Determinants of transaction activity in commercial real estate markets: evidence from European and Asia-Pacific countries

Variations in transaction activity between commercial real estate markets could have important implications for investment strategies and pricing. We consider why turnover rates, a common liquidity proxy, vary between countries and over time. We examine 38 countries in Europe and Asia-Pacific over the period 2000–2014. A conceptual framework is discussed prior to estimation of panel models that use turnover rates as the dependent variable. Our results indicate that the size and wealth of a country, the risk associated with that country and the performance of its commercial real estate market are significant factors that explain transaction activity. The quality of property rights is also an important factor.     

Forecasting real estate prices in Germany: the role of consumer confidence

The aim of the paper is to analyse the forecasting ability of various potential predictors for real estate prices in Germany over the short term. In the wake of the financial crisis, real estate prices in Germany started to increase markedly and still did so by the end of 2013. Despite a number of fundamental reasons, e.g. favourable lending conditions and Germany’s rapid return to economic growth, this provoked a discussion on whether consumers have too gloomy expectations regarding real estate prices in future. To capture the role of expectations for predicting real estate prices, in our forecast evaluation, we put special emphasis on various components of consumer confidence. Using single indicator models, we find that households’ perceived financial situations as well as their intended consumption/saving plans serve as valuable real estate price predictors.     

The role of task complexity in valuation errors analysis in a developing real estate market

The real estate valuation literature on sub-Saharan Africa (SSA) shows a growing concern over valuation errors, especially wide variation in valuations. Although there have been increased business and investment activities in the last decade or more in the region, these valuation errors pose a challenge to the maturity of SSA real estate markets as valuations promote transparency and support efficient operation of property markets. Based on archival and survey data, as well as insights from the task complexity discourse, this study examines the extent of variations in valuations and the effect of complex valuation tasks on the levels of the variations in Ghana. The study finds high levels of variations in valuation opinions of 33.6–63% for the archival and survey data, respectively. These levels of variations are substantially higher than have been reported in the literature for advanced markets suggesting that the concerns of valuation errors in SSA may be well grounded. Consistent with theory, it is further established that variations in valuation opinions may be more pronounced in comparatively more complex assignments. These findings have several implications including possible loss of confidence of market players in valuations, heightening of market uncertainty and increase in transaction costs.     

Time to completion in the Lagos commercial real estate market: an examination of institutional effects

This study explores how institutions affect the process of investment and the time it takes to buy and sell commercial property in Lagos, Nigeria. We isolate institutional factors that impact transaction efficiency and provide a snapshot of the process with average transaction times for the largest commercial real estate market in the most populous country in Africa. This study adopts a qualitative approach and relies on information collected from semi-structured interviews with 36 senior level individuals active in the Lagos commercial real estate market. Among our findings, we note the commercial real estate transaction process is divided into seven distinct stages and the average time to complete an acquisition across all stages (all property types) is 306 days. Title registration/perfection stage takes the longest time (around 132 days) and represents a significant risk to investors. We argue this is a consequence of imperfections in the formal institutions of title registration.     

An examination of the seasonality in industrial real estate construction

Summary

Though some work has been done to identify variables affecting seasonal variation in detached housing, almost nothing has been done to identify the factors affecting seasonal variations in industrial real estate construction. This paper attempts to identify some of these seasonal factors and their influence on industrial real estate construction. A Chow Test shows that there is a significant difference in the relationship between the amount of industrial real estate put in place and specific economic variables.     

Co-movement between the US and the securitised real estate markets of the Asian-Pacific economies

The novelty of this study is the use of continuous wavelet transform analysis of wavelet coherence, as well as its partial and multiple forms, to revisit the co-movements of Asian-Pacific public real estate markets among themselves and with the US, for a time span which covers the 12 January 1995–23 June 2016 period. Earlier research does not have satisfactory results because traditional methods average different relationships in time domain only. From the wavelet analysis, investors can extract the time-scale that most interests them. We find that the co-movement relationship across the real estate markets increases during the two major crisis period, as well as becomes stronger as the scale increases. Hong Kong and Singapore have the strongest time-scale co-movement relationship. Finally, the influence of domestic macroeconomic factors on real estate return co-movement appears to be greater at the long-term horizons than at the short-term horizons.     

大连市房地产开发资金来源与价格波动关系研究

基于大连市当前快速上涨的房价问题,根据大连市2004-2012年房地产开发资金来源与房地产价格数据,在利用ADF法对各个时间序列数据进行检验的基础上,运用Granger因果关系检验模型对大连市房地产开发资金来源变动与房价变动之间的因果关系进行分析,并运用灰色关联度方法对与房价有显著Granger因果关系的资金来源之间的关联度进行实证研究。研究结果显示:利用外资与房价的变化并没有直接的因果关系,大连市房地产是以其他资金来源为主,国内贷款和自筹资金对总的资金开发来源的影响处于同一水平。     

Predicting uncertainty: the impact of risk measurement on value of real estate portfolios

This paper presents a theoretical framework for an assessment and valuation of real estate assets and funds, based on modern stochastic discounted cash flow (DCF) models, which accurately captures the nature of related risks. We show that an accurate risk-adjusted valuation is particularly difficult for real estate investments, due to practical limits to diversification and difficulties in approximating total risk with systematic risk. We develop a risk assessment framework that includes idiosyncratic risk but focuses on insolvency risk related to a specific cash flow profile. We also present a methodology of rating this risk, using forecasts and simulations. We conclude that simulation techniques are a valuable tool in property risk assessment. Further, we show that cost of capital and value of assets depend on diversification of specific risks, investors can achieve in their portfolios.     

Formalisation of land rights: Some empirical evidence from Mali, Niger and South Africa

In this paper, we re-interpret three cases of research previously carried out in Mali, Niger and South Africa in light of the recent debate about formalisation of land rights that has emerged since the publication of Hernando de Soto's ‘Mystery of Capital’. The Malian case shows that lack of broad access to formalisation processes in high-pressure areas may play into the hands of those with power, information, and resources. The case also demonstrates that timing of formalisation efforts in urban areas characterised by rapid expansion is crucial in terms of distributive outcomes. The Nigerien case demonstrates how impending formalisation led to a scramble for land and increased conflicts in a context of institutional competition and limited administrative capacity. The South African case shows that the very process of surveying and registering rights may also change the rights themselves. Formalisation procedures may also amplify the tension between individual and communal rights, and boost privatisation.     

The role of local estate agents in the residential development process

Summary

The estate agent is usually seen and theorized as a gatekeeper responsible for directing certain people to certain parts of the city (Williams, 1976). However, estate agents are capable of performing many more functions other than simple house agency. This paper presents results from a series of structured interviews with housebuilders and estate agents carried out in Hertfordshire by a recent research project (Elson, 1982) which reveals the extent to which certain estate agents are involved with organizing land purchases for builders and negotiating development proposals through the planning system.     

Introduction to the special issue on the role of nonfarm income in poverty reduction: evidence from Asia and East Africa

In this special issue, we present seven studies that collectively attempt to investigate the role of non‐farm income in long‐term and short‐term poverty reduction in Asia and Africa. The first four studies out of the seven use long‐term panel data over two decades in the Philippines, Thailand, Bangladesh, and India. These studies show drastic increases in non‐farm income shares and corresponding declines in poverty levels over time, especially in the Philippines and Thailand. Education levels of household members and returns to education also increased significantly in these countries. The remaining three studies use cross‐sectional and short‐term panel data from Ethiopia, Kenya, and Uganda. These African studies show high proportions of poor households and low shares of non‐farm income that are somewhat comparable to the situation in the 1980s described in the Asian studies. Without the Green Revolution that provided stable farm income and potential financial resources to invest in children' education in Asia, it is not clear if African farm households can follow the Asian examples.     

Facing financialization: The divergent mutations of agricultural cooperatives in postapartheid South Africa

This paper analyses the transformation of the South African (former) grain cooperatives since 1994. These entities played a key role in the institutional architecture of the apartheid regime, ensuring the domination of white commercial farmers over the sector. Within the framework of the deregulation of the economy and the agricultural sector, such entities faced transformations of modern capitalism, especially the growing power of financial actors and markets. Although white commercial farmers still largely retain these inherited structures, these companies are presently being targeted more and more by private takeovers and/or private equity deals. Based on two specific empirical examples of private equity deals affecting South African grain cooperatives, this paper describes this financialization process in practice, in particular by analysing the interaction between financial and agricultural actors and the alliances on the ground that determine its “success.” In doing so, it details the different trajectories of these (former) cooperatives, highlighting the resilience, mutation, and extinction of commercial agriculture in South Africa.     

南非矿业在国民经济中的作用

南非矿产资源极其丰富,蕴藏着60多种矿藏,许多矿产储量、产量、出口量位居世界前列。南非矿业在世界矿业经济中占有重要的地位;矿业占南非国内生产总值的比重总体呈下降趋势,1994年以后,矿业在国内生产总值中的比重大致在6%-10%之间。矿产品是南非外汇收入的主要来源,矿业是创造就业的重要部门。     

Securing land and property rights in sub-Saharan Africa: The role of local institutions

Central governments have neither the capacity nor the local knowledge to implement a just, large-scale national land registration system. Support to local institutions to undertake intermediate forms of land registration has been shown to be far more effective in many places—although these need careful checks on abuses by powerful local (and external) interests, measures to limit disputes (too many of which can overwhelm any institution) and measures to ensure that the needs of those with the least power – typically women, migrants, tenants and pastoralists – are given due weight. These locally grounded systems can also provide the foundation for more formal registration systems, as needs and government capacities develop. Even if there are the funds and the institutional capacity to provide formal land title registration to everyone in ways that are fair and that recognize local diversity and complexity, and could manage disputes, this may often not be needed. For the vast majority of people, cheaper, simpler, locally grounded systems of rights registration can better meet their needs for secure tenure.     

More Than Socially Embedded: The Distinctive Character of 'Communal Tenure' Regimes in South Africa and its Implications for Land Policy

This article analyzes debates over tenure reform policy in post-apartheid South Africa, with a particular focus on the controversial Communal Land Rights Act of 2004. Land tenure systems in the 'communal areas' of South Africa are described as dynamic and evolving regimes within which a number of important commonalities and continuities over time are observable. Key underlying principles of pre-colonial land relations are identified, which informed the adaptation and modification of tenure regimes in the colonial era and under policies of segregation and apartheid, and continue to do so today. Exploring the policy implications of this analysis, the article suggests that alternative approaches to that embodied in the Communal Land Rights Act are required. The most appropriate approach is to make socially legitimate occupation and use rights, as they are currently held and practised, the point of departure for both their recognition in law and for the design of institutional frameworks for administering land.     

The Rise and Decline of Small‐Scale Sugarcane Production in South Africa: A Historical Perspective

South Africa's sugar industry has long been distinguished by its large number of small‐scale sugarcane growers (SSGs) farming on ‘communal’ land and its peculiar privately administered regulatory structure. In recent years, however, the numbers of small‐scale growers have declined precipitously. This paper argues that the relationship between the rise and fall of SSG production and the industry's governing regulatory structure is closer than usually appreciated. The emergence of SSG production in the late 1970s and the 1980s can be traced to industry‐subsidized initiatives, disguised as small‐scale credit, to bring commercially inalienable Bantustan land into cane production with strong miller oversight. From the late 1980s to 1990s, however, the elimination of these subsidies encouraged millers to subcontract support to farmers, while simultaneously instigating an increase in SSG numbers by removing restrictions on grower registration. Although low rainfall is a central proximal factor in the rapid decline of the SSGs in the 2000s, their rapid increase was structurally fragile.     

The impacts of information on returns from farming: evidence from a nationally representative farm survey in India

Using a nationally representative sample of farm households from India, this paper examines the impact of use of information on net farm incomes. Employing methodologies that mitigate potential biases in the estimation of the impact, the empirical results show that farmers who use information realize over 12% higher net returns per hectare. The paper also establishes a pecking order in access to information. Small farmers and those at the bottom of social hierarchy (based on caste) have access to fewer information sources, and they depend more on informal social networks and input dealers for their information needs. The larger farmers and those from upper caste rely relatively more on sources such as radio, television and newspaper.     

The Land Crisis in Zimbabwe Viewed from South of the Limpopo

Farm invasions in Zimbabwe have highlighted the pressing need for land reform throughout the southern African region. In South Africa, where the racial disparities in land holding are most severe, the events in Zimbabwe have raised the temperature of the land debate and led to calls for land invasions by some rural groups. The ANC-led government, facing criticism from both right and left for the slow pace of reform, has veered between strident defence of private property rights and threats to expropriate white farms. White farming interests have reacted differentially, with some progressive voices joining the calls for an accelerated reform programme. Current land reform policy in South Africa seems set to advance the interests of emerging black commercial farmers and tribal chiefs at the expense of the rural poor and landless.     

Socio‐economic differentiation from a class‐analytic perspective: The case of smallholder tree‐crop farmers in Limpopo,South Africa

South African agrarian policy aims to integrate smallholder tree‐crop farmers into high‐end value chains with growth and employment potential, generally neglecting socio‐economic differentiation amongst them. This paper aims to analyse socio‐economic differentiation amongst tree‐crop farmers in Vhembe District, Limpopo, using a class‐based analysis based on livelihood diversification and accumulation. Cluster analysis of survey data and semi‐structured interviews reveals that most tree‐crop farmers engage in petty commodity production, internally differentiated by their combination of income sources and livelihood strategies. Farmers' ability to engage in accumulation and upward class mobility is generally severely constrained by limited access to capital. Agricultural diversification offers livelihood potential but limited possibility for accumulation, whereas salaried nonfarm work offers more promising prospects for accumulation but limited livelihood opportunities. A minority demonstrated characteristics of small‐scale capitalist farmers, internally differentiated by their reliance on salaried employment or agricultural production. The findings challenge the notion of an undifferentiated class of market‐oriented smallholders.