Social Production of Desirable Space: An Exploration of the Practice and Role of Property Agents in the UK Commercial Property Market

Purpose The purpose of this paper is to assess the duration of the UK commercial property cycles, their volatility and persistence to gauge future market direction. Design/methodology/approach The study employs a novel approach to dissect cycles in a form of a three-step algorithm. First, the Hodrick-Prescott de-trends the selected variables. Second, volatility (measured by the variance) screens periods of atypical fluctuations in the series. Finally, the series is regressed against its past values to assess the level of persistence. The sequential steps screen the length of the cycles in UK commercial property market to facilitate interpretation. Findings The estimates suggest that UK commercial property market follows an eight-year cycle. Combined modelling results indicate that the current market trend is likely to change over the coming year. The modelling suggests increasing probability of a market correction in late 2016/early 2017. Practical implications This updated appreciation of the UK commercial property cycle duration allows for better market timing and investment decision making. Originality/value The paper adds additional evidence on the contested issue of UK commercial property cycle duration.

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An Attribution of the Return on the UK Commercial Property Market

10.15396/eres1998_156 ◽

1998 ◽

Keyword(s):

Property Market ◽

Commercial Property ◽

The Uk

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Globalization, integration and commercial property. Evidence from the UK

Journal of Property Investment and Finance ◽

10.1108/14635789910252774 ◽

1999 ◽

Vol 17 (1) ◽

pp. 8-26 ◽

Cited By ~ 11

Author(s):

Patrick McAllister

Keyword(s):

Asset Allocation ◽

Investment Strategies ◽

Information Costs ◽

Property Market ◽

Diversification Strategy ◽

Institutional Investment ◽

Commercial Property ◽

Important Barrier ◽

The Uk ◽

Allocation Decisions

This paper analyses trends in direct international property investment by British investing institutions in the 1980s and 1990s. Although it is well established that there is home country bias in all investment sectors, evidence is presented which suggests that it is more pronounced in the direct property sector. The main focus is on barriers to international property investment and, therefore, potential sources of segmentation in the property sector. The research addresses a number of issues relating to levels of international property investment, the linkages between the nature of the core business and investment strategies and the relative importance of high diversification costs. This is carried out by an analysis of the most recent data on British institutional investment trends and by a survey questionnaire of British property professionals involved in asset allocation decisions for the investing institutions. The results indicate that: information costs are the most important barrier to international direct property investment, the high cost of executing a global diversification strategy inhibits international property investment, and institutions who have clients and see business opportunities in international centres are more likely to be interested in international property investment opportunities. The data on asset allocation trends support the view that the property market is significantly less integrated than the other securities markets.

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The significance and performance of US commercial property in a post-GFC context

Journal of Property Investment and Finance ◽

10.1108/jpif-02-2017-0018 ◽

2017 ◽

Vol 35 (6) ◽

pp. 575-588 ◽

Cited By ~ 6

Author(s):

Muhammad Jufri Marzuki ◽

Graeme Newell

Keyword(s):

Institutional Investors ◽

Investment Strategy ◽

Portfolio Diversification ◽

Investment Opportunity ◽

Property Market ◽

Content Type ◽

Commercial Property ◽

The Us ◽

Asset Portfolio

Purpose US commercial property is an important investment opportunity for institutional investors. The purpose of this paper is to assess the significance, risk-adjusted performance and portfolio diversification benefits of US commercial property (both direct property and REITs) in a mixed-asset portfolio over 1994-2016. The 2009-2016 post-GFC recovery of US commercial property is specifically highlighted. Design/methodology/approach Using quarterly total returns, the risk-adjusted performance and portfolio diversification benefits of US commercial property over 1994-2016 are assessed. Efficient frontier and asset allocation diagrams are used to assess the role of US commercial property in a mixed-asset portfolio. Sub-period analysis over 2009-2016 is used to assess the post-GFC recovery of US commercial property. Findings US commercial property delivered mixed results over 1994-2016; direct property gave the best risk-adjusted performance, while US-REITs performance was hampered by high volatility. Since the GFC, both forms of US commercial property have delivered stronger risk-adjusted returns with improved diversification benefits, especially in the context of an inter-property investment strategy. However, US-REITs did not improve their diversification benefits with the stock market over this period. This sees US commercial property as an important component in the US mixed-asset portfolio in the post-GFC environment, with a much stronger role exhibited by US direct property in the post-GFC mixed-asset portfolio. Practical implications US commercial property emerged from the GFC as a stronger and more robust property investment opportunity, with both the direct property and US-REITs fully recovered to their pre-GFC performance level in 2012. The results highlight the major role of US commercial property in a US mixed-asset portfolio in the post-GFC context. The superior risk-adjusted performance of US commercial property sees both direct and listed US commercial property contributing significantly to the mixed-asset portfolio throughout the entire risk-return spectrum, particularly direct property. Given the increased capital flows into the US property market since the GFC, this is particularly important as many investors, both local and international, use direct and listed property investment opportunities as conduits for their significant US commercial property exposure. Originality/value This paper is the first published empirical research analysis that specifically assessed the post-GFC performance and role of US commercial property in a mixed-asset portfolio. This research enables empirically validated, more informed and practical property investment decision making by institutional investors regarding the strategic role of US commercial property in a mixed-asset portfolio in a post-GFC context.

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An analysis of valuation variation in the UK commercial property market

Journal of Property Valuation and Investment ◽

10.1108/14635789610154271 ◽

1996 ◽

Vol 14 (5) ◽

pp. 34-47 ◽

Cited By ~ 20

Author(s):

Alastair Adair ◽

Norman Hutchison ◽

Bryan MacGregor ◽

Stanley McGreal ◽

Nanda Nanthakumaran

Keyword(s):

Property Market ◽

Commercial Property ◽

The Uk

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Commercial leases in the UK regions: business as usual?

Journal of Corporate Real Estate ◽

10.1108/jcre-12-2015-0048 ◽

2016 ◽

Vol 18 (4) ◽

pp. 227-253

Author(s):

Danielle McCluskey ◽

Lay Cheng Lim ◽

Michael McCord ◽

Peadar Thomas Davis

Keyword(s):

Past Research ◽

Negotiation Process ◽

Specific Reference ◽

Survey Analysis ◽

Property Market ◽

Content Type ◽

Commercial Property ◽

Depth Analysis ◽

The Uk ◽

Tenant Relationship

Purpose The purpose of this paper is to analyse the changing nature of commercial leases with specific reference to the landlord and tenant relationship, lease lengths and incentivisation in the post-recessionary UK property market. Design/methodology/approach The research applies data analysis utilising the Estates Gazette Interactive database coupled with survey analysis conducted across three UK cities to investigate and compare the changing nature of the commercial property leasing market and the landlord and tenant relationship. Findings The empirical analysis highlights that recessionary conditions prevalent in the market from the 2007 global crisis has caused a reassessment of lease structures, leading to shorter lease terms and increased use of incentives, as tenants have been empowered to negotiate more flexible leases due to their stronger market position. Originality/value This paper builds upon previous research conducted back in 2005, investigating commercial leases in the market up-cycle. The recent volatility in the commercial property sector requires fresh insights and in-depth analysis of lease patterns, length and covenant strength, which is fundamental for investor decision-making. In addition, past research has tended to consider solely landlord or occupier perspectives, whereas this research offers new insight into the landlord–tenant lease negotiation process.

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