paper reviews historic and current methodologies used to identify water value, and suggests ways in which water value can be successfully separated from land. It then applies hedonic functions to transactions of irrigated land to identify the value of water when attached to irrigated farmland. It then makes some comparisons with prices paid in the market for permanent water during the same period.

26

C027

Integrating Artificial Neural Networks and GIS for Single-property Valuation

Abdul Ghani Sarip

Department of Estate Management University of Malaya

Kuala Lumpur, Malaysia 27

The sales comparison approach to valuing a single property combines expert quantitative analysis with qualitative evaluation of the subject property along with comparables. Predicted values are then evaluated before a final valuation is rendered. The traditional hedonic approach involving the application of multiple regression, is problematic and faces some data management problems. An Automated Valuation Model (AVM) named “Geo-Information Neural System” (GINS) is developed as an alternative for use in the valuation of single-residential property. This system integrates a Geographic Information System (GIS) technique with Artificial Neural Networks (ANN) modelling. It involves the establishment of a GIS database management system for all detached property in Damansara Heights, Kuala Lumpur. GIS is utilized for location distance measurements, spatial queries and thematic mapping whilst ANN is employed to replicate the way the human brain might process data by learning relationships, in this case the one existing between property characteristics such as physical and location attributes and sales price. A sample of 100 sales of detached houses is taken. The trained neural network model is then used to predict the probable value of a residential property. The model is built on a GIS platform, which will allow for GINS automation as well as the conduct of interactive valuations. A graphical user interface is developed for seamless integration and user interaction. The results indicate that GINS provides an efficient AVM tool that provides superior residential property valuations, while accuracy is improved by minimizing the influence of subjective judgments. The technique may be used to check valuations generated by more traditional methods as well as further improve the overall quality of single-property valuations. Keywords: single-property valuation; automated valuation model; geographic information system; artificial neural networks

27

C028

The Distributional Characteristics of REIT Returns and Risk Measurement Implications

Simon Stevenson

E.Hutson University College Dublin and Cass Business School

City University Blackrock, Ireland

28

This paper examines the distributional characteristics of REITs using the daily NAREIT indices for the period 1999-2004. While previous studies have examined the distributional properties of REITs, they have largely used lower frequency monthly data. This paper has two primary aims. Firstly, it extends the existing literature on REITs by utilising the approaches proposed by Peiro (1999, 2002) and illustrating that the conventional skewness statistic, which is normally used to test for normality in return distributions, may provide erroneous inferences regarding the distribution as it is based on the normal distribution. We test for non-normality using a variety of alternative tests that make minimal assumptions about the shape of the underlying distribution. Secondly, building on the reported findings we analyse the implications for risk measurement. We estimate value-at-risk measures on a daily basis for REITs. While VaR has over the last ten years become a main standard risk measure it does suffer from a number of problems, especially concerning the assumptions made regarding normality in the basic estimation of the measure (Hull & White, 1998). We therefore use of Extreme Value Theory in examining the tail behaviour of REITs and integrate this with the estimation of daily value-at-risk figures.

28

C029

Estimation of Listed Property Trust Beta's

Simon Stevenson R.Kishore

University College Dublin and Cass Business School City University

Blackrock, Ireland 29 This paper examines the estimation of Listed Property Trust betas and examines a number of key issues using both monthly and daily data. The first issue concerns the asymmetry of betas. A number of studies regarding REITs have observed an asymmetrical pattern in betas, with instability noted between up and down markets. Studies such as Goldstein & Nelling (1999), Sagalyn (1990), Chatrath et al. (2000) and Chiang et al. (2004) all note this asymmetrical relationship in REITs with regard to both economic conditions and the performance of the overall equity markets. The current paper aims to examine this issue in the context of Listed Property Trusts and to see if similar instability in beta estimates is observed in an Australian context. The second major issue to be examined concerns the estimation of betas using high frequency daily data. Due to factors such as non-synchronous and thin trading biases can be induced into the estimation of daily betas. Previous studies of such bias have generally examined stock returns, with no known study to have analysed the issue in the context of real estate securities. Non-synchronous and thin trading cannot only affect the betas directly through the return series of the security, but can also induce bias into the index due to the impact of non-synchronous trading. The use of LPT data provides an interesting sample, given the differentials observable in the level and frequency in trading in the sector. This potentially provides for bias being introduced due to both thin and non-synchronous trading. In addition to the initial testing for bias, we then utilise a variety of alternative correction methods. In addition to the standard approach used in studies such as Scholes & Williams (1977) and Dimson (1979) we also adopt the Bayesian correction used in papers such as Murray (1995).

29

C030

Assessing the Time-Varying Interest Rate Sensitivity of Real Estate Securities

Simon Stevenson

R.Zurbruegg University College Dublin and Cass Business School

City University Blackrock, Ireland

This study aims to examine the relationship between interest rate movements and the price reaction of UK property stocks. While previous exists concerning the sensitivity of indirect real estate vehicles to interest rates, this study extends this literature by examining the time-varying sensitivity of property companies. Unlike REITs, which are limited in the level of leverage they can utilize, property companies are generally highly geared stocks, making the impact of interest rates highly important to the firms. Not only should interest rate movements have an impact due to their impact on the real economy and the direct real estate markets, but there will also be a direct impact upon the stocks due to their highly geared nature. A large number of studies have examined interest rate sensitivity in a real estate context, with a large number having examined REITs (e.g. Chen et al., 1997, Chen & Tzang, 1988, Liang & Webb, 1995, Ling & Naranjo, 1997, McCue & Kling, 1994, Mueller & Pauley, 1995, Swanson et al, 2002). This study extends this literature and particularly those recent studies to have examined time-varying aspects of real estate securities (Devaney, 2001). The paper also utilizes the broader literature that has analyzed the interest rate sensitivity of stocks generally. In particular, there is a large collection of papers to have examined the issue in specific relation to bank stocks (Choi et al, 1992, Elyasiani & Mansur, 1998 and Flannery et al., 1997). The data used in this study comprises of daily data over the period 1975 through 2003. The FTSE Property sector index is used to represent UK property stocks. The overnight Sterling LIBOR is used as a proxy for market rates. The paper examines the time-varying sensitivity of property stocks using a GARCH based framework. For comparative purposes, and in particular to allow comparisons with the studies of bank stock reaction, we also examine the reaction of property company stock prices to discount rate announcements. Bank of England base rate changes are used in this context to examine the immediate reaction to central bank rates.

30

C031

The Performance Indicator of the Industrial Property Market Based on Location Factors

Jinu Kim

Faculty of the Built Environment University of New South Wales

Sydney, Australia The theoretical model employed in this study predicts that the values of typical industrial sites are a function of economic and locational factors. Industrial land values were obtained for typical industrial sites in the Sydney region between 1976 and 2003 from the New South Wales Valuer General’s Office (VGO). In order to control for economic factors, regression analysis applied to cross-sectional data was used to estimate a separate relationship between industrial land value (the dependent variable) and distance from the CBD (the independent variable) for each year of the analysis period (snap-shot analysis). The study found that in a rising (falling) market, central industrial land value (CILV) – the intercept - tends to be higher (lower) and the slope coefficient – industrial land value reduction per kilometre - tends to be steeper (shallower). Finally, after a comparison with other performance indicators, it is concluded that the movement of CILV based on location factors may predict the turning points of the performance of Sydney industrial land values. Keywords: Industrial property market, land values, location factors, performance indicator

31

C033

A Christian Understanding of Property: Spiritual themes underlying Western property

Garrick Small

Faculty of Design, Architecture and Building University of Technology, Sydney

Broadway, Australia Interest in customary title has raised awareness of the cultural dependence of property and its relationship to spirituality. Western culture has a historical connection with Christian spirituality, yet its property institution is seldom related to it. Property is found within Christian thought from the very beginning of the Old Testament and shares several important commonalities with customary peoples. The notion of property is evident in the gospels along with repeated comments on the correct application of riches. Early Christianity can be viewed as a development of the Old Testament property institution consistent with other aspects of Christian moral thought. Changes in the institution of property through the Christian era can be seen to parallel changes in Christian thought eventually leading to present day property. Overall, property can be linked to the spiritual roots of Western culture in a manner that has the capacity to inform the development of dialogue with customary peoples in their endeavours to assert the validity of their property conventions. It may also shed some light on perennial questions in property valuation. Keywords: property theory, customary title, moral theology, social economics, property and culture

32

C034

Economic Performance Analysis of the Australian Property Sector Using Input-output Tables

Chunlu Liu Yu Song

Deakin University Geelong, Australia

The property sector has played an important role with its growing contribution in the national income and employment in Australian economy. The socially optimal resource allocation and technical efficiencies have gained significant research interest at an industry level because higher efficiency means higher competitive ability. There is an increasing research need in measuring and analysing the allocation and technical efficiencies at a country level and the input-output tables are considered as an appropriate tool. This paper aims to analyse and measure the allocation and technical efficiencies of the Australian property sector using five latest input-output tables compiled by the Australian Bureau of Statistics. The direct and total backward and forward indicators are investigated respectively. Accordingly, the direct and total input and output of the property agent sector are discussed. Moreover, the Spearman Rank Correlations are tested to decide if there are any notable changes in rankings of the efficiencies of the property agent sector between the property sector and others over the study period. Results describe the structural characteristics and development trend of the property sector in Australia. Findings can aid policy makers, property agencies and researchers in evaluating the competitive ability of property agents in Australia. They can also be used to carry out comparisons with other countries. Keywords: Input-output table, allocation efficiency, technical efficiency, Australia, property sector

33

C035

Risk free profit from property - the government, the risk free partner

Angelo Karantonis

Faculty of Design, Architecture and Building University of Technology, Sydney

Broadway, Australia 3 Property is an asset that can be taxed in several ways, because it is both a capital good and consumption good. Accordingly, governments at all levels have endeavoured to impose taxes and/or fees and charges on property. The recently introduced “exit” tax for property investors in NSW has once again highlighted the vulnerability that property as an asset suffers at the hands of government. In the NSW budget papers for the 2004-2005 financial year total property taxation accounted for 36.7% or $5,700 million of total State Government revenue. This includes Stamp Duty ($3,190 million), Vendor Transfer Duty ($690million), Mortgage Duty ($372 million) and Land Tax ($1,448 million). In addition to state taxes, property is also taxed in several ways at the local and federal government levels. That is, the three tiers of government profit from property investors, irrespective of whether individual investors and developers make a profit or not. This paper will examine the impact of the combined current taxation and fees of the three tiers of government associated with property investment in NSW. In addition, using case studies, the paper will derive the percentage level of the overall “risk free” profit by government instrumentalities from private property developments in NSW. Keywords: property development, property taxation, taxation, profit.

34

C038

A Term Structure of Commercial Lease Real Estate Returns

Frederik Pretorius MKS. Tse KW. Chau

Department of Real Estate and Construction University of Hong Kong

Hong Kong Over the last decade, there has been considerable interest in the fundamental economics and finance of commercial real estate leases, following theoretical work on the economics of a term structure of lease rates and returns, the game-theoretical context within which lease rates are determined, and the economic nature of lease transactions as financial contracts. There has also been practical interest in the characteristics of leases as financial contracts from the viewpoint of asset-liability management. Unlike the term structure of interest rates, there is little empirical evidence of lease return term structure phenomena, primarily because extremely complex data requirements have conspired against the construction of an actual term structure of lease returns at any time. This has thus also limited the conduct of empirical tests of advances in commercial real estate lease research with actual lease returns term structure data. This paper reports on research towards abstracting an ex-post term structure of commercial lease returns from analysis of a sample of some four hundred office lease transactions over a five year timeframe. Following a detailed and time-intensive analysis of lease contracts, transaction-based office capital and rental indices and associated aggregate financial markets data, we construct an ex-post term structure of lease rates in a series of cross-sectional analyses using regression methodology. We find qualified support for a generally negative underlying term structure of lease returns following an agency cost hypothesis. In all, this paper demonstrates the unfortunate complexity and labour-intensity of research into phenomena underlying the credit contract nature of leases, and highlights problems with establishing a capital markets role for commercial real estate lease contracts comparable to that of debt contracts. Keywords: leases, commercial real estate, term structure, agency cost hypothesis

35

C039

Using a Hybrid Automated Valuation Model to Estimate Capital and Site Values

Peter Rossini

P.Kershaw Property Group - Division of Business

University of South Australia Adelaide, Australia

39

In recent years the use of Hybrid Automated Valuation Models has been widely discussed in the property taxation literature. Such models are now recognised in the IAAO's standard for AVM's. These models may produce superior results to simpler AVM's and may be particularly useful in a situation where improved properties need to be used to estimate site value. Given recent court decisions in Australia that seem to require valuers to consider sales with improvements when assessing site value in "thin markets", such models may prove to be a useful tool in mass appraisal. This paper examines the use of a hybrid model to estimate capital and site values for residential properties in a small pilot study in Adelaide, South Australia. The model uses both vacant land and improved residential sales in a single model to estimate both site and capital values. This initial research shows that such models may prove to be a useful addition to the methodologies used by property tax authorities in Australia. Keywords: Automated Valuation Models, Property Taxation, Mass Appraisal, Residential Valuation, Hybrid Models

36

C041

Tracing evidence of rational investment behavior in water markets

Henning Bjornlund P.Rossini

School of International Business University of South Australia

Adelaide, Australia At last years PRRES conference in Bangkok we reported on factors impacting on farmers’ willingness to pay for water in markets for temporary water. In this paper we concentrate on prices paid in the market for permanent water and also examine the relationship between prices paid in the two markets. These markets are analogous to the sale and rental markets for investment properties and simple yield analysis typically used for investment properties is also applied to these water markets. In a parallel paper, O’Callaghan and Bjornlund will report on the value of water when attached to irrigated farmland and compare these values with the prices paid in the permanent water market. These two papers provide a comprehensive analysis of water prices and values in the Australian market for water. This insight is important to the rural sector of the property profession and might in the not too distant future have great importance for the urban sector as well. Under recent legislation the interests in water and land have been separated. Owners of these interests will now hold separate titles to the two different interests, and the interests will be registered in two different registers where third party interests can be recorded independently. These developments have significant implications for the property profession when valuing properties for lending, rating and taxing purposes. At present the valuation profession is trying to come to terms with how to separate the value of the water from the value of the land. As a result it is important to establish the value of water in the different markets and to determine what influences such values. In an urban context it has to be recognized that as all water users now have been issued limited water entitlements, no water user, including urban water authorities, can exceed their entitlement. Urban growth above existing water entitlements will therefore result in a need for urban water authorities to acquire additional water entitlements to meet increased demand. Such increases can only take place via water markets either for permanent or temporary water. An understanding of what drives activities in these two markets is therefore essential for these authorities to find out how they can acquire a portfolio of water entitlements, which will provide certainty of supply at lowest possible cost. At least one water authority in Australia now requires that developers of new urban subdivisions must provide the local water authority with the necessary water entitlements to supply the new development before planning approval is granted. Similar examples can be identified in the United States. Keywords: Water markets, water values, water trading, water prices

37

C042

Focus, Liquidity and Firm Value - An Empirical Study of Listed Property Trusts in Australia

Johan Hedander

Building and Real Estate Economics Royal Institute of Technology

Stockholm, Sweden This paper investigates the relationship between corporate focus and firm value. The financial literature often states that diversification destroys value, i.e. diversification across multiple lines of business is associated with lower firm values, ceteris paribus. The same type of evidence is provided for firms within a single line of business, e.g. securitised property. Studies on US REITs and Swedish real estate companies detect a positive relationship between focus over property types and firm value. However, for the US study, this link disappears after controlling for share market liquidity. This study examines the relationship between focus and value for an unbalanced panel dataset covering 39 non-stapled Australian Listed Property Trusts (LPTs) during 1992-2003. I construct Herfindahl indices to measure the LPT’s degree of focus. The indices are calculated by summing the squared proportions of the trust’s investments in specific sub-sectors for both property types and regions. The indices are then linked to LPT value, expressed as the ratio of market capitalisation to NTA (market-to-NTA). I find a significantly positive relationship between Herfindahl property type and market-to-NTA, in detail saying that an increase in the index by 0.1 is associated with a 1.4% value enhancement. However, after splitting the time period into two parts, (a) 1992-1997 and (b) 1998-2003, this link is only observed for the first sub-period. This discovery can be interpreted as an increased awareness from the trusts about the market’s negative attitude to diversification, observed by higher degrees of property type focus during the latter period. Herfindahl region is strongly negative related to LPT value for both periods, suggesting that diversification over regions can increase value. I also test whether focus affects LPT value indirectly through share market liquidity. I find no proof of such a relationship and it is thus still unclear through which channel focus is linked to LPT value. Keywords: LPTs, focus, liquidity, firm value.

38

C043

Boom or gloom: A comparative study of the propensity of first home buyers in Beijing and Shanghai

Peter Li

A.Karantonis Faculty of Design, Architecture and Building

University of Technology, Sydney Broadway, Australia

This paper seeks to contribute to a better understanding of the propensity of first home buyers in Beijing and Shanghai in urban China. Under planned economy since 1949, housing was provided by the State through the danwei or ‘work unit’ organizations at monthly rental of about 1-3 % of the household income. However, little revenue could be generated from such low rental, resulting in poorly maintained buildings and insufficient housing investment by the government. To tackle the severe housing shortage problem, urban housing reform was introduced in 1988. The objectives of the housing reform were privatization and commercialization of housing. The focus was on affordable housing, like the Anju (comfortable) housing project for ordinary households. By way of background, this paper will present an overview of the property markets in urban Beijing and urban Shanghai since 1988. Although a lot has been researched in the housing reforms, housing preferences and housing inequalities, there has been very little research into the home owning propensities of first home buyers (FHB) in China. Based on data collected in Beijing and Shanghai in Autumn 2004, this paper will aim to test the hypothesis that the higher the total incomes of FHB, the higher the level of buying an apartment or house. Qualitative methods were used, with over 50 in-depth interviews conducted in each of the two cities studied. For deeper understanding of their home-ownership propensities, descriptive data of the interviewees were analysed under five categories, namely: the socio-demographic characteristics; income levels; housing choice; mode of finance; and impact of government policies to assist FHB. The data were then transcribed, summarized and processed using a spreadsheet. The interview results appear to support the hypothesis that fulfilling the homeownership dreams for first home buyers is the result of affordability.

39

C044

Residential Apartment Development in Auckland's Central Business District

Laurence Murphy

Department of Property University of Auckland Auckland, New Zealand

44 Since 1990 Auckland’s central business district (CBD) has experienced an unprecedented boom in the production of residential apartments. This boom reflects the emergence of significant owner-occupier and investor demand. While the increasing significance of the CBD as a residential location stands in marked contrast to the city’s history of suburbanisation, the Auckland experience conforms to a global trend toward urban revitalisation. As part of an on-going research project, this paper examines key dimensions of the boom and emerging market differentiation. In particular, two sub-markets, servicing the needs of middle-income owners and low-income renters, are identified and discussed. It is argued that the current boom has focused on meeting the accommodation needs of international students and that there is a distinct risk of oversupply in the near future.

40

C045

Sea Change Fact or Fiction?

Kathryn Robson School of Property, Construction and Project Management

RMIT University Melbourne, Australia

45 Did the TV show “Seachange” really change people’s life styles, or was it written in answer to an already existing trend? Demographic changes are happening in Victoria. This paper examines those changes by focusing on the stretch of coastal Victoria where “Seachange” was filmed, the Bellarine Peninsula and in particular, Queenscliff, Point Lonsdale, Ocean Grove and Barwon Heads. There is no question that these coastal regions have seen expanding growth in the housing market since 2000. New housing, high market turnover and rising prices can be attributed to a number of reasons, including increased demand for holiday houses, natural growth (in line with Melbourne), or a real change in demographics due to the phenomena known as a “Seachange”. The implications of increased population in coastal areas places increased pressure on already limited resources, both natural and created. If, these demographics changes are predominantly the over 50s (baby boomers) group, the implications are concerning. This paper examines the available data and seeks to identify the underlying forces driving growth along coastal Victoria. What are the implications of these emerging demographic trends for the property market and communities? How are the authorities meeting the challenge that these changes place on the required services, such as age care, childcare, education, health care, recreation etc? Now is the time to examine the population structures and now is the time to plan for increased demand in all the related service areas and related infrastructure. But what is being done? Keywords: demographics, patterns of growth, housing, services, infrastructure, planning, “baby boomers’, life style.

41

C048

Modeling the Australian Investment Property Universe

David Higgins Faculty of Design, Architecture and Building

University of Technology, Sydney Haymarket, Australia

Commercial property is an important investment asset class. There is extensive investment and portfolio literature on the role of real estate in the capital markets, however, an aspect of concern is the quality of property data information. This renders real estate the poor relation of other investment markets and contributes to a lack of confidence and an increase risk premium by asset allocators (Society of Property Researchers 1995). Property data weakness can be illustrated by not knowing the property market depth which is available in alternative asset classes (eg equity markets). This is a key requirement in portfolio asset allocation alongside return, risk and liquidity. On a global perspective, to overcome this lack of property information leading property researchers (for example: Henderson Global Investors 2001, Whitaker, 2001, DB Real Estate 2002, Liang and Gordon 2003, McIntosh 2004) have adopted an economic activity (gross domestic product) based approach to estimate the value of a country’s commercial real estate market. This top down method can be compared to a bottom-up approach. Preliminary work on the bottom-up approach has identified leading Australian property data providers and a pilot study has successfully determined the size and characteristics of a specific property market: Parramatta Local Government Area. The aim of this paper is to examine and evaluate the different approaches to measuring the investment grade commercial property universe. The assumptions behind the models are reviewed and the impact on the outcomes compared. The results will be analysis with suggestions on ways to improve the property universe methodology. Knowledge of the Australian investment property universe can provide a significant platform for future commercial property analysis and will ultimately advance the quality of commercial property investment and development decisions for all property investors. Keywords: property universe, statistical analysis, commercial property

42

C049

Efficient Frontiers and Performance Measurement for LPTs

John Flaherty V.Fang

R.Lombardo Department of Accounting & Finance

Monash University Clayton, Australia

49 Listed Property Trusts (LPTs) are an important asset class for creating wealth. The dynamics of the current Australian environment presents investors with greater investment challenges in deciding which securities should be included in an investor's portfolio. The standard Markowitz framework is employed to consider alternative portfolios. Performance measurement and attribution analysis is used as a basis for evaluating these portfolios. Keywords: Efficient frontier, Property portfolio, Performance measurement

43

C050

Marketing Environment, Marketing Strategy and Marketing Performance: An Empirical Analysis of Taiwan Residential Property

Market

Chih-Wen Wu Feng Chia University

Taichung, Taiwan

This paper analyses marketing concepts as they apply to real estate construction, brokerage and advertising firms in the Taiwan residential property market. By adapting the industrial organisation, resource based view and PIMS theories, the study proposes the organisation-environment-strategy-performance (OESP) framework and develops a model of property marketing for examining the Taiwan property market. The paper proposed and tested hypothesized relationships among four external marketing environment dimensions, four internal marketing environment dimensions, seven marketing strategy dimensions and four performance variables. By focusing on both the structure and tests of hypothesized relationships, the study aims to strengthen the empirical foundation of marketing strategy research. The reported research findings are based on a mail survey of 102 property marketing business managers. Separate models as well as an integrated one were developed, and the relationships presented in the research questions were tested using a two-year panel survey and a retrospective longitudinal study (2000-2001) of 102 firms in the Taiwan real estate industry. Pooled cross-sectional time series regression and multiple regression methods were employed to test the research hypotheses and exploratory propositions. This study enables a stronger test of the durability of the relationships posed in previous research by identifying whether the relationships obtained in that research hold over time. The research results find that internal environment variables (market orientation, product advantage and resource commitment) were not statistically significant in their capacity to explain variation in marketing performance. Of the external environment variables, demand potential and technological change were found to be key explanatory variables influencing marketing performance. Marketing strategy variables (product positioning and sales force expenditures) were found to be statistically significant in explaining marketing performance in the Taiwan residential property context. Product-market scope strategy is affected by product advantage and resource commitment whilst promotion element decision is affected by technical change and resource commitment. The distribution decision is determined by competitive intensity, customer orientation and prior marketing performance. Product positioning is affected by product advantage while strategic alliance is determined by market attractiveness and technical change pressure. No marketing environment and prior performance factors were found to affect sales force expenditures and pricing decisions. The substitute of competitors factor is found to be a statistically significant explanatory power of variance in market orientation and resource commitment. The dynamic marketing strategy model developed in this study may be followed up by other researchers, either directly in testing hypothesized relationships or as a basis for developing refined and extended marketing strategy research in the real estate context. Keywords: Property Market, Marketing Strategy, Marketing Environment, Marketing Performance, Pooled Regression

44

C051

Urging Reforms: Housing Subsidies in Hungary

Anikó Dobricza Szechenyi Istvan University

Gyor, Hungary This paper describes the diverse Hungarian housing market from an economic and financial perspective. The problems are partly inherited from the past regime, but are also aggravated by some efforts to resolve them. The home-finance subsidy system introduced in 2001 and since modified 12 times has failed to achieve its main objective: to help young families achieve home ownership. The main winners of the subsidies are those, who invested the government grant in the real estate market, but not for their first, but second, third, etc, home. Other winners of the system are the high-income families and families with children moving to newly built houses. The introduced reforms caused a severe bubble in real estate prices, which in turn created a heavy burden on the state budget. Another problem is that the subsidy system is subject to constant change and uncertainty. There are also many observable signs that are reminiscent of the Asian financial crisis of 10 years ago. This paper examines whether and how it is possible to resolve the emerging difficulties so as to avert a crisis.

45

C053

Career mentoring preferences of undergraduate property and construction students

Liz Everist V. Francis

L. Armitage Architecture, Building and Planning

University of Melbourne Melbourne, Australia

53 Although career mentoring is well established across many professional areas its application in the field of property and construction is at an emergent stage. More specifically in the higher education field in Australia there appears to be a dearth of empirical study. As part of ongoing quality review aimed at enhancing student engagement with their educational program, a questionnaire survey was undertaken among 1st and 2nd year students enrolled in the Faculty of Architecture, Building and Planning’s Bachelor of Planning and Design (Property and Construction). The study investigated student preferences regarding involvement in a career-mentoring program and student expectations of the mentoring relationship. As hypothesised, several interesting differences emerged between the property and construction cohorts. The findings demonstrate the importance of examining mentoring preferences from the perspective of the mentee. The paper concludes with a discussion of the implications of these results providing insights for others involved with tertiary program in the built environment. Keywords: Mentoring, career, tertiary education, property and construction.

46

C054

The Valuation Profession in Australia: Profile, Analysis and Future Directions

Peter Elliot C.Warren

School of Geography, Planning & Architecture University of Queensland

Brisbane, Australia 54

The 2003 World Valuation Congress set down a theme of ‘is there a future for the valuation profession?’ Like many professions and industries in the current dynamic global business environment, a need to establish where the valuation profession is going (and by definition where it is now) has been considered necessary for strategic planning purposes at both the profession and institutional/firm level. In this respect a number of issues have been identified relating to the future of the industry and how it can best succeed. This paper analyses the issues facing the profession in Australia and uses the conceptual framework set down by Michael Porter’s model of “How Competitive Forces Shape Strategy.” to better understand these issues and the direction the industry might take to succeed in an uncertain world. It is suggested that such an analysis could assist the strategic planning of industry groups such as API, RICS as well providing a basis for the Universities to consider the needs of the profession in the future.

47

C059

Some attributes of a second tier property market in transitional China

Sun Sheng Han

Department of Real Estate National University of Singapore

Singapore, Singapore Transitional property markets operate in an institutional environment which is characterized by rapid evolution of the goals, rules and regulations, and a physical environment which is characterized by drastic expansion of urban built-up areas through farm-land conversion, addition of infrastructures and building stocks. Market mechanisms which shape the supply, demand and the level of property prices are often aided and modified by other considerations in producing an outcome of property investment, finance and consumption. By using a second tier market as an example, this paper examines some of the attributes of supply, demand and price determination in land and housing market in a small county town in Shandong Province, China. Data are collected from field reconnaissance, interviews of key informants, and remote sensing images. Findings of the paper help to gain an in-depth understanding of the property market in China, in terms of not only the market operations, but also the sustainability of urban development. Keywords: International property market; transitional economies; urban development; China 9

48

C060

Identifying linkages between generations and community development

Richard Reed N.Conisbee

Faculty of Architecture, Building and Planning The University of Melbourne

Melbourne, Australia

In the analysis of property markets, especially the retail and residential sectors, increasing importance is being given to the role of demography. Often the emphasis is placed on economic influences such as interest rate movements, inflation and changes in the labour market. Whilst these variables are clearly important they do not incorporate the changing characteristics of the local inhabitants who actually provide the demand. On the other hand, demography can provide an invaluable insight into retail and residential property trends, especially over the long term, being assisted by reliable population datasets with a relatively high level of detail. For example, the emergence of the 'baby boom' generation shift had a substantial effect on demand for retail and housing products, although little consideration has been given to the effect from the latest cohort, namely generation Y. This paper examines the role of demography when researching property markets, with the focus placed on demographic shifts such as generation Y. It discusses trends in a range of demographic variables that have been observed in society. In addition, it highlights linkages with property markets, especially residential and retail property, and draws inferences for long-term trends. This study concludes that when conducting research into property markets, it is essential to have a thorough understanding of various demographic variables and predict how they affect demand. An appreciation of the drivers behind generation Y will assist property researchers to identify future needs, and the subsequent effect this will have on community development involving retail and residential property.

Keywords: Demography, generation Y, gentrification, retail property, residential housing.

49

C061

The Melbourne 2006 Commonwealth Games - What does it mean for the local property market?

Richard Reed

H.Wu Faculty of Architecture, Building and Planning

The University of Melbourne Melbourne, Australia

Next year Melbourne will host the 2006 Commonwealth Games, with Brisbane being the last Australian City to host this event in 1982 over two decades ago. Melbourne has not held a major global sporting event since the 1956 Olympic Games, although the 2006 Commonwealth Games follows on from the successful 2000 Sydney Olympics. These sporting events have continued to grow from strength to strength, and have been assisted by Australia's close affiliation with sport and the widespread global media coverage. In a similar manner to other sporting events that Melbourne hosts, including the Australian Tennis Open, Formula One Grand Prix, Motorcycle Grand Prix, Melbourne Cup and Australian Football League, the city and its inhabitants are consumed by these events. The 2006 Commonwealth Games is certain to follow this trend. The task of hosting the Commonwealth Games is enormous, although actively pursued in a fierce bidding process by competing cities. The benefits are undisputed and include an influx of visitors to the host city, an opportunity to enhance or rebuild infrastructure such as transport, plus the worldwide focus on the host city before and during the event. A high level of planning is undertaken for years well in advance of the event, and this may have an effect on the surrounding property market. Through the media both buyers and sellers are constantly reminded of the upcoming Games, the venues and the increased demand that will occur. Accordingly, this research investigates the task of hosting a major global sporting event such as the Commonwealth Games, and importantly how affects property markets in the Host City. Attention is placed on the 2006 Commonwealth Games and the Melbourne property market. Whilst every host city differs in characteristics such as size, location and timing of the event, the findings of this study will assist a future host city to plan for the highly irregular circumstances that accompany a high profile one-off major sporting event. Keywords: Commonwealth games, housing markets, host city. 61

50

C062

The impact of retiree migration on the Spanish Housing market - A case study

Paloma Taltavull

Department of Applied Economy Analysis University of Alicante

Alicante, Spain The paper evaluates the role of retiree migration on housing markets in Orihuela, Alicante, Spain. It checks the flow of migration demanding housing and evaluates the effects on housing construction and prices coming from this collective as well as the ‘housing needs’ to be covered by the Housing Policy. We use multivariate techniques to estimate a model including demographic pattern which differentiates between retirees and others migrations. Results suggest that retirees migration is encouraging other type of migration to locate in Orihuela. Keywords: Housing demand, migration of retirees, housing prices 2

51

C064

Floor measurement strategies in Germany - an empirical study

Stephan Kippes Nurtingen University

Germany In Germany like in other countries floor measurement is a huge problem. While buyers tend to use floor measures as an important parameter for their decision, and have to pay three or four thousand € per square meter – sometimes even more - in most areas there are no binding rules how floors are measured properly. And so it is quite hard to compare the different properties. When selling a property builders and real estate agents tend to maximize the number of square meters. And so the buyer read newspapers ads “House with 230m² - a lot of space for your family” - but properly measured there are only 170m² or even less. This tends to increase the distrust of property people. In Germany the methods of floor measurement are quite different: There is the DIN 283 which is used despite the fact that it was officially abandoned more than 20 years ago. Then there is DIN 277 which is not very suitable for housing. Another method is based on the so called “II. Berechenungsverordnung”, second measurement decree, which is only obligatory for public subsidized housing. Since 2004 the second measurement decree has been replaced by the floor Measurement Act – like its predecessor it officially applies only for public subsidized housing. That means there are no binding rooms how floors are measured except for public subsidized houses. Therefore people tend to use one of the above described measuring methods - or even a combination of two of them. Even worse they use their own, completely different systems which the customer doesn’t understand. Therefore at the moment there is an empirical study under way to analyze based on brochures of builders and property agents according to which system floors are measured. At the moment I am also looking for a co-operation with other Universities abroad that might be interested in a comparative study.

52

C065

Risk-return profiles in the UK regeneration market

Stanley McGreal A. Adair J. Berry J. Webb

Centre for Research on Property & Planning, School of the Built Environment University of Ulster

Newtownabbey, Northern Ireland 65

This paper is concerned with investment returns and risk within urban renewal areas in major UK metropolitan areas. The analysis presented is by property type. The results indicate high returns for retail real estate with compelling risk return ratios. For retail property in particular, but also to a lesser extent for office and industrial, this research indicates that investment performance in regeneration areas has outperformed national and local city benchmarks. This study is significant for two reasons. First the research addresses the issue of transparency of investment returns for a sector of the market which institutions have largely by-passed, due to data deficiencies and uncertainties regarding the risk-return profile. Second the research makes a significant contribution to the policy perspective in terms of those initiatives, which are capable of stimulating large private sector capital flows into regeneration areas. Returns for regeneration property are analysed at aggregated (total returns) and disaggregated levels (income returns and appreciation returns separately) over a 22- year time period. Separation of the returns highlights the highly risky nature of capital returns and the low risk bond-like income return.

53

C066

Review of Property Taxation Authorities in Australasia

Wayne Marano P.Rossini

N Bray University of South Australia

Adelaide, Australia

This paper reviews the current position of property taxation authorities in Australia in terms of the organisational structure, basis of assessment, valuation methodologies, data collection and storage, audit and objection process. These are summarised for Australasia and compared to other jurisdictions around the world. The paper concludes that the larger State jurisdictions in the Australasian region follow typical world practice in some regards but are generally lagging behind some countries, particularly in the application of many the localities in USA and Canada, in terms of the application of modern mass appraisal methodologies and that this is largely related to the purpose and basis of assessment. Keywords: Property Taxation, Mass Appraisal, Valuation, Statutory Valuation.

54

C067

Optimization of Performance in Facilities Management

Arnold Kwok C.Warren

School of Geography, Planning & Architecture University of Queensland

St Lucia, Australia 6

Facilities management and corporate real estate provision are increasingly important and dynamic. On the one hand, they are influenced by the changing orientations of the built environment which encompasses commercial, educational, industrial, recreational, residential, retail and transport infrastructures. On the other hand, business success criteria relating to consistency, continuous improvement and reliability (by quality, time and cost) will also exert an influence. Thus, the study of facilities management is essential for optimising the performance of business customers with complex facility requirements. This paper considers the complex facility requirements of meeting daily business operations and considers suitable built environments that meet these needs. It also identifies the key stakeholders of effective business performance within such built environments. In addition to the common benchmarking techniques or best practice in facilities management, this paper also introduces a best match approach for management teams to benchmark ideas and perceptions with customers. Finally, it describes the respective pros and cons of the best practice and the best match approaches in business performance optimisation. Keywords: Facilities Management, corporate real estate Built Environment, Facility Condition, Customer satisfaction, Key Stakeholders, Best Match Approach

55

C068

Current rural valuation practice: A survey of NSW valuers and agribusiness managers

Chris Eves

School of Construction, Property & Planning University of Western Sydney

Penrith South, Australia Despite the advances that have been made in relation to the valuation of commercial, industrial and retail property, there has not been the same progress in relation to the valuation of rural property. Although a number of rural property valuations also require the valuer to carry out a full analysis of the economic performance of the farming operations, as well as the long term environmental viability of the farm, this information is rarely used to assess the value of the property, nor is it even used for a secondary valuation method. Over the past 20 years the nature of rural valuation practice has required most rural valuers to undertake studies in both agriculture (farm management) and valuation, especially if carrying out valuation work for financial institutions. The additional farm financial and management information obtained by rural valuers exceeds that level of information required to value commercial, retail and industrial by the capitalisation of net rent/profit valuation method and is very similar to the level of information required for the valuation of commercial and retail property by the Discounted Cash Flow valuation method. On this basis the valuers specialising in rural valuation practice have the necessary skills and information to value rural properties by an income valuation method. Although the direct comparison method of valuation has been sufficient in the past to value rural properties the future use of the method as the main valuation method is limited and valuers need to adopt an income valuation method as at least a secondary valuation method to overcome the problems associated with the use of direct comparison as the only rural property valuation method, especially in view of the impact that farm technical, financial and environmental management can have on rural property values. This paper will review the results of an extensive survey carried out by rural property valuers and agribusiness managers in NSW, in relation to the impact of farm management on rural property values and rural property valuation practice. Keywords: Rural land, rural economics, rural land values, farm management, land use, rural land investment.

56

C069

Survey of Investors in the Private Rental Market in South Australia

Valerie Kupke W.Marano P.Rossini

P.Kershaw School of International Business

University of South Australia Adelaide, Australia

Private rental housing in Australia is provided by a diverse group of property owners ranging from householders to non-profit institutions, employers and corporations. However the largest group of providers is made up of private households who supply some 60 percent of all rental accommodation. This investor mix is matched against what has been quantified as a shrinking supply of low cost private rental housing in Australia. Sustained government withdrawal from the public rental sector and the lack of enthusiasm from the large commercial sector ensures that these small investors, that is household or family, will continue to supply significant levels of rental housing including the low cost properties This paper is based on a project funded by the Australian Research Council into the supply side of the private rental housing market in Adelaide the state capital of South Australia. The project aimed to develop a better understanding of the incentives and barriers to investment in this market in order to increase the level of investment particularly at the low cost end. The project sought to assess the incentives for investment by first examining the yields and returns from some 1000 properties bought for investment between January 1997 and March 2002. Secondly by surveying a sample of investors who had bought within the same period and whose properties are represented in the analysis of returns. This paper reports on the survey of investors. Keywords: rental housing, housing market, investment

57

C070

Aligning Corporate Real Estate and Business Strategies

Peter Wills University of Western Sydney

Blacktown, NSW, Australia This paper will investigate the concept of aligning corporate real estate and overall business strategies. The types of corporate real estate holdings will be investigated and as well as the role of corporate real estate in the corporation. To understand the role of corporate real estate it is also necessary to be able to measure the performance of CRE in the corporation as well as compared to other property markets. The thrust of the paper will deal with the assessment of current corporate real estate strategies. The flexibility of corporate real estate portfolios will be reviewed and its possible impact on the ‘bottom-line’ of the balance sheet. The relationship of these processes should be linked to the short, medium and long-term strategies of the company and show up in the boardroom decisions. The concept of attempting to align CRE and business strategies will also be reviewed as well as management structures to achieve this goal. The methods that could be adopted to meet the goals will also be detailed. The conclusion will cover the various strategic models that could be used or are in use today with emphasis on how they have changed over the last decade. It will also discuss the usefulness of these methods as well as the possible financial implications for the company as a whole. Keywords: Corporate real estate – types of corporate real estate - benchmarking corporate real estate - corporate real estate strategies - strategic business planning - aligning strategies - flexibility of corporate real estate assets

58

C071

Residential Property Investment - Who is qualified to provide advice

Vince Mangioini

University of Technology, Sydney Bondi, Australia

\ The provision of investment advice in Australia remained unregulated until the Financial Services Reform Act 2001 (Commonwealth) took full effect on 11 March 2004. Included in this reform was the defining of “financial product advice” and its potential for application to property investment. The Commonwealth legislative framework in which financial service reforms operate has created a dichotomy with the prevailing State legislation governing property professionals and the information that has traditionally been provided by them to purchasers of investment property. This paper investigates the respective objectives of existing State Government legislation in the administration of property professionals and the potential impact that Commonwealth Government reforms introduced during 2004 have on the advice provided by property professionals regulated under State Government legislation. Keywords: Financial Product Advice, Investment Advice & Financial Service Reforms.

59

C072

An alternative House Price Index Method

Martin Hoesli S.Bourassa

J.Sun University of Geneva and University of Aberdeen

Geneva, Switzerland This paper presents the Sale Price Appraisal Ratio (SPAR) method for constructing house price indexes. The method uses ratios of transaction prices and appraisals to build up an index. We compare this method to the more traditional repeat sales and hedonic methods and conclude that it has a number of advantages and few disadvantages relative to those methods. The method has been used since the early 1960s to produce semi-annual price indexes for regions and urban areas in New Zealand. We compare the official New Zealand indexes for three cities with repeat sales and hedonic indexes created from the same transactions data. We observe that the SPAR method produces an index very much like a repeat sales index. However, in rising markets the hedonic indexes diverge from the SPAR and repeat sales indexes. We show that this is attributable to sample selection problems that bias hedonic indexes toward newer properties. Finally, we suggest a simple way to insure that the SPAR method yields a constant-quality index and we show how application of that technique affects the indexes for the three New Zealand cities. Keywords: house price indexes

60

C073

Stakeholder Impact on Property Education Programs

Terry Boyd School of Construction and Property Queensland University of Technology

Brisbane, Australia This paper examines the forces of change currently impacting on property education and describes the probable resultant changes in the delivery and content of existing property education programs over the next decade. Over the past few years several surveys of property education stakeholders have been undertaken internationally and this literature is reviewed at the commencement of his paper. The current and anticipated demands of the different stakeholders, in particular the employers, students and professional associations, are categorised and evaluated in the paper. In addition the current pressures on property courses within Australian Universities are superimposed on this situation. Probable responses to stakeholder demands are evaluated in the light of current educational trends. Based on these demands and responses, future paradigm shifts are considered. The probable, major impacts include a multi-media, client-driven learning environment, different foci in the curriculum and the primacy of professional upgrade education. These issues are elaborated on in the final part of this paper. Keywords: Online learning, behavioural studies, industry-linked, integration, market analysis, problem-based learning

61

C074

The Triple Bottom Line Approach to Property Performance Evaluation

Terry Boyd P.Kimmet

School of Construction and Property Queensland University of Technology

Brisbane, Australia 7 The utility of enclosed space is the basic performance measure for built assets. Historically these assets have been assessed on the ability of the occupier to pay for the space, resulting in an expression of the financial return from the investment. This concept is being expanded today by astute investors who are taking account of longer-term considerations, and, in particular, the sustained optimal utility of the space. This paper is concerned with the development of triple bottom line performance benchmarks for operational built assets. Specifically it maps out the conceptual changes taking place from short-term financial agendas to longer-term economic, environmental and social considerations. While reasonable progress has been made developing environmental rating systems for building design and operation, significantly less work has been done identifying and measuring the social factors relating to built assets. With this in mind, particular emphasis is placed on the identification and measurement of the most relevant social issues. The case study research of the CRC-CI project on ‘The Evaluation of the Functional Performance of Commercial Buildings’ is outlined, and the complementary work of other leading researchers in this field is reviewed. Finally, avenues for further research are suggested. Keywords: Social indicators, efficiency, environmental benchmarks, evaluation, cultural issues The research described in this paper was carried out by the Australian Cooperative Research Centre for Construction Innovation within Project 2001 – 11 – C.

62

C075

The Branding of Suburbs

Deborah Levy Property Department University of Auckland Auckland, New Zealand

Branding is a common concept within the marketing literature, but little information has been collected regarding the branding of suburbs and how this links with how residents identify with the suburb in which they reside. This project aims to clarify some of these issues by analysing and expanding the findings in the marketing literature and considering its relationship to area of residence. Information will be collected from real estate agents as experts in the field and reported in this paper. The implications of the results of this study to valuation will be discussed. Keywords: Branding, suburbs, behavioural research, valuation

63

C076

Ownership and community assets: Managing change processes in strategic local government corporate property management

Christopher Heywood

G.Missingham R.Kenley

Faculty of Architecture, Building and Planning The University of Melbourne

Melbourne, Australia Replacing and upgrading community assets raises issues of perceptions of ‘ownership’ of facilities. Strategic local government Corporate Property management aims to meet organisational objectives, not necessarily those of vested sectional interests. Being corporate suggests the development of multi-purpose facilities to replace outdated existing single purpose facilities. Such proposals challenge ownership perceptions based on the old facilities, and create opportunities to shape different senses of ownership for the new facility. This paper discusses the issues of ‘ownership’ within the context of a new multi-purpose Library-Community Centre. Two forms of ‘bad’ ownership are identified. ‘Good’ ownership has three aspects that are desirable for the organisation, tenant groups and the wider community Processes used in managing these changes in ownership are elaborated. As the project is not due for occupation until mid-2005, this research investigates only the project’s pre-design and design phase processes. Ownership in-use of this community asset must be future research. Keywords: change management, corporate real estate, local government, perceptions, facilities.

64

C077

The Constraints of Housing Supply in Fiji

Abdul Hassan University of the South Pacific

Suva, Fiji This paper provides an overview of the status of housing supply in Fiji. It identifies the reasons for the shortages of housing in the urban centres. A number of housing policies created by the government has not improved the situation. The provision of infrastructure, the regulation of land and housing development, the organisation of the construction and material industry, and the involvement of the sectors in building and construction all have achieved little success. Policies such as security of tenure for housing land and the ability to use it as an asset also affects the quantity of housing. Investigation of all these factors is needed as they heavily influence the cost, quality and production of affordable housing, which accommodates most of the low-income population in urban areas. Using Suva City as case study this paper looks into the issues that have inhibited the development of housing in urban centres. Analysing the data collected, using standard econometric techniques the major obstacles to housing development are identified and addressed. Keywords: Urban housing, development, constraints, Fiji.

65

C078

Price versus value versus worth: a capital market context

David Parker Australian Valuation Office

Canberra, Australia The terms price, value and worth have been extensively considered in the valuation literature and defined by the International Valuation Standards Committee (IVSC). Similarly, the terms systematic, unsystematic and idiosyncratic have been extensively considered in the finance and capital markets literature and defined by various authors. Following review of relevant literature, the respective definitions are compared and contrasted and a framework proposed for consideration of price, value and worth in a capital markets context.

66

C079

Urban trees - valuation issues and challenges

David Parker Australian Valuation Office

Canberra, Australia The recent circulation by Standards Australia of a draft standard entitled "Amenity Valuation of Urban Trees - A Guide" has generated considerable discussion. By comparing and contrasting the role of trees in western tradition with that in indigenous tradition, a context for the attribution of value to trees is proposed for consideration against the criteria contemplated for urban trees in the draft standard.

67

C080

Trading in Australia's Greatest Liquid Asset: Water

John Keogh Barrister at Law

Culwulla Chambers Sydney, Australia

The Water Management Act 2000 revolutionised historical conceptions of water as a fixture by acknowledging the separation of water rights from land ownership. Further amendments to the Act in 2004 strengthened water rights with the grant of perpetual water licences to promote certainty for water uses. The amendments also implement a comprehensive planning regime that will result in greater flexibility for Water Authorities to pursue conservation strategies. This paper will assess the contention that the creation of a new market for tradable proprietary rights in water will promote the efficient and equitable sharing of this most valuable natural resource to the benefit of both water users and the environment. Keywords: Tradable Water Licences, natural resources, property rights, entitlements, separation from land, water service institutions, Register, ‘Bankability’ of water licences

68

C082

A Model for Valuing Subdivision Development Land

Evan Gamby P Bendall A Smee

Department of Finance Banking & Property Massey University

Auckland, New Zealand The total return required to compensate an investor for undertaking land development involves risk/return trade-off analysis. The problem is that in the absence of a volume of comparable sales, existing methods - particularly the hypothetical subdivisional budget formula method or hyposub - concentrate on the determination of residual land value, utilising subjectively derived single figure profit and risk and/or discount rates. The investor/developer determines price based on expected return, both total and equity; the financier is interested in risk exposure during the subdivision process; the valuer assesses residual value. The authors identified the need for a model that compares the results of the hyposub method with Discounted Cash Flow (DCF) analysis and addresses the risk/return tradeoff. The authors postulate that a comparative hyposub/DCF model that allows for sensitivity analysis should provide more useful results for investors, valuers and financiers. The hyposub is the traditional shortcut method used by valuers. DCF should better reflect the perceived risk exposure at various stages of the development process. Sensitivity analysis assists risk assessment and focuses attention back on the risk adjusted return being the driving determinant of land value. The model has been built on a standard excel framework for ease of use. No other comparable models have been identified in New Zealand or Australia. Keywords: Discounted Cash Flow, land development, subdivision, valuation subdivision model, hypothetical subdivisional budget formula, hyposub, risk/return trade-off, sensitivity analysis, heuristics.

69

C083

Market making in the Real Estate Market: The Case of Real Estate Services

Eamonn D'Arcy

Centre for Spatial and Real Estate Economics The University of Reading Business School

Whiteknights, England This paper builds on previous work by the author which examined the real estate market as an information system. Within this framework market institutions are viewed as a rational response to information costs both collection and communication and the potential for information asymmetries. Intermediation takes place through specialised market-makers who collect and communicate information and structure information flows. Such activities become an important source of value added and have the key objective of reducing information costs through the creation of an information synthesis. Utilising this information system framework, the current paper explicitly considers the role of real estate service firms as market makers in the real estate market. In particular, the analysis focuses on an assessment of the information processing efficiency of market-making firms and the wider implications which stem from this for the functioning of the real estate market as an information system. Specifically, the paper attempts to address the following questions: What determines the information processing efficiency of market- making firms? How does efficiency vary with firm characteristics? What are the implications of internationalisation for the efficiency of market-makers? And finally how will the level of efficiency impact on the accuracy of information synthesis and the potential of the market-maker to reduce information costs for market actors? Keywords: Economics of information; real estate services; market-making

70

C084

Exploring the yields on residential investment property

Bob Hargreaves Finance, Banking and Property Department

Massey University Palmerston North, New Zealand

84 Over the last 3 years a considerable amount of investor attention has been directed to residential investment property. This paper reports the results of a comprehensive survey of residential landlords covering 1600 New Zealand rental properties. Information on the income and expenditure patterns from houses, flats and apartments was analysed to derive the gross and net yields, the capital gains being achieved, and the total returns over the holding period. The paper then goes on to use multiple regression analysis to further explore the relationship between gross income and value for a selection of rental apartments and rental flats. Keywords: Gross yield, residential rental property, New Zealand

71

C085

Property valuation and analysis applied to environmentally sustainable development

Jon Robinson

Faculty of Architecture Building and Planning The University of Melbourne

Melbourne, Australia The property market continues to be unsure about the benefits of environmentally sustainable development (esd) and accordingly esd is not usually reflected in the property valuation and analysis process. Using the concepts of price and worth, an outline valuation process is developed to assist the valuer to take esd into account through rent, capital; growth and psychic income. Research has shown that lessees are prepared to pay 5% to 10% higher rent for improved comfort and control of the environment (Maguire & Robinson, 2000). Analysis of market evidence has shown that a psychic element of income can increase prices paid for properties by reducing the initial yield (Baum & Crosby, 1995). Taking all of these elements of return together, a property exhibiting the highest environmental design and management principles can achieve a substantially improved property investment worth. These remain to be reflected in the general approach to estimates of market price. Keywords: price and worth, esd, psychic income, income approach, market sentiment Baum A & Crosby N (1995): Property Investment Appraisal. London: Routledge. 2nd edition. Maguire P & Robinson J (2000): Building evaluation by prospective lessees. CIB W70 2000. Brisbane: Queensland University of Technology.

72

C086

Towards understanding real estate franchises in Australasia

Susan Flint-Hartle Massey University

Auckland, New Zealand 8 This preliminary paper is an exploratory study that describes business format franchising in the real estate agency sector. Extant franchise theory development is discussed and a related set of propositions is developed specifically for application in this unique section of the property industry. Examination of real estate services delivery systems provides an insight into the mutually dependent environment in which real estate franchises operate. Real estate franchise systems are found to grow through a series of new venture creations and international amalgamations, which result in an expanding pool of parallel, co- dependent business operations. The paper sets the scene for case studies and quantitative survey of two of Australasia’s biggest real estate franchise systems. Keywords: franchising, real estate agency sector, New Zealand, Australia, parallel business growth, co-dependent business venturing, service delivery

73

C087

Gold Mining – Environmental Stigma Or Property Value Enhancement

Evan Gamby

P. Reid Department of Finance Banking & Property

Massey University Auckland, New Zealand

The Waihi Goldmining Company re established gold mining activities at Waihi, New Zealand in the mid 1980’s, thirty years after the closing of the Martha mine, which had been a major economic contributor to both Waihi and New Zealand until its closure in the 1950’s. The intention to re establish gold mining at other locations on the Coromandel Peninsula was strenuously and successfully opposed by anti-mining environmentalists in the 1980’s. The possibility of new gold mining ventures has emerged following an Environmental Court decision in July 2004 to allow goldmining to be reclassified as a discretionary activity under the Resource Management Act. The authors have examined the effect of the Waihi Golmining Company activities on residential property values at Waihi over the past 17 years by comparing repeat sales and time series data on property values, and by regression analysis. Data have been collected over a 24-year period for the purpose of analysis including data both before and after the timeframe when mining activities may be considered to have affected values. The aim is to determine if goldmining activities have economic benefits to their surrounding residential communities, measured by an increase in residential property values that are not enjoyed by other nearby residential communities. Keywords: Gold mining, goldmining effect on property values, time series analysis, regression analysis, residential property values, residential property data series, repeat sales, Resource Management Act, anti goldmining campaign, heuristics.

74

C088

Modeling the Value of View in Real Estate Valuation: A 3-D GIS Approach

Shi-Ming Yu

S-S Han C-H Chai

School of Design and Environment National University of Singapore

Singapore Views, being a qualitative and subjective variable, are difficult to measure and quantify for valuation purposes. To quantify view in a variable, there is a need to reflect the influence of the height of surrounding buildings, the surrounding topography, as well as the height and orientation of the subject property itself. Such influences could only be captured using 3-D modeling techniques. Few studies have explored the use of 3-D modeling for valuation and mass appraisal purposes. This paper demonstrates the use of 3-D GIS and regression analysis to estimate the value of a view in an urban housing market. It focuses on the valuation of sea view in private high-rise residential properties located near the eastern coast of Singapore. Our results show that an unobstructed sea view will add an average premium of 15% to the house price. In addition, we further illustrate the application of our model in a simulation exercise to maximize the seaview of a redevelopment project in the same neighbourhood. The paper further suggests implication of pricing strategies for private developers in pre-construction sales. Keywords: view, valuation, 3-D GIS

75

C091

Market Analysis Study of the Value Technology System to Home Owners

Anthony Mills

P Williams Department of Architecture, Building and Planning

The University of Melbourne Melbourne, Australia

Smart Technology involves the integration of a variety of home systems including lighting, climate control, security etc. to enhance the comfort, convenience and economy of the home for its users. It is currently unknown if homebuyers believe that these systems add value to the home. This study used the market value of home sales and an attitudinal survey of homebuyers, to determine the increased value of homes containing Smart Technology. The results demonstrated that a significant price premium was paid by for the incorporation of the technology into new homes. In addition, the research suggests that the use of this technology is not limited to high-income earners or other demographic stereotypes. Instead it has broad market appeal and the potential to save energy for the community at large. Keywords: Intelligent buildings, building technology, home automation

76

C092

Accreditation of Real Estate Programs

Karl-Werner Schulte Gisela Schulte-Daxbök European Business School

International University, Germany

Today, accreditation in the US is one of the three major processes used to maintain public accountability and foster continuous improvement in programs of study in higher education. The other two processes include government regulation and free-market competition. Accreditation in Europe is a relatively recent phenomenon. The most reputed accrediting bodies are the US based AACSB Association to Advance Collegiate Schools of Business and the European Quality Improvement System known as EQUIS. With regard to specific programs of study the RICS Royal Institution of Chartered Surveyors has a long tradition in accrediting real estate programs. The RICS approach is both a member’s organization and a self-regulating professional body. The accreditation standards are different from AACSB and EQUIS. The question arises whether a specific accreditation of real estate programs is attractive for universities which orientates at AACSB and EQUIS standards. The paper tries to give an answer.

77

C093

The Shape of the Property Cycle

John MacFarlane College of Law and Business University of Western Sydney

Australia Much has been written on the Property Cycle and the interested reader will be very familiar with the representation of the Property Cycle as a sinusoidal curve with various parts of the curve labelled with their characterising property features (the point at which one would expect high and low vacancy rates, increasing or decreasing levels of property investment, increasing and decreasing levels of construction or take-up of space, etc). Little has been written, however, on the “real” shape of the cycle. Is the cycle, in fact, as smooth and symmetric as is usually represented (typically with equal up-side and down-side amplitudes and similar time on the up-swing and down-swing)? What are the characteristics the “cycle” must have to be properly termed a “cycle”? This paper will consider both the theoretical shape of the property cycle and its reality using data from different property types and locations. Keywords: Property cycle, Cycle period, Cycle amplitude, Symmetry

78

C094 Challenges in the Assessment of the Residual Service Life of Aging

Buildings

Ashish Shah Arun Kumar

Research Development Unit RMIT University

Melbourne, Australia

Opportunities for the efficient life-care management of public building portfolios are emerging due to the worldwide phenomenon of an aging building infrastructure. Appropriate structural engineering practices along with facility management can assist in optimising the remaining life cycle costs for existing public building portfolios. A more efficient decision-making methodology needs to be implemented in respect of: demolition, refurbishment, rebuilding as well as the adoption of the “do nothing option”. In order to facilitate these decisions, the health status of buildings needs to be assessed from several perspectives including supply and demand considerations and related economic factors. An emerging methodology known as residual service life assessment enables one to assess the investment viability of a refurbishment project when it is competing with other capital works and/or refurbishment projects. This paper is part of a research project focusing on the development of a residual service life assessment/prediction methodology for refurbishment projects. The paper discusses various challenges posed by projects that involve the refurbishment of public buildings with a view towards the development of a residual service life assessment methodology. The paper concludes with the authors’ observations and research potentials. Keywords: Refurbishment projects, Public buildings, Residual service life assessment, life care management 9

79

C095

Professional Socialization of Valuers: Graduate Experience

Geoff Page School of International Business

University of South Australia Adelaide, Australia

Professional socialization refers to the acquisition of values, attitudes, skills and knowledge pertaining to a professional subculture. This paper explores the membership requirements and subsequent experiences of graduates seeking to become full members of the Australian Property Institute (API) and the Royal Institute of Chartered Surveyors (RICS). Problems experienced during the socialization process are examined from a graduate and examiner perspective and include issues such as breadth of experience, clarity of guidelines and fear of interview. The paper reviews the current API white paper entitled ‘Signing of valuations and classes of membership’ and identifies whether the proposed changes address the current perceived deficiencies in membership requirements for potential associate members. Examples are provided of good practice that supports professional socialization and assists graduates in their preparation for professional interviews.

80

C098

The Linkage beween Listed Property Trusts and Stocks based on Systematic and Unsystematic Risks

Rohit Kishore

School of Construction, Property and Planning University of Western Sydney

Sydney, Australia The Australian Listed Property Trusts (LPTs) have been a successful indirect property investment vehicle for the last three decades. The sector has gone through a substantial growth phase and the aggregate market capitalisation has reached about $60 billion, which constitutes about 8% of the total Australian stock market capitalisation (UBS Warburg, 2004). The maturing of the sector has seen a changing risk/return profile of LPTs over the years. For example, Newell and MacFarlane (1996) showed evidence of LPTs being highly correlated with stocks, whereas, Newell and Acheampong (2001) found evidence to suggest a substantial reduction in correlation between stocks and LPTs, and LPT correlations with stock market varying significantly between up and down markets. Similar results were reported by Goldstein and Nelling (1998) and Liang (2002) for the U.S. real estate investment trusts (REITs). This paper investigates the changing risk profile between LPTs and common stocks based on systematic (beta) and unsystematic (alpha) risks. As such, this study not only extends the findings of Newell and Acheampong (2001), but also adds additional aspects of risk measurement, by separating the overall risk into systematic and unsystematic components. The analysis of the results should add further to the findings of Newell and Acheampong (2001) by answering the question as to whether, it has been the systematic, unsystematic or both components of the overall risk that have been changing over time. Such findings should enable analysts determine which risk component is more important for selecting LPTs in mixed-asset portfolios. The analysis will span over 20 years between 1982 through 2002, including two sub-periods; the down market between 1982–1992 and up market between 1993-2002. The LPT and stock market data from UBS Warburg will be utilised in this study.

Keywords: Listed Property Trust, correlation, volatility, systematic and unsystematic risk

81

C100

The cyclical nature of tourism accommodation in Melbourne

Petra Triandos R Russell

RMIT University Melbourne, Australia

99 Tourism accommodation has been a part of the property industry’s history in Melbourne since the early 19th century. However it was not until the 20th century, that we saw significant growth and maturation of tourism and the tourism accommodation sector. Globally, the demand side of tourism boomed after WWII, providing the impetus for an equally enthusiastic response from the tourism accommodation sector in meeting the demand. Melbourne was part of the growth of global mass tourism and accordingly, from the 1960s onwards, the city saw the development of a plethora of international standard hotels. However, the growth in the supply side of tourism was not steady nor predictable. Over the next 60 years, Melbourne experienced a number of cycles in tourism accommodation development, being affected by numerous variables such as the general economy; government policy; growth in events; and the presence of entrepreneurial spirit. This paper will present an historical overview of the tourism accommodation cycles experienced in Melbourne and will discuss the various impacts that triggered and shaped the cycles. To date there has been relatively little research investigating the nature of the cycles in the tourism accommodation market. The tourism accommodation market appears even more sensitive than the residential or other commercial sectors of the property industry as it is not only affected by the usual factors impacting the property market, it is also heavily reliant on fickle tourism trends and the many variables that are important to tourism demand. The study will identify the cycles experienced by the tourism accommodation sector in Melbourne over the last forty years and in particular, the role that entrepreneurship plays within the sector and the effect the cycles have had on their activities. In undertaking this study, a two-pronged approach was utilized. Firstly, historical documents and secondary data were examined to detail the ‘story’ of the development of Melbourne’s tourism accommodation industry and secondly, depth interviews were conducted with present and past key players to gain an insight into the events and impacts that affected their development activities. The results from the study have revealed four key development cycles:

1. 1962 – 1974: early growth, first international hotel 2. 1975 – 1982: establishment of development groups; increase in

international tourism 3. 1983 – 1990: significant growth of hotels; internal competition; increasing

innovation 4. 1991 – 2004: introduction of boutique hotels and serviced apartments

In conjunction with outlining the development eras, this presentation will highlight a number of key entrepreneurs that have shaped the tourism accommodation sector in Melbourne.

82

C101

Real Estate Agents and Consumer Service: The Voice of a Busy Market

Graham Crews

S Hovell Department of Finance Banking & Property

Massey University Palmerston North, New Zealand

Research into consumer perceptions of the service offered by real estate agents has tended to be ad hoc and spasmodic, or conducted by organisations who regard the results as commercially sensitive. Despite high public interest and consumer group criticism about the quality and cost of services offered by real estate agents, consumer research findings are seldom released into the public arena. One notable exception has been the residential consumer research conducted for the Real Estate Institute of New Zealand at regular intervals over the past decade. A random selection of recent buyers and sellers were mail surveyed and asked to provide opinions about the quality and cost of services offered to them by real estate agents with whom they had contact during their purchase/sale transaction. Surveys have been conducted every three years since 1990, and again in 2003 (five in total). The 2003 survey, based on an identical sample frame used in 2000, was based on a random selection of 4500 recent users of residential real estate services in the cities of Auckland, Christchurch and Dunedin, and the provincial regions of Wanganui/Manawatu and Waikato/Bay of Plenty/Gisborne. The findings are published by the Institute and attract considerable interest from real estate practitioners, academics and the public at large. This paper examines and discusses the findings of the latest survey and also explores comparisons with findings from the previous four surveys. Interestingly, the 2003 survey was conducted in a very busy market and the findings have also been examined from that perspective. Keywords: Real estate agency, real estate agency practice, real estate consumer research, consumer surveys, property buyer satisfaction, property seller satisfaction

100

83

C102

Broadband Technology: An appraisal of the availability and use by small office occupiers and the potential impact upon the office

market

Vivienne Spurge Department of Real Estate Management

Oxford Brookes University Oxford, UK

Rapid advances in bandwidth specification have enabled a range of new working practices, such as home-working and hot-desking. Occupiers are now demanding high levels of broadband technology in their offices, providing fast and uninterrupted data connectivity. However, despite the well publicised advantages of broadband, there are a significant proportion of businesses still not in a position to benefit from the new technology. Broadband is now available to office occupiers in all of the major UK conurbations, and ducting channels for broadband cabling are now included as a standard item within the specification of a new Grade A specification office building. However, there are still areas of the UK where broadband is still not available, notably in rural areas and smaller towns. In addition, there appears to be little initiative being shown by landlords to provide broadband to existing smaller office buildings, thereby placing reliance upon the occupier to ‘light up’ their own building. Anecdotal evidence suggests that there are a significant proportion of small office users who do not yet have access to broadband, and rely upon a traditional dial-up connection. Smaller office occupiers, with a total number of employees of less than 25 people, who form a major share of the UK office market, are tending to be overlooked by the large broadband providers. The UK Government is aware of the limitations of the existing supply of broadband and is currently promoting a number of new initiatives to ensure a higher level of broadband coverage throughout the country. This paper develops earlier research by the author to establish the availability of broadband for office occupiers, the initiatives are being undertaken by statutory authorities and broadband providers to increase broadband supply levels and to consider whether the availability of broadband is influencing the choice of location and working practices of small office occupiers. Keywords: Broadband technology, offices occupiers, business location, working practices.

84

C103

Trading Rules in Housing Markets - What can we learn?

Greg Costello Department of Property Studies, Curtin Business School

Curetin University of Technology This paper examines the application of trading rules in testing informational efficiency in housing markets. Since the seminal work of Linneman (1986) there have been substantial advances in the volume and quality of data available to test information diffusion processes within housing markets. Given the sophistication of current data sources, it is surprising that there has not been more applied research in this field. The paper reviews and extends the work of Linneman (1986) and Londerville (1998) to an empirical analysis of Western Australian housing data. Whereas most previous studies have focused upon hedonic methods to predict future house prices, this study also incorporates repeat-sales data so that predicted and actual selling prices of individual properties are available for analysis. The results support the view that idiosyncratic information diffusion processes exist within housing markets. These processes are influenced by levels of aggregation within the data both across spatial regions and price segments.

85

C106

Valuing ground rentals - modelling the land value percentage rate

Rodney Jeffries Property Group, Commercial Division

Lincoln University New Zealand

Ground rentals are commonly valued by applying a ’ground rental rate’ as a percentage per annum to a given land value. This paper presents a ground rental valuation model to determine the appropriate ‘ground rental rate’ based on equating the long-term costs of building on leasehold land versus freehold land. The model solves for a ground rental that produces equivalent net present values at differential freeholder’s and lessee’s required investment yields. These yields reflect the different risks and returns in ground leasing compared to outlaying capital to buy land for erecting a building as an investment property. Keywords: Ground leases, Ground rental valuation, land value, rental percentage, leasehold investment yields, leasehold v freehold investment

86

C109

Compensation Models for Native Title

Raewyn Fortes Department of Finance Banking & Property

Massey University New Zealand

This paper studies case law precedent in terms of compensation particularly for native title. While a clear precedent has recently been set in Australia in the Mabo (Mabo and ors v The State of Queensland (1992) 175 CLR 1) case, there is still not one compensatory model adequate for native title. Each case needs to be assessed on its own merits and varying types of compensation awarded accordingly.

87

C110

Revising the Conceptual Basis of Price: Its Impacts on Agency Agreements

Hera Antoniades

Garrick Small University of Technology

Sydney, Australia

The obligation on agents to set a realistic selling price creates a tension when faced with winning a listing for sale. The question of how accurately a salesperson can estimate price, and under what conditions raises important questions regarding the nature and sociology of price. This paper critiques various theories of price in the light of the probability of a property sale in practice.

The market theory of price is found to have significant practical shortcomings. It is argued that other interpretations may be more successful in understanding the sociology of price. In particular, it is argued that a revised methodology should be considered in order to push our understanding of property pricing forward.

88

C111

Corporate Governance and Real Estate Industry

Karl-Werner Schulte Christian Kolb

European Business School International University, Germany

Real estate is nowadays a global business and corporate governance therefore an important issue for international investors, lenders, occupiers and developers worldwide. Some of the major issues real estate companies are concerned with today are standardized property valuation, transparency, executive compensation, board member’s qualification and board appraisal, investor’s relations and corporate rating. Corporate governance has to be perceived as a big opportunity for real estate industries worldwide in order to improve their reputation and to become more professional.

89

C112 A critical analysis of US real estate appraisal methods when used

for financial reporting according to the International Financial Reporting Standards (IFRS)

F. Ferdinand Spies Daniel B. Wilhelm

European Business School International University, Germany

As a result of an ongoing globalisation process and the increase of international investors it is important to uniform financial standards to provide a standardized financial reporting system which allows a direct comparison of financial performances across country borders. With the International Financial Reporting Standards (IFRS, former IAS) a promising attempt is being made. While the IFRS will be mandatory for listed companies in the European Union by 2005, the IFRS have not been accepted by the US Security and Exchange Commission (SEC) yet. But the private sector Financial Accounting Standards Board (FASB), which is responsible for the US-GAAP standards, and the International Accounting Standards Board (IASB) have agreed to converge their standards. This is an important step in the standardization process of the financial reporting standards, as it might lead to an acceptance of the IFRS by the SEC. But even today many companies recognize the need to supplement their US-GAAP financial reports with IFRS commentaries to foster the transparency for international investors. But as the U.S. have their own national valuation methods, it is important that these are compatible with the requirements for asset valuation of the IFRS. The goal of this paper is to examine the requirements for valuation methods in accordance with the IFRS and what possible conflicts could arise between the IFRS and the U.S. valuation methods. Keywords: valuation, accounting, IFRS, IAS, USA

90

C113

The Retail Leases Act 2003 In Victoria and the Implications of Land Tax

Ann Brownell RMIT University

Melbourne, Australia This paper investigates retail leases in Victoria. The Retail Leases Act 2003 (the Act) is emerging as the main governing legislation for retail leasing in Victoria. The scope of the Act now encompasses retail premises with occupancy costs of less than $1 million dollars per annum. As current leases under the Retail Tenancies Act 1986 or the Retail Tenancies Reform Act 1998 are renewed they will become subject to this new Act. As the Act prescribes further legal responsibilities for landlords and additional compliance issues, owners and agents are faced with potential financial consequences for any breaches of this Act. In addition, the Act established the Office of the Small Business Commissioner, which is empowered to undertake investigations and mediation for disputes between landlords and tenants. As of 1 July 2003, the Act also prohibits landlords recovering from the tenant any land tax as part of the disclosed outgoings. Subsequently landlords of a retail premises may find that after paying the Victorian Government’s Land Tax the property will then show a negative return. Hence the value of the investment property may be eroded. Keywords: Victorian Retail Leases Act 2003, Disclosure Statements, Office of the Victorian Small Business Commissioner, Mediation, Land Tax Schedules, Negative Investment Returns

AUTHOR INDEX

91

Paper Page

Adair, A C065 52

Antoniades, H C110 87

Armitage, L C053 45

Armitage, L C007 7

Bendall, P C082 68

Berry, J C065 52

Bjornlund, H C041 36

Bjornlund, H C026 25

Bourassa, S C072 59

Boyd, T C073 60

Boyd, T C074 61

Boydell, S C023 23

Bray, N C066 53

Brooks, R C014 14

Brownell, A C113 90

Chai, CH C088 74

Chan, N C015 15

Chau, KW C010 10

Chau, KW C038 34

Chiang, KCH C017 17

Cieleback, M C005 5

Cieleback, M C006 6

Coleman, L C004 4

Conisbee, N C060 48

Costello, G C103 84

Courchane, M C009 9

Crews, G C101 82

D’Arcy, E C083 69

Dimovski, B C014 14

Dobricza, A C051 44

Duenas, R C013 13

Elliott, P C054 46

Everist, E C053 45

Eves, C C068 55

Flaherty, J C049 42

Flint-Hartle, S C086 72

Fortes, R C109 86

Francis, V C053 45

Gamby, E C082 68

Paper Page

Gamby, E C087 73

Han, H C003 3

Han, SS C059 47

Han, SS C088 74

Hargreaves, B C084 70

Harris, D C001 2

Hassan, A C077 64

Hedander, J C042 37

Heng, S C016 16

Heywood, C C076 63

Higgins, D C048 41

Hoesli, M C072 59

Hovell, S C101 82

Huston, S C003 3

Hutson, E C028 27

Jefferies, RL C106 85

Karantonis, A C043 38

Karantonis, A C035 33

Kauko, T C012 12

Kenley, R C076 63

Keogh, J C080 67

Kershaw, P C039 35

Kim, J C031 30

Kimmet, P C074 61

Kippes, S C064 51

Kishore, R C029 28

Kishore, R C098 80

Kolb, C C111 88

Kumar, A C094 78

Kupke, V C069 56

Kwok, A C067 54

Lee, ML C017 17

Lee, ML C018 18

Levy, D C075 62

Li, P C043 38

Liu, C C034 32

Lombardo, R C049 42

MacFarlane, J C093 77

Mangioni, V C071 58

Author Index

92

Paper Page

Mann, KF C010 10

Mann, KF C011 11

Marano, W C066 53

Marano, W C069 56

McGreal, S C065 52

McManus, D C009 9

Meen, G C019 19

Mills, A. C001 2

Mills, A C091 75

Missingham, G C076 63

Murphy, L C044 39

Newell, G C020 20

Newell, G C021 21

Newell, G C022 22

O'Callaghan, BO C026 25

Page, G C095 79

Parker, D C078 65

Parker, D C079 66

Pretorius, F C038 34

Raga, A C013 13

Reed, R C001 2

Reed, R C060 48

Reed, R C061 49

Reid, P C087 73

Robinson, J C085 71

Robson, K C045 40

Rossini, P C041 36

Rossini, P C039 35

Rossini, P C066 53

Rossini, P C069 56

Russell, R C100 81

Sarip, AG C027 26

Schukte, KW C111 88

Schulte, KW C092 76

Schulte-Daxbok, G C092 76

Seabrook, R C024 24

Shah, A C094 78

Sheehan, J C008 8

Sirmans, CF C000 1

Paper Page

Skitmore, M C007 7

Small, G C008 8

Small, G C033 31

Small, G C110 87

Smee, A C082 68

Song, Y C034 32

Spies, FF C112 89

Spurge, V C102 83

Stevenson, S C028 27

Stevenson, S C029 28

Sun, J C072 59

Susilawati, C C007 7

Taltavull, P C013 13

Taltavull, P C062 50

Triandos, P C100 81

Tse, MKS C038 34

Tse, R C011 11

Warren, C C054 46

Warren, C C016 16

Warren, C C067 54

Webb, J C065 52

Wilhelm, DB C112 89

Williams, P C091 75

Wills, P C070 57

Wilson, P C030 29

Wu, CW C050 43

Wu, H C061 49

Yigitcanlar, T C003 3

Yu, SM C088 74

Zorn, PM C009 9

Zurbruegg, R C030 29

PRRES ADMINISTRATIVE INFORMATION

93

PACIFIC RIM PROPERTY RESEARCH JOURNAL

SPECIAL ISSUE

CALL FOR PAPERS

“PROPERTY INVESTMENT”

The Pacific Rim Real Estate Society (PRRES) will be conducting its 11th annual conference in Melbourne over 23-27 January 2005, with the conference theme being “property investment”. PRRES now invites contributions for a special issue of the PRPRJ from papers presented at the 2005 PRRES conference relating to the conference theme of “property investment”. This special issue of PRPRJ is scheduled for publication in March 2006, with the guest editors Greg Schwann and Rob Brown from the University of Melbourne. Areas of anticipated property research include, but are not limited to the

following:

• LPT performance issues • International property investment

• Property investment performance analysis • Property investment strategies

• Performance of new property products • Property portfolio analysis

• Direct versus indirect property investment • Innovative property finance

• Performance of specialist property types • Property cycles Papers must examine applied property investment issues in a rigorous manner, and should not merely be descriptive. All papers will be subject to an anonymous review process by two members of the PRPRJ editorial board. Papers must be prepared as per PRPRJ editorial guidelines. Authors should submit their papers preferably as email attachments in Word or pdf format to: Associate Professor Greg Schwann Email: g.schwann@unimelb.edu.au Department of Finance University of Melbourne Parkville VIC 3052 Australia DEADLINE FOR SUBMISSION OF PAPERS IS 11 MARCH 2005 *: to be eligible for this special issue of PRPRJ, it is an essential requirement that the submitted paper was presented at the PRRES 2005 conference in Melbourne.

94

PRRES Financial Report

2004 Financial Year Dear PRRES Members I am pleased to be able to present the PRRES Financial Accounts and statement of our Assets and Liabilities for the year ending 31st December, 2004. PRRES is in a sound financial position with our net assets representing some 3 to 4 years of current annual operating expenses. The Society’s net profit for 2004 of $3,500 is an increase of approximately $1,000 over 2003 (after taking account of one Gold Sponsorship paid in advance). This is despite incurring a small loss on the 2004 Conference (and membership fee collection which is largely undertaken via the Conference) as a result of exchange rate movements. PRRES is in the happy position of having two Gold Sponsors in the API/NZPI and the RICS who have agreed to sponsor the Society (and particularly the annual Conferences) for the 2005-07 period. PRRES is indebted to our Gold Sponsors in enabling us to run quality Conferences and to support the Society’s key publication, the Pacific Rim Property Research Journal. The bulk of our membership fees ($80 of each $100 membership) go to support the Journal. I know members will be very pleased with the quality of the Journal but it needs to be recognised that this does not represent the Journal’s full cost. The work of the Editor, Managing Editor, Board members and the support of many University Departments needs to be acknowledged without which the Society could not provide a Journal to this standard. The Society is in a comfortable financial position. I believe the challenge for the incoming Board will be to fund a number of activities and initiatives which will both strengthen the Society and increase the underlying membership which has been static for the past few years. Finally, I have not yet seen the Financial Accounts for the Journal but anticipate that the Journal’s costs are increasing. Last year, I recommended that the membership fees remain unchanged for 2005. In anticipation of increased Journal costs, I would like to foreshadow that I will move at the Society’s AGM for a small increase in membership fees for 2006 to $A121 (inclusive of GST for Australian members) with 80% of this amount ($A88+ $A8.80 GST) to be paid to the Journal. I will be happy to answer any questions on this report at the Annual General Meeting (and Board meetings). John MacFarlane PRRES Honorary Treasurer 12th January, 2005

95

PRRES AGM 2004

Minutes of 10th Annual General Meeting held at Windsor Suites Hotel, Bangkok

on Monday 26th January 2004 at 12.00pm

1. Commencement: Angelo Karantonis called the meeting to order. 2. Attendance: Navaporan Wongurai, Teeraphan Nayeekanganalap, Somporn Burinyarayikul, Prittha Samitakup, Chatchai Incherditchai, Suthep Rodjakpai, Ninmanee Kamolratanapiboon, Sutee Paongsapas, David Dickinson, Henning Bjornlund, Lieb Nieuwoudt, George Earl, Steven Bourassi, Vincent Peng, Tracey West, Chris Eves, Bob Hargraeves, Jinu Kim, Peter Rossini, Eamonn D'Arcy, Martin Hoesli, Theron Nelson, Simon Stevenson, Chati Laoroekutai, Sirichai Wantanasiri, Pornsark Macthincharandah, Pote Ratamaprug, Geoff Page, Peter Fallon, Sandi Murdoch, John Murdoch, Grace Wong, John Loh, Wayne Dwyer, Sandy Bond, John MacFarlane, Preeda Puengpaopun, Alastair Adair, Thaveechat Jurangkool, Nelson Chan, Chanida Chaloeywares, Sangpao Udomdejwatawa, Nunthanee Ngamrungnirun, Waradej Suchitta, Pachara Pacharavanich, Norman Miller, Deborah Levy, Supoj Chawawawiwit, Niputh Jitprasonk, Ninnat Olanvoravuth, Sanoh Tiyoa, John Sheehan, Ting Kien Hwa, Tan Yen Keng, Anthony De Francesco, Stephen Lee, Sompogn Theesasaparittay, Garrick Small, Richard Reed, Angelo Karantonis, Catherine Morgan, Graeme Newell, Marcus Gieleback, Heinrich Hauss, Evan Gamby, Matt Myers, Rohit Kitshore, Niputh Jitprasonk, John Flaherty. 3. Apologies: Jon Robinson, Sally Sims, Karl Werner Schulte. Spike Boydell. 4. Minutes of the previous meeting held in Brisbane on Tuesday 21st January 2003 (the minutes had been available on the PRRES website and were available at the meeting) were accepted as a true record (proposed by Angelo Karantonis and seconded by Richard Reed). 5. Matters arising from the Minutes: none. 6. President’s Report:

(a) Yu Shi Ming thanked participants for attending the conference in Bangkok and appreciated the efforts of the conference organisers;

(b) Thanks were expressed to Dr David Parker for developing the PRRES protocol;

(c) There are a number of awards at this conference including Best Conference Paper. These awards are yet to be confirmed and details will be available on the PRRES website in due course;

(d) In the future it is hoped to run a collaborative conference with the Asian Real Estate Society (AsRES);

(e) The PRRES Board of Directors will be expanded from 12 to 14 members at this AGM.

7. Treasurer’s Report:

(a) John MacFarlane discussed the status of the financial accounts and distributed a statement of Receipts and Expenditure for the year ending 31 December 2003;

(b) The account balance as at 31st December 2003 was $37,370.15. (c) Overall the society was in a healthy financial position, although should

look at areas to improve income such as an increased membership base. (d) Acceptance of financial report proposed by John Flaherty and seconded by

John McDonagh.

96

8. Journal Report and Update (a) Graeme Newell outlined a brief update of the Pacific Rim Property

Research Journal and called for paper submissions; (b) If authors had not already published in the journal they would be bumped

up the pecking order if they submit an article; (c) Thanks were expressed to all existing and new editorial board members

for their time and efforts. This process ensured the Journal remained a respectable source of refereed articles in the international marketplace;

9. Introduction of President Elect

John Flaherty indicated that the board proposed two new positions for board members. Angelo Karantonis proposed and Richard Reed seconded motion.

10. Election of Board

(a) President Elect: Bob Hargreaves was proposed by Richard Reed and seconded by Yu Shi Ming and elected unopposed.

(b) New Board Members: Spike Boydell retired but was proposed by Graeme Newell, seconded by Richard Reed and elected unopposed. David Parker and Connie Susilawati retired. John Sheehan was proposed by Garrick Small and seconded by Lynne Armitage. Richard Reed retired but was nominated by Angelo Karantonis and seconded by Garrick Small. Sandy Bond was proposed by John Flaherty and seconded by Graeme Newell. Niputh Jitprasonk was proposed by Rohit Kitshore and seconded by Norman Miller. Chris Eves was proposed by Graeme Newell and seconded by Richard Reed.

11. Confirmation of the New President The meeting confirmed John Flaherty as the new President. The outgoing President Yu Shi Ming was thanked for his hard work. 12. 2005 Conference It was confirmed that the 2005 conference is to be hosted at the University of Melbourne. 13. 2005 Conference Presentation A seven-minute video was played to all participants outlining various aspects of the 2005 conference to be held in Melbourne in January 2005. Flyers calling for papers were distributed. 14. Any other business: none. 15. Next Annual General Meeting (January 2005 in Melbourne). Meeting was declared closed at 12.58pm.

97

PRRES Incorporated Statement of Income and Expenditure for year ending 31st December 2004

Income (pre-GST) Number M’ship fee Amount

Professional/Academic members (non-direct) 81 $100.00 $8,100.00 Professional/Academic members (Aust) 4 $100.00 $400.00 Professional/Academic members (non-Aust) 1 $110.00 $110.00 Professional/Academic members (non-Aust) 2 $99.00 $198.00 Student members (Aust) 3 $50.00 $150.00 Student members (non-Aust) non-direct 0 $50.00 $0.00 Student members (Aust or NZ) non-paying 4 $0.00 $0.00 Institutional members 1 $1,000.00 $1,000.00 New member fees (Aust) 4 $20.00 $80.00 New member fees (non-Aust) 1 $22.00 $22.00 Interest - term deposit $822.56 Bank interest $63.81 Conference Refunds $450.00 PRRES/Conference Sponsorship $7,909.09 GST $953.91

Total Income $20,259.37

Expenses (pre-GST)

PRPRJ journal remittance $7,390.00 Plaques & other exp. $206.86 Conference Refunds $450.00 Conference Sponsorship $1,800.00 Loss on Memberships & Currency Exchange Thai Conference $764.98 IRES Fees 2004 (paid in 2003) Advertising NAB Card services $30.26 Bank charges $0.00 GST $954.72

Total Expenses $11,596.82

Net Income $8,662.55

PRRES Incorporated Assets & Liabilities as at 31-Dec-04

Assets

Balance as at 1st Jan. 2004 $11,913.76 Term Deposit as at 1st Jan 2004 $25,456.29 Add net income for year $8,662.55 Total assets $46,032.60

Liabilities

Conference Sponsorship $2,500.00 PRPRJ $160.00

Total Liabilities $2,660.00

Net Assets $43,372.60

Bank: National Australia Bank Branch: 2 Melissa Place, Kings Park. NSW BSB: 082-345 Account No: 56100-9603 Merchant No: 3001397454 Account type: Club Account Phone: 13 22 65

Balances as at 31-Dec-04 Cheque account $16,032.60 Bank Term Deposit $30,000.00 Funds available $46,032.60 Net Profit on 2004 activities $6,002.55

98

99

PRRES Conference Awards

1. Best refereed paper (sponsored by PRRES)

2. New researcher award (sponsored by API: $1,000)

3. New presenter award (sponsored by RICS Foundation: $500)

4. Thought leadership in sustainability award (sponsored by RICS Foundation: $1,000)

5. Real estate brokerage award (sponsored by Real Estate Research Center, Cleveland State University: $US 500)

6. Best conference paper (sponsored by ARES Foundation (ARESF)): $US1,000)

Name of Award/Prize

Prize Sponsor Judges

Best refereed paper

Certificate PRRES Yu Shi Ming, Spike Bordell & Graeme Newell

email: Yu Shi Ming sdeyusm@nus.edu.sg API new property researcher award

$1,000 API API National Education Manager (chairperson), one member of API National Education Committee, Executive Director of PRRES

email: Sally Allen sally.allen@propertyinstitute.com.au New presenter award

$500 RICS Foundation

Panel comprising representatives of RICS Oceania and the PRRES.

email: Nick Hudson nhudson@rics.org.au Thought leadership in sustainability award

$1,000 RICS Foundation

Appointed by RICS Oceania

email: Nick Hudson nhudson@rics.org.au Real estate brokerage award (2003 – 2005)

$US 500 Real Estate Research Center,

Cleveland State University

(Peter Rossini, John Loh Angelo Karantonis)

email: Angelo Karantonis angleo.karantonis@uts.edu.au Best conference paper (2003 – 2005)

$US1,000 ARES Foundation (ARESF)

Yu Shi Ming, Bob Hargreaves, Graeme Newell

email: Yu Shi Ming sdeyusm@nus.edu.sg

100

Name of Award/Prize

Criteria – full info on website

Best refereed paper

New researcher award Applicants must be undertaking a research higher degree in property at an Australian university which also offers an API accredited property program at the date of award. Successful applicant will present their paper at the annual PRRES conference.

New presenter award For the best paper presented by a researcher who has not previously presented a paper at an IRES family conference.

The criteria for consideration are: • the researcher must be the main author of the paper

presented • the researcher must not have presented a paper at any

of the IRES family real estate society conferences previously.

The assessors will consider the following criteria: • clarity of expression • contribution to knowledge • awareness of existing work • robustness & relevance of conclusions &

recommendations

The paper will be submitted for publication in the Pacific Rim Property Journal.

Thought leadership in sustainability award

The paper presented at the 2003 Pacific Rim Real Estate Society Conference which makes the greatest contribution to exploring and examining the relationship between the operation of the property markets and the achievement of objectives of sustainable development.

A shortlist of papers will be proposed by the Pacific Rim Real Estate Society for assessment by the RICS Foundation, which will consider the following criteria: • the innovative application of new techniques • the appropriateness of the approach adopted • the awareness of the strengths and weaknesses of the

new approaches and techniques

The paper will be submitted for publication to the RICS Foundation research paper series.

Real estate brokerage award

Paper judged to be the “best empirical paper on real estate brokerage/agency” presented at the PRRES annual conference.

Best conference paper Paper judged to be the “best paper” presented at the PRRES annual conference.

101

http://www.iresnet.org

IRES Officers: President: Stanley McGreal Executive Director: Graeme Newell* University of Ulster, ERES University of Western Sydney, PRRES

President Elect: Joe Albert Treasurer: James Webb James Madison University, ARES Cleveland State University, ARES

Past President: Angelo Karantonis Director of Communication: Simon Stevenson University of Technology, Sydney, PRRES Cass Business, City University and University College Dublin, ERES

Secretary: Richard Reed Newsletter Editor: Sandy Bond University of Melbourne, PRRES University of Auckland, PRRES

IRES Directors: Mike Anikeef Martin Hoesli Eduardo Rottmann Terry Boyd Jinu Kim Kgobe Seate Stephen Brown Will McIntosh Art Schwart* Eamon D'Arcy Vincent Ma Atef Sharkawy Li Ling Hin Alex Phakathi Elaine Worzala*

IRES Affiliated Conferences The following is a list of conferences organised by the IRES sister societies. Further details of each is available at the websites of each sister society. Each year IRES specifically supports one of the sister society conferences. This year the society supported the 20th American Real Estate Society annual meeting that was held on Captiva Island, Florida in April. The 2005 supported conference will be the European Real Estate Society annual conference that is to be held in Dublin, Ireland between 15-18. 2005 April 13-16, American Real Estate Society Annual Conference, Sante Fe, New Mexico, USA.

June 15-18. European Real Estate Society Annual Conference, Dublin, Ireland.

July 18-21. Asian Real Estate Society Annual Conference, Sydney, Australia.

2006 January, Pacific-Rim Real Estate Society Annual Conference, Auckland, New Zealand.

April 19-22, American Real Estate Society Annual Conference, Key West, Florida, USA.

June 7-10. European Real Estate Society Annual Conference, Weimar, Germany.

Asian Real Estate Society Annual Conference, Vancouver, Canada.

2007 April, American Real Estate Society Annual Conference, San Francisco, California, USA.

June 27-30. European Real Estate Society Annual Conference, London, UK.

Further details are available at the IRES web site

*designates past president

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