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Purpose: Environment, social, governance (ESG) has taken on increased importance in real estate investment in recent years, with benchmarking ESG being critically important for more informed real estate investment decision-making. Using 60 stakeholder interviews with senior real estate executives, this paper examines the strategic issues regarding benchmarking ESG in real estate investment; specifically, identifying areas going forward where ESG benchmarks need to be improved. This includes the issues of granularity, climate resilience and climate risk, as well as an increased focus on outcomes and performance, and using best practice procedures in delivering ESG in real estate investment. Design/methodology/approach: In total, 60 stakeholder interviews were conducted with key real estate players globally to assess the use of ESG benchmarking in real estate investment at various levels (asset/fund-level, listed real estate, delivery, reporting and internal benchmarking), across regions and across different types of real estate investment players (real estate fund manager, real estate investment trust (REIT), institutional investor and real estate advisor). This enabled key strategic insights to be identified for improved ESG benchmarking practices in real estate investment going forward. Findings: There was clear evidence of the need for improved benchmarks for ESG in real estate investment. More focus was needed on performance, outcomes and impacts, with a stronger focus on granularity around the issues of climate resilience and climate risk. Improvements in Global Real Estate Sustainability Benchmark (GRESB), as well as increased attention to Task Force for Climate-Related Financial Disclosures (TCFD) were seen as important initiatives. Clear differences were also seen in the use of these ESG benchmarks on a regional basis; with Australia and Europe seen as the world leaders. These strategic stakeholder insights regarding ESG saw the development of best practice guidelines for the more effective delivery of ESG benchmarks for more informed real estate investment decision-making, as well as a series of recommendations for improving ESG benchmarking in real estate investment. Practical implications: ESG benchmarking is a critical area of real estate investment decision-making today. By utilising stakeholder interviews, the strategic insights from key players in the real estate investment space are identified. In particular, this paper identifies how the current ESG benchmarks used in real estate investment need to be improved for a more critical assessment of climate resilience and climate risk issues at a more granular level. This enables the identification and delivery of more effective ESG best practice procedures and recommendations for improving ESG benchmarking in real estate investment going forward. These issues have clear impacts on ongoing capital raisings by investors, where benchmarking ESG is an increasingly important factor for real estate investors, tenants and real estate asset managers. Originality/value: Based on the stakeholder interview responses, this paper has identified key areas for improvement in the current benchmarks for ESG in real estate investment. It is anticipated that an increased focus on technology and the availability of more granular data, coupled with user demand, will see more focus on assessing performance, outcomes and impacts at a real estate asset-specific level and produce a fuller range of ESG metrics, more focused on climate resilience and climate risk. This will see a more effective range of ESG benchmarks for more informed real estate investment decision-making. [ABSTRACT FROM AUTHOR]

Purpose: The research investigates valuers' understanding of the value of sustainability in property and its' consideration in valuation practice in Australia. This paper explores valuers' perceptions of the relationships between sustainability and market values, sustainability and valuation variables, and the value influence of industry sustainability certification schemes. Further, this paper tracks prevalence of certified buildings in Australian commercial markets and the evolution of valuers' knowledge of sustainability certifications used in Australia. Design/methodology/approach: This paper reports on the next rendition of a longitudinal study examining valuers' practice in Australia. This research explores the evolution of Australian valuers' perception and knowledge of sustainability in valuation practice. The survey data has been periodically collected from practising valuers from 2007 to 2021. The survey questions investigate valuers' knowledge development, understanding, reporting and consideration of the relationship between sustainability and market value. Findings: The results have identified the evolution of the influence of normative research on valuers' perceptions of the relationship between sustainability and value; with a clearer understanding emerging over time of where the value relationships are identified in valuation variables. Greater alignment between empirical Australian studies and valuers' perceptions of the influence of sustainability ratings on value, demonstrate the value connection for higher rated buildings under NABERS (energy rating) and Green Star. Whilst only 41% of the study's participants are including sustainability in their valuation reports, they include a higher level of commentary on building descriptions and initiatives, building ratings, and reporting of owner and tenant objectives, than in previous studies. Knowledge development relating to sustainability certification tool, NABERS was identified. This is likely linked to the introduction of mandatory disclosure legislation. This has also led to increased awareness and valuers' knowledge of the differences between the two key rating tools used in Australia. Research limitations/implications: The research has several limitations: firstly, recruitment of valuers and the number of valuers' responses has varied over time; secondly, due to collection methods respondents have a greater likelihood of having an interest in and knowledge of sustainability creating potential for positive bias; thirdly, respondents may have responded to the survey in different years, but due to anonymity there has been no ability to track this. The results provide insights into the Australian valuation profession but may not be fully representative of the profession overall in Australia. Practical implications: The broader agenda of net zero, climate change, mitigation and carbon requirements, whether driven by market forces or government legislation, are generating changes in property markets as investors' reconsider their positions and model the implications of carbon emissions on their bottom lines. Introductions of policy and legislation over time in the Australian context have led to changes in valuation practice and increasing consideration of energy efficiency and ratings in the valuation of assets. However, further guidance and research still is required in Australia to assist in the knowledge development of valuers, and their ability to consider the emerging effects of sustainability, net zero and other market driven objectives including legislation, and how these may affect or influence their evaluation of market evidence and thus property values. Originality/value: The research has tracked valuers' understanding, knowledge, and consideration of sustainability and energy efficiency in valuation practice since 2007. In that time the research has found that, as the market has evolved and more rated buildings are built (or retrofitted), so too has valuers' knowledge and consideration in valuation practices evolved. Valuers are more engaged with industry rating tools such as NABERS. This suggests that the Australian mandatory disclosure policies have contributed to changes in the market, which are then interpreted by valuers and reflected in their perceptions and consideration of energy ratings in valuation practice. [ABSTRACT FROM AUTHOR]

Purpose: Environment, social and governance (ESG) has taken on increased importance in recent years. This paper assesses the increasing importance of the social ("S") dimension of ESG in the real estate space and the strategies being used by the leading real estate players to deliver this important aspect of ESG. This includes gender equality, cultural diversity, staff wellness, supply chain management and community engagement. It also indicates the need for an increased level of metrics in the S space for the effective delivery and external validation of the S dimension into real estate investment decision-making. Design/methodology/approach: This research is based on a thorough understanding of the ESG environment in the real estate industry by the author. Best practice examples regarding the S dimension are given from the ESG/sustainability reports from real estate players in Australia who are leaders in the ESG space. Findings: Excellent examples of the delivery of the S dimension are reported from the ESG/sustainability reports from the real estate industry. Whilst there is an increasing range of S information being reported in the real estate industry, there is a need for more metrics to effectively report this S information to indicate its key role in seeing the S dimension being delivered for the fuller integration of ESG at all levels of the real estate industry. The external validation of this S information will also take on increased importance going forward. Practical implications: With ESG becoming a critical issue in the real estate sector, issues involved in the S space will take on increased significance. This is critical, as the elements of the S dimension such as gender equality, cultural diversity, staff wellness, community engagement and supply chain management are important aspects for an effectively functioning real estate industry. More metrics in the S space will be an important development to further expand the delivery and external validation of the S space of ESG. Originality/value: This paper is the first paper to specifically address the need for more focus on delivering the S dimension of ESG in the real estate industry, highlighted by best practice examples from the real estate industry in Australia. This is a key issue for the real estate industry going forward at all levels to facilitate more effective real estate investment decision-making. [ABSTRACT FROM AUTHOR]

Purpose: The paper is motivated by the paucity of empirical research on the determinants of capitalisation rates/yield in the commercial property market. Compared to property price determinants, the capitalisation rate has received significantly less attention. This is somewhat surprising given that the capitalisation rate is a more insightful indicator for investors on commercial property market performance than merely price changes or trends. The capitalisation rate, measured as the ratio of net operating income to the property's capital value, captures the asset's overall ability to generate income which is crucial for investors who typically invest in property for their income-generating capacity. The purpose of this paper is to address these issues. Design/methodology/approach: To evaluate the determinants of capitalisation rates, time series analysis was used. The data capture performance in the Australian commercial property market between 2005 and 2018. All macroeconomic and financial data are freely available from official sources such as the Australian Bureau of Statistics and the nation's central bank. Methodology wise, given the problematic nature of the data such as a mixed order of integration and the possibility of cointegration amongst some of the I (1) variables, the autoregressive distributed lag model was selected given its flexibility and relative lack of assumptions. Findings: Bond rates, market risk premiums, stock market excess returns and other macroeconomic variables were found to drive capitalisation rates of Australian commercial properties. A 1% increase in the bond rate results in approximately 0.3–2.4% increase in capitalisation rates depending on the sub-market. Further, a 1% increase in excess market returns results in a 0.01–0.02% increase in capitalisation rates. Regarding risk premiums, a 100 basis point increase in the BBB spread results in approximately 0.92–1.27% reduction in cap rates in certain markets. Practical implications: Asset managers will find these results useful in asset allocation strategies. Commercial properties offer attractive investment qualities such as yield stability in periods of economic uncertainty while allowing for the possibility of capital growth through appreciation of the underlying asset. By understanding the factors that affect the capitalisation rate, practitioners may predict emerging trends and identify threats to portfolio return and stability. This allows better integration of commercial property in the construction of portfolios that remain robust in a variety of market conditions. Originality/value: The contribution to literature is significant given the lack of similar studies in the Australian market. The performance of real estate assets using cap rates as a comparative measure to equities and bonds influences decisions in asset allocation strategies. It provides crucial information for investors to estimate the performance of commercial property. This research supports the notion that both space and capital market indicators jointly affect capitalisation rates. The findings expand the knowledge base relating to commercial properties and validate the assessments of investors, developers and valuers who utilise yield as a performance benchmark for asset allocation strategies. [ABSTRACT FROM AUTHOR]

Purpose: The research investigates valuers' understanding of the value of sustainability in property and its consideration in valuation practice. The paper explores the extant research that has examined valuers' perceptions of the relationships between sustainability and market values, sustainability measurement, value relationships and the standards and guidelines released industry bodies. Design/methodology/approach: This paper, part 1 of 2, reports the current state of play of valuation research in the consideration of sustainability in valuation practice and the role of industry bodies in the guidance regarding sustainability consideration in valuation. The second paper provides the next rendition of a longitudinal study examining valuation practice in Australia. Findings: The paper provides an overview of the evolution of the consideration of sustainability in property over the past two decades. Providing insights of how the property sector, its markets and valuation professionals have responded to answering the questions of: what is the value of sustainability? Whilst earlier publications both industry and academic publications alike focussed on the normative aspects of how sustainability should affect value, more recent research starts to ascertain the implications of sustainability on property values. Despite industry bodies providing information, education, guidelines and standards, it would seem that valuers in their practice are still grappling with the challenges of understanding the rapidly evolving area of sustainability, environmental, social and governance and climate risks in valuations. Research limitations/implications: The paper does not present as an authority on all research that has been conducted to date, it provides an overview of the evolving nature of both academic research and industry consideration of sustainability, particularly in a valuation context. This provides the background for Part 2. Practical implications: The broader agenda of net zero, climate change, mitigation and carbon requirements, whether driven by market forces or government legislation, are generating substantial changes in property markets, as investors reconsider their positions and model the implications of carbon emissions on their bottom lines. Government policies appear to have a considerable influence over market behaviours, which filters through to stakeholder decision-making. However, despite government policies, clear market signalling and industry body guidance on valuing sustainability, the content and depth of sustainability consideration in valuation are still limited. Originality/value: The paper provides an overview of the last decade of research into the value of sustainability and the evolving nature of information and guidance for valuers to identify, evaluate and consider sustainability in valuation. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to investigate the accuracy of Australian Real Estate Investment Trust (A-REIT) initial public offering (IPO) dividend forecasts between 1994 and 2016. Design/methodology/approach: This study compares the dividend forecasts of A-REIT IPOs for the first dividend forecast period in the prospectus, with the actual dividend declared for that forecast period. As well as simple descriptive summary measures, this study also employs an exact logistic regression approach to examine the factors that might influence the IPOs achieving or exceeding the dividend forecast. Findings: The study identifies that the dividends declared, on average, were greater than the dividend forecast and that more than nine out of ten of the IPOs listed after 1999 achieved or exceeded their prospectus forecast. In addition the authors observe positive mean forecast errors, suggesting dividend forecasts in A-REIT IPOs, are cautiously biased. This is in contrast to the industrial company data reported in Brown et al. (2000) which suggest dividend forecasts are optimistically biased. The study also finds the A-REIT IPOs that did not forecast a dividend, generally did not pay a dividend. Practical implications: The results will inform dividend seeking institutional and retail investors of the investment opportunities in A-REIT IPOs. Originality/value: This paper adds to the discussion of the relative predictability of dividends of A-REIT IPOs compared to industrial company IPOs. [ABSTRACT FROM AUTHOR]

Purpose The relationship between sustainability and value in property has been a major area of investigation over the past decade. However, in spite of the extant literature and research, the connections made by valuers in practice of the value relationship are still unresolved. The purpose of this paper is to investigate, in the Australian context, valuers’ perception of the relationship between sustainability and value; and their experience and knowledge of sustainability in valuation practice.Design/methodology/approach The research investigates valuers’ perception and knowledge of sustainability and its inclusion in valuation practice in Australia. The approach uses a longitudinal survey of valuers from 2007 to 2015 tracking valuers’ knowledge, understanding, inclusion of sustainability reporting and the perceptions of the relationship between sustainability and market value.Findings This paper presents findings from a longitudinal survey that has been conducted in Australia since 2007, identifying changes between 2007, the height of the property market and sustainability engagement prior to the global financial crisis, and the subsequent years to 2015. The growth of sustainability in the property market is significant, however, valuers’ knowledge and reporting on sustainability is not demonstrating the same level of development. As a result, this is inhibiting valuers reporting on sustainability and has implications for practice and treatment of market values.Practical implications This research highlights the need to examine how to assist valuers to more rapidly develop knowledge and experience to reflect the implications of change in practice. Current approaches being developed in the UK and Europe, like the introduction of RenoValue professional development programs and guidance documents, to assist valuers to develop their knowledge needs to be implemented in the Australian environment as current approaches are inadequate, and steps need to be taken in order to assist their development of knowledge and experience as the market demonstrates growth and acceptance of sustainability. This research identifies the need to re-examine how professional development is undertaken and knowledge developed by those practicing in the profession in Australia.Originality/value This longitudinal survey is the only research that has spanned a substantial period of time attempting to ascertain valuers’ perception of the relationship between sustainability and value; and attempts to track the knowledge development of valuers in the context of sustainability. The findings identify how the market is developing and adhering to a product model development theory, however, also identifies more fundamental issues and implications for valuation praxis, in the development of knowledge and ability of valuers to adapt to change and reflect these valuations. [ABSTRACT FROM AUTHOR]

Purpose - The purpose of this paper is to develop a General Systems Theory (GST) risk management framework and conducts a preliminary investigation into its potential benefits. Design/methodology/approach - A risk management framework with four domains is developed by applying GST to property. Risk management in five listed Australian Real Estate Investment Trusts (A-REITs) is benchmarked against the GST ideal using public web-sites information. A-REIT volatility-adjusted returns are calculated using Treynor ratios for the year to May 2010. The link between risk management score and entity performance is then investigated. Findings - The GST framework directs attention to risks involving surveillance, capacity and controls. However, as predicted by the Efficient Market Hypothesis (EMH), the study found no link between assessed risk management and volatility-moderated annual returns to May 2010. Research limitations/implications - The risk scoring was predicated on publicly available data, with limited analysis of financial statements. The sample size was restricted. Practical implications - Successful entities are well governed, focused and innovative. Robust finances allow exploitation of emerging opportunity when business conditions become favourable. Planning and environmental management capabilities are essential. Originality/value - The paper makes conceptual and practical contributions. Conceptually, it develops a GST risk management framework. Practically, albeit for a handful of entities, the paper illustrates how the GST approach to risk management could be effectively deployed. The paper also outlines a pathway for more refined risk management research. [ABSTRACT FROM AUTHOR]

Purpose: Real estate is an asset that is traded in highly segmented, illiquid and informationally inefficient local markets. A short sale in real estate is almost infeasible and therefore impedes informed rational arbitrageurs to trade against mispricing. Thus, real estate returns are prone to sentiment-driven behaviours. Will the impacts on asset returns be identical for different types of sentiment? Design/methodology/approach: This study argues that not all sentiment effects are created equal. Using the bounds test of the autoregressive distributed lag (ARDL) models, this paper examines how occupier sentiment versus investor sentiment contributes to the short-run and long-run dynamics of commercial real estate returns in Australia. Findings: The empirical evidence suggests that investor sentiment and occupier sentiment influence return asymmetrically after macroeconomic conditions are controlled for. Practical implications: The sectoral analysis further reveals that sector-specific sentiment plays a significant role in explaining commercial real estate returns. Furthermore, notable improvement is found in producing more accurate prediction in returns, given that measures of occupier and investor sentiment are appropriately specified in the forecast. Originality/value: This study is novel in the sense that it acknowledges the impacts of occupiers' and investors' sentiment may be fundamentally different. The unique innovation and contribution of this study to behavioural finance literature are based on a new dataset from the Royal Institute of Chartered Surveyors which includes a survey-based measure of investor sentiment and occupier sentiment. [ABSTRACT FROM AUTHOR]

Purpose – A variety of papers have analyzed the underpricing of REIT IPOs or property company IPOs. The purpose of this paper is to compare the two sectors and examines differences in the underpricing of the two types of IPOs. Design/methodology/approach – An OLS regression is used to identify factors influencing the underpricing of A-REIT and property company IPOs from 1994 until 2014. Findings – This study finds that A-REIT IPOs have a significantly lower underpricing on average than Australian property company IPOs. The time taken to list appears to influence the underpricing of both A-REIT IPOs and property company IPOs, in that issues that are filled more quickly have higher underpricing but with the magnitude of the impact being less for A-REITs. The sentiment toward the stock market also appears to impact on the underpricing of A-REIT and property company IPOs again with the magnitude of the impact being less for A-REITs. Practical implications – The paper provides information to new A-REIT and property company issuers, underwriters and investors. Originality/value – The study is the first to compare and examine the differences in the underpricing of both REITs and property companies in the one country over the same time period. [ABSTRACT FROM AUTHOR]

Purpose -- Direct costs of Australian Real Estate Investment Trust (A-REIT) initial public offerings (IPOs) were last reported in the literature using data to 2004. Much has occurred since then. The purpose of this paper is to introduce and include the A-REIT IPOs over the last ten years and examine the cost and the factors influencing the percentage underwriting and percentage total direct costs by A-REITs IPOs. The study also investigates specifically whether the utilization of an underwriter (who guarantees the success of the capital raising) rather than a stockbroker (who does not guarantee such success) costs significantly more. Design/methodology/approach -- The study examines 87 A-REIT IPOs from January 1994 until December 2013. An OLS regression is performed to identify significant influencing factors on percentage underwriting costs and percentage total direct capital raising costs. Findings -- The study finds that larger capital raisings and those with large investor or institutional involvement identified in the prospectus are significant in reducing underwriting costs. The study does not find that underwritten IPOs are significantly more expensive (or cheaper) than those not underwritten. Additionally, the size of the issue, whether the firm offers stapled securities (is internally managed) and has higher net asset to issue price characteristics reduces the total cost of underwritten IPOs. Practical implications -- The paper provides information to new A-REIT issuers, underwriters and advisors broadly on new issue costs and on factors influencing the IPO issue costs. Originality/value -- The study is the first to examine the costs of A-REIT IPO capital raising data in the years prior to and following the recent global financial crisis period. Paper type Research paper [ABSTRACT FROM AUTHOR]

Purpose – Green office buildings have recently taken on increased significance in institutional property portfolios in Australia and globally. The key issue from an institutional investor perspective is the assessment of whether green office buildings add value. Using an extensive portfolio of green office buildings, the purpose of this paper is to empirically assess the level of energy rating premiums in the property performance of green office buildings in Australia. Design/methodology/approach – Using a portfolio of over 200 green office buildings in Australia benchmarked against a comparable portfolio of non-green office buildings, the level of energy rating premiums in the property performance of green office buildings in Australia is empirically evaluated. Hedonic regression analysis is used to account for differences between specific office buildings and to explicitly identify the “pure” green effect in identifying the level of energy rating premiums in several commercial property performance characteristics (e.g. office value, rent). Findings – The empirical results show the added-value premium of the 5-star National Australian Built Environment Rating Scheme (NABERS) energy rating scheme and the Green Star scheme in the property performance of green office buildings in Australia, including office values and rents. Energy rating premiums for green office buildings are evident at the top energy ratings and energy rating discounts at the lower energy ratings. The added-value “top-end” premium of the 5-star vs 4-star NABERS energy rating category is clearly identified for the various property performance parameters, including office values and rents. Practical implications – This paper empirically determines the presence of energy rating premiums at the top energy ratings in the performance of green office buildings, as well as energy rating discounts at the lower energy ratings. This clearly highlights the added value dimension of energy efficiency in green office buildings and the need for the major office property investors to prioritise the highest energy rating to facilitate additional property performance premiums. This will also see green office buildings become the norm as the market benchmark rather than non-green office buildings. Social implications – This paper highlights energy performance premiums for green office buildings. This fits into the context of sustainability in the property industry and the broader aspects of corporate social responsibility in the property industry. Originality/value – This paper is the first published property research analysis on the detailed determination of energy rating premiums across the energy rating spectrum for green office buildings in Australia. Given the increased focus on energy efficiency and green office buildings, this research enables empirically validated and practical property investment decisions by office property investors regarding the importance of energy efficiency and green office buildings, and the priority to achieve the highest energy rating to maximise property performance premiums in office values and rents. [ABSTRACT FROM AUTHOR]

Purpose Property market models have the overriding aim of predicting reasonable estimates of key dependent variables (demand, supply, rent, yield, vacancy and net absorption rate). These can be based on independent drivers of core property and economic activities. Accurate predictions can only be conducted when ample quantitative data are available with fewer uncertainties. However, a broad-fronted social, technical and ecological evolution can throw up sudden, unexpected shocks that result in the econometric outputs sceptical to unknown risk factors. Therefore, the purpose of this paper is to evaluate Australian office market forecast accuracy and to determine whether the forecasts capture extreme downside risk events.Design/methodology/approach This study follows a quantitative research approach, using secondary data analysis to test the accuracy of economists’ forecasts. The forecast accuracy evaluation encompasses the measurement of economic and property forecasts under the following phases: testing for the forecast accuracy; analysing outliers of forecast errors; and testing of causal relationships. Forecast accuracy measurement incorporates scale independent metrics that include Theil’s U values (U1 and U2) and mean absolute scaled error. Inter-quartile range rule is used for the outlier analysis. To find the causal relationships among variables, the time series regression methodology is utilised, including multiple regression analysis and Granger causality developed under the vector auto regression (VAR).Findings The credibility of economic and property forecasts was questionable around the period of the Global Financial Crisis (GFC); a significant man-made Black Swan event. The forecast accuracy measurement highlighted rental movement and net absorption forecast errors as the critical inaccurate predictions. These key property variables are explained by historic information and independent economic variables. However, these do not explain the changes when error time series of the variables were concerned. According to VAR estimates, all property variables have a significant causality derived from the lagged values of Australian S&P/ASX 200 (ASX) forecast errors. Therefore, lagged ASX forecast errors could be used as a warning signal to adjust property forecasts.Research limitations/implications Secondary data were obtained from the premier Australian property markets: Canberra, Sydney, Brisbane, Adelaide, Melbourne and Perth. A limited ten-year timeframe (2001-2011) was used in the ex-post analysis for the comparison of economic and property variables. Forecasts ceased from 2011, due to the discontinuity of the Australian Financial Review quarterly survey of economists; the main source of economic forecast data.Practical implications The research strongly recommended naïve forecasts for the property variables, as an input determinant in each office market forecast equation. Further, lagged forecast errors in the ASX could be used as a warning signal for the successive property forecast errors. Hence, data adjustments can be made to ensure the accuracy of the Australian office market forecasts.Originality/value The paper highlights the critical inaccuracy of the Australian office market forecasts around the GFC. In an environment of increasing incidence of unknown events, these types of risk events should not be dismissed as statistical outliers in real estate modelling. As a proactive strategy to improve office market forecasts, lagged ASX forecast errors could be used as a warning signal. This causality was mirrored in rental movements and total vacancy forecast errors. The close interdependency between rents and vacancy rates in the forecasting process and the volatility in rental cash flows reflects on direct property investment and subsequently on the ASX, is therefore justified. [ABSTRACT FROM AUTHOR]

Purpose - This paper aims to assess all compulsory land acquisition court decisions in Australia over 1985-2009 to provide a risk assessment and compensation analysis involved in proceeding to court for compulsory land acquisition cases. Design/methodology/approach - Using the AustLII legal database, every publicly available compulsory land acquisition court case decision in Australia over 1985-2009 is assessed. These 58 court cases are assessed for claim, offer and judgment value. Findings - A total of 91.4 percent of compulsory land acquisition court cases over 1985-2009 were found to be successful in achieving a judgment value of at least that of the offer. The median judgment value for successful cases was 60 percent higher than the offer value, while for unsuccessful cases it was 68 percent lower than the offer value. Successful smaller judgments (<$2 million) generated more upside compensation (median of 66 percent) than larger judgments (>$2 million) (median 41 percent upside compensation). Appealed cases were found to be only 28.6 percent successful, with only a maximum of 5.6 percent additional compensation achieved. Practical implications - This paper provides a rigorous empirical risk assessment and compensation analysis for compulsory land acquisition court cases in Australia over the last 25 years. This provides an effective tool for dispossessed property owners, statutory acquirers and their professional legal and valuation advisors for more informed compulsory land acquisition court case decision making. Originality/value - Using all compulsory land acquisition court decisions in Australia over the last 25 years, this paper is the first attempt internationally to rigorously and empirically conduct a risk assessment and compensation analysis involved with proceeding to court for compulsory land acquisition cases. Given the significance of the compulsory land acquisition process, this empirically validated research enables a more informed and critical understanding of the risk factors and compensation outcomes attached to the compulsory land acquisition court case judgment process. [ABSTRACT FROM AUTHOR]

Purpose - This paper aims to review property and valuation education within the university context, using the experience of program re-development at RMIT University, Melbourne, Australia, as a case study. Design/methodology/approach - The paper utilises a literature review, comparing and contrasting the program renewal process within the university to experiences elsewhere and their inherent values. In critically examining some of the difficulties found within the program renewal process, issues symptomatic of the wider valuation profession and tertiary education system have been revealed. It provides the genesis of a wider study linking tertiary education and the valuation profession''s needs in the mid-term. Findings - Valuation education is often subsumed within a generalist property curriculum. As part of their resource allocation models universities are now paying close attention to teaching quality, research output, and graduate outcomes, often favouring generalist curricula rather than discipline-specific. There needs to be a careful analysis of the university experience of property and valuation students to ensure that graduate capabilities meet industry expectations, and that graduates themselves are able to adapt to future change. There also needs to be greater attention paid to the quality of teaching within universities and more evidence that mainstream tertiary teaching pedagogy is properly applied within the programs offered. Research limitations/implications - As a case study this paper chronicles the experiences at one university. It indicates a need for a wider, systematic study of how greater engagement by property and valuation academic and teaching staff can be more actively engaged in mainstream university teaching pedagogy. Originality/value - The value of this paper lies in its chronicling of a detailed and structured renewal process. It highlights real difficulties faced by tertiary academics in a narrow discipline such as valuation during a renewal process, aimed at continuing high-quality professional education. [ABSTRACT FROM AUTHOR]

Purpose - The paper seeks to ascertain if there exists a uniform approach towards reporting on contaminated land in practice standards employed in Australia and the UK. The UK is a highly industrialised country and Australia is less so. The paper also tries to find out if the practice standard in a less industrialised country is less stringent than the practice standard in a highly industrialised country. Design/methodology/approach - The paper compares the valuation practice standards in Australia and the UK. In the former country, formal guidance on contaminated land valuation was first published in 1994 by the Australian Institute of Valuers and Land Economists (now the Australian Property Institute) in the Contaminated Land Practice Standard. This document was subsequently downgraded from a practice standard to a guidance note, "Guidance Note 15 Reporting on Contaminated Land" of Professional Practice 2002. In the UK practice standards are contained in the RICS guidance note Contamination and Environmental Matters their Implications for Property Professionals. (RICS, 2003a). Findings - Both Australia and the UK have developed significant and detailed guidance notes on contamination and environmental matters. The respective guidance notes reflect the varying socio-economic backgrounds of the two countries in particular differing industrial legacies. Despite a high degree of similarity in the approaches and procedures adopted there are nonetheless significant differences across the two sets of standards. The extended guidance in the UK highlights the increasing knowledge on contamination and environmental matters as it affects all types of chartered surveyors rather than focussing solely on the valuation function. In contrast the Australian guidance note appears to be more prescriptive concentrating on the details of the valuation role. Originality/value - Contaminated land is an environmental problem that causes great concerns among the general public, landowners, occupiers, investors and financial institutions. Despite the negative image of contaminated land, valuers are from time to time instructed to assess its market value. In this regard, valuation institutions in most developed countries have prepared a practice standard to help members report on contaminated land. Each country has its unique socio-economic background. The various practice standards will no doubt reflect the respective conditions in their country and the reporting standards will be different. Thus, it can be inferred that there is a substantial difference in the reporting standards between highly industrialised countries and less industrialised countries. [ABSTRACT FROM AUTHOR]

Purpose – Investment in Australia’s property market, whether directly or indirectly through Australian real estate investment trusts (A-REITs), grew remarkably since the 1990s. The degree of segregation between the property market and other financial assets, such as shares and bonds, can influence the diversification benefits within multi-asset portfolios. This raises the question of whether direct and indirect property investments are substitutable. Establishing how information transmits between asset classes and impacts the predictability of returns is of interest to investors. The paper aims to discuss these issues. Design/methodology/approach – The authors study the linkages between direct and indirect Australian property sectors from 1985 to 2013, with shares and bonds. This paper employs an Autoregressive Fractionally Integrated Moving Average (ARFIMA) process to de-smooth a valuation-based direct property index. The authors establish directional lead-lag relationships between markets using bi-variate Granger causality tests. Johansen cointegration tests are carried out to examine how direct and indirect property markets adjust to an equilibrium long-term relationship and short-term deviations from such a relationship with other asset classes. Findings – The authors find the use of appraisal-based property data creates a smoothing bias which masks the extent of how information is transmitted between the indirect property sector, stock and bond markets, and influences returns. The authors demonstrate that an ARFIMA process accounting for a smoothing bias up to lags of four quarters can overcome the overstatement of the smoothing bias from traditional AR models, after individually appraised constituent properties are aggregated into an overall index. The results show that direct property adjusts to information transmitted from market-traded A-REITs and stocks. Practical implications – The study shows direct property investments and A-REITs are substitutible in a multi-asset portfolio in the long and short term. Originality/value – The authors apply an ARFIMA(p,d,q) model to de-smooth Australian property returns, as proposed by Bond and Hwang (2007). The authors expect the findings will contribute to the discussion on whether direct property and REITs are substitutes in a multi-asset portfolio. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to examine the impacts of private placement announcements by Australian Real Estate Investment Trusts (A-REITs) on existing shareholders. The study examines 96 A-REIT private placements from January 2000 to December 2012. Design/methodology/approach – Utilising event study methodology the authors examine the impact on existing shareholders wealth by measuring the abnormal returns (AR) around the placement announcement. The authors extend the analysis to model the A-REITs ARs against a number of explanatory variables to investigate the possible drivers for the observed event study results. Findings – The results support the information signalling hypothesis, in that existing investors in A-REITs earn negative and significant cumulative ARs of −1.3 per cent over the three-day event window [−1, +1]. This result is in contrast to prior studies conducted on industrial firms, for example; Hertzel and Smith (1993), Krishnamurthy et al. (2005) and Wruck and Wu (2009). Practical implications – Regression analysis shows A-REITs trading at a premium to net tangible assets and A-REITs that use placement funds for their core business have a positive impact on announcement ARs. Originality/value – This paper adds to the existing literature surrounding private placements and is the first paper, to the authors’ knowledge, to examine the impact of Australian REITs. [ABSTRACT FROM AUTHOR]

Purpose – The aim of this paper is to identify the competency expectations for property professionals in Australia. It further discusses differences in competency expectations between property professionals who have different professional backgrounds, such as valuers or non-valuers, and property professionals who work in different sectors or different-sized companies and who have differing amounts of experience. The competencies identified in this paper include knowledge areas, skills and attributes. Design/methodology/approach – This paper presents the research findings of a questionnaire survey sent to Australian Property Institute members, which aimed to gather Australian property professionals' views on the knowledge, skills and attributes required to perform their roles effectively. The percentage of the respondents who provided different choices of given answers for each of the 31 knowledge areas, 20 skills and 21 attributes was identified and discussed. The professional backgrounds of the respondents were also identified to see whether these impact on competency expectations for property professionals. Content analysis was used to analyse written comments collected in the questionnaire. Findings – The most important categories of knowledge, skill and attribute for Australian property professionals are valuation, effective written communication and practical experience, respectively. The least important are international real estate, second language and creativity. Knowledge of rural valuation is very important in Australia, although this has not been mentioned in previous studies. Professional backgrounds have a large influence on Australian property professionals' views on knowledge requirements, but less so on skills and attributes. Practical implications – The findings of this paper can be used as guidance for property professionals in their professional development plan. In addition, property course providers can use the research findings of this paper to inform their curriculum development and redesign. Originality/value – This project is the first to identify the comprehensive competency expectations of property professionals as a whole in Australia. At the same time, it identifies differences in the competency expectations of property professionals who have different professional backgrounds. Similar types of study have been conducted in the UK, the USA, Hong Kong and New Zealand but not yet in Australia. An understanding of the knowledge, skills and attributes required for property professionals is important for continuing professional development, curriculum development and the redesign of relevant property courses in order to maintain performance and competitiveness in the property sector. [ABSTRACT FROM AUTHOR]

Purpose There has been declining home ownership and increased acceptance of long-term renting in many western countries including Australia; this has created a problem when examining housing markets as there are dual demand and include both owner-occupiers and investors. The purpose of this paper is to examine the long-run relationship between house prices, housing supply and demand, and to estimate the effects of the two types of demand (i.e. owner-occupier and investor) on house prices.Design/methodology/approach The econometric techniques for cointegration with vector error correction models are used to specify the proposed models, where the housing markets in the Australian states and territories illustrate the models.Findings The results highlight the regional long-run equilibrium and associated patterns in house prices, the level of new housing supply, owner-occupier demand for housing and investor demand for housing. Different types of markets were identified.Practical implications The findings suggest that policies that depress the investment demand can effectively prevent the housing bubble from further building up in the Australian states. The empirical findings shed light in the strategy of maintaining levels of housing affordability in regions where owner-occupiers have been priced out of the housing market.Originality/value There has been declining home ownership and increased acceptance of long-term renting in many western countries including Australia; this has created a problem when examining housing markets as there are dual demand and include both owner-occupiers and investors. This research has given to the relationship between supply and dual demand, which includes owner-occupation and investment, for housing and the influence on house prices. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to use Australian Real Estate Investment Trust (A-REIT) data to empirically examine potential influencing factors on A-REITs becoming a bidder or a target in the mergers and acquisitions (M&A) area. Design/methodology/approach – This study uses logistic regression analysis to investigate the odds of publically traded A-REITs being either a bidder or a target as a function of a number of financial and corporate governance variables. Findings – Prior research in the US REIT M&A area has shown that target size is inversely related to takeover likelihood; in contrast, the authors' Australian results show that size has a positive impact. Prior research on share price and asset performance has shown that underperformance increases the odds of an entity becoming a target, but this paper's results further support these findings and provide confirmation of the inefficient management hypothesis. For acquirers it was found that leverage, cash balances, management structure, the level of shares held by related parties and the global financial crisis have an important impact on bidder likelihood. Practical implications – Given that the literature suggests that investors can earn significant positive abnormal returns by owning targets, but incur significant abnormal losses by owning bidders, at announcement, this study will be useful to fund managers and other investors in A-REITs by investigating the characteristics of those firms that become targets and bidders. Originality/value – This paper adds to the recent US REIT M&A literature by examining the second biggest REIT market in the world and reporting a number of factors that might influence A-REITs to become targets or bidders. [ABSTRACT FROM AUTHOR]

Purpose – This is the first paper which aims to investigate factors that might influence the gender composition of boards of directors of Australian Real Estate Investment Trusts (A-REITs). Design/methodology/approach – This study follows Mateos de Cabo, Gimeno and Nieto and the gender diversity literature and investigates the existence and number of women directors on the boards of directors of 37 A-REITs from 2006 to 2011. Findings – There is evidence that larger (by market capitalization) A-REITs are more likely to employ a woman director and that A-REITs with larger boards are more likely to employ a woman director and indeed more women directors. It also appears that A-REITs whose head office is in Sydney are more likely to employ a woman director and also more women directors. Practical implications – Women seeking to be engaged as directors of A-REITs are more likely to be employed by larger A-REITs (by market capitalization), those with larger boards and those located in Sydney. Originality/value – This paper adds to the existing literature on gender diversity by examining the factors that appear to influence the employment of women on A-REIT Boards. [ABSTRACT FROM AUTHOR]

The article presents a research paper on the implementation of Public Private Partnership (PPP) projects. It states that the study involves a questionnaire survey in Hong Kong, China, Australia and Great Britain to investigate the reasons for implementing PPP projects. It mentions that respondents were required to rate the importance of nine identified reasons for PPP project implementation. It notes that the study aims to obtain public's interest to understand the government approach in implementing PPP projects. Moreover, the respondents' rankings showed that Great Britain centered on financial elements of PPP projects while Australia and Hong Kong were more linked to overall performance.

Purpose - The aim of the paper is to determine the dynamic relationships between REIT returns and those of other financial and real unsecuritized assets internationally. Design/methodology/approach - Using a multi-factor model the flexible least squares (FLS) coefficients of REIT returns against stock, bond and direct property returns are derived for the REIT markets of the USA, Australia, Japan and Singapore. Findings - The correlation between REIT returns and those of other financial and real assets varies not only across countries but also inter-temporally. REITs can certainly provide diversification benefits to a multi-asset investment portfolio. However, due to the time-varying nature of the correlation, active management is advised and REITs should be not be viewed as a complete substitute for direct property investment. Research limitations/implications - There are two major limitations to the study. Firstly, the sampling periods used are not the same across the countries due to differing market maturity. Secondly, there are also sheer differences in market sizes. However, as REIT markets around the world continue to grow and become more mature in terms of their breath and depth, there will be a richer set of data available for more in-depth analyses based on the methodology presented here. Practical implications - The conclusions on both mature and emerging REIT markets could provide some ideas for international investors as to how they should formulate their time-varying investment strategies and reconstruct their portfolios as mature markets become more efficient and emerging ones more mature. Originality/value - The inclusion of Asian markets enables investigation of the correlation between REITs and different assets in respect not only of different market conditions, but also different geographical locations and market maturity. The international dimension of this paper may appeal to readers and investors who are interested in identifying diversification opportunities around the globe, especially so when the capital and property markets around the world are becoming more integrated and globalized. [ABSTRACT FROM AUTHOR]

Purpose – Property is a key investment asset class that offers considerable benefits in a mixed-asset portfolio. Previous studies have concluded that property allocation should be within the 10-30 per cent range. However, there seems to be wide variation in theory and practice. Historical Australian superannuation data shows that the level of allocation to property asset class in institutional portfolios has remained constant in recent decades, restricted at 10 per cent or lower. This is seen by many in the property profession as a subjective measure and needs further investigation. The purpose of this paper is to compare the performance of the AU$431 billion industry superannuation funds’ strategic balanced portfolio against ten different passive and active investment strategies. Design/methodology/approach – The analysis used 20 years (1995-2015) of quarterly data covering seven benchmark asset classes, namely: Australian equities, international equities, Australian fixed income, international fixed income, property, cash and alternatives. The 11 different asset allocation models are constructed within the modern portfolio theory framework utilising Australian ten-year bonds as the risk free rate. The Sharpe ratio is used as the key risk-adjusted return performance measure. Findings – The ten different asset allocation models perform as well as the industry fund strategic approach. The empirical results show that there is scope to increase the property allocation level from its current 10-23 per cent. Upon excluding unconstrained strategies, the recommended allocation to property for industry funds is 19 per cent (12 per cent direct and 7 per cent listed). This high allocation is backed by improved risk-adjusted return performance. Research limitations/implications – The constrained optimal, tactical and dynamic models are limited to asset weight, no short selling and turnover parameters. Other institutional constraints that can be added to the portfolio optimisation problem include transaction costs, taxation, liquidity and tracking error constraints. Practical implications – The 11 different asset allocation models developed to evaluate the property allocation component in industry superannuation funds portfolio will attract fund managers to explore alternative strategies (passive and active) where risk-adjusted returns can be improved, compared to the common strategic approach with increased allocation to property assets. Originality/value – The research presents a unique perspective of investigating the optimal allocation to property assets within the context of active investment strategies, such as tactical and dynamic models, whereas previous studies have focused mainly on passive investment strategies. The investigation of these models effectively contributes to the transfer of broader finance and investment market theories and practice to the property discipline. [ABSTRACT FROM AUTHOR]

Purpose – To achieve long-term performance, superannuation balanced funds typically invest in a range of defined asset classes based on a strategic asset allocation approach. In an Australian context, the purpose of this paper is to examine the performance of the balanced investment option against eight different investment strategies and how the property allocation changes with different asset allocation models. Design/methodology/approach – The analysis is based on ex post data covering 17 years (1995 to 2011). The selected passive and active allocation models are set within the modern portfolio theory framework utilising Australian ten year bonds as the risk free rate. The Sharpe ratio is used as the key risk-adjusted return performance measure. Findings – Property provided the second highest risk adjusted return profile behind the alternative asset class. The different asset allocation models perform as well as the conventional strategic approach and in many instances property allocation is found to be under-allocated on a return optimisation basis. Depending on the asset allocation model, property when included within a multi-asset portfolio improves the portfolio risk-adjusted return profile by 2 per cent to 28 per cent. Practical implications – For an Australian superannuation balanced fund, the empirical results show that there is scope to increase the property allocation level from current 10 per cent to 23 per cent. This knowledge will be beneficial for funds currently re-profiling investment portfolios to achieve stable risk-adjusted returns. Originality/value – The research contributes to both practical and academic fields, as it offers a methodological approach on how allocation to property assets can be improved using a series of passive and active asset allocation strategies. [ABSTRACT FROM AUTHOR]

Purpose: This research investigated Australian property valuers' identification and consideration of physical climate change risks in valuation practice. Design/methodology/approach: Thirty Australian valuer members of the Australian Property Institute from a variety of specialisations were interviewed. The semi-structured interviews explored climate change risks and the extent of risk investigation and consideration in valuation practice. The analysis utilised the Moser and Luers (2008) climate risk preparedness framework as a lens to evaluate current valuation practice in Australia. Findings: The analysis reflects that while physical risks are easily identified and engaged with by valuers, correspondingly, there is a lack of understanding of and engagement with, climate change risks. This supports the need for better information sources and guidance to inform valuers of climate change risks and the development of specific mechanisms for the consideration of such risks to be included in valuation processes, practices and reports. Research limitations/implications: The research was limited by its sample size and qualitative approach. Therefore, the research is not a representative opinion of the Australian profession; however, the analysis provides the perspective of a range of valuers from across Australia with different valuation specialisations. Practical implications: This research has established that valuers have the potential to be prepared to address climate change in their professional capacity, as described by Moser and Luers (2008). However, they are constrained by information communication, access and detail and subsequent market awareness of information on climate change risk exposure on properties. There is a need for further support, guidance, information and tools, as well as awareness-raising, to enable valuers to accurately identify and reflect all risks affecting a property in the process of valuation. Originality/value: This research provides the first investigation into the consideration of climate change in valuation practice. Property stakeholders—owners, investors, financiers and occupiers—are escalating their climate change risk analysis and reporting for property portfolios and organisations. This research suggests that valuers also need to be aware of the changing dynamics of market reporting and decision-making related to climate change risks to ensure appropriate reflection in valuation practice. [ABSTRACT FROM AUTHOR]

Purpose - This paper aims to identify and examine the determinants of downside systematic risk in Australian listed property trusts (LPTs). Design/methodology/approach - Capital asset pricing model (CAPM) and lower partial moment-CAPM (LPM-CAPM) are employed to compute both systematic risk and downside systematic risk. The methodology of Patel and Olsen and Chaudhry et al. is adopted to examine the determinants of systematic risk and downside systematic risk. Findings - The results confirm that systematic risk and downside systematic risk can be individually identified. There is little evidence to support the existence of linkages between systematic risk in Australian LPTs and financial/management structure determinants. On the other hand, downside systematic risk is directly related to the leverage/management structure of a LPT. The results are also robust after controlling for the LPTs' investment characteristics and varying target rates of return. Practical implications - Investors and real estate analysts should conscious with the higher returns from high leverage and internally managed LPTs. Although there is no evidence that these higher returns are related to higher systematic risk, there could be the compensation for higher downside systematic risk. Originality/value - This study provides invaluable insights into the management of real estate risk in Australian LPTs with implications for REITs in other countries. Unlike previous studies of systematic risk in REITs or LPTs, this is the first study to assess downside systematic risk and explore the determinants of downside systematic risk in LPTs. [ABSTRACT FROM AUTHOR]

Purpose - The aim of the paper is threefold: to provide an overview of gearing in the Australian real estate investment market; formally examine the relationship between property returns, risk and gearing; and provide some guidance in evaluating "optimal" gearing levels for real estate investment. Design/methodology/approach - A mathematical modelling framework is presented for evaluating the relationship between investment returns, risk and gearing levels. Findings - The study highlights that risk rises with rising gearing levels and that risk-adjusted returns fall with rising gearing. Furthermore, it is shown that the gearing-risk relationship is influenced not only by the cost of debt structure but also the interdependency between ungeared returns and interest rates. Research limitations/implications - The study suggests that current gearing levels from Australian listed property trusts and unlisted wholesale property funds are relatively conservative. This implies that current gearing could be increased, in particular for wholesale funds, without taking on substantially more risk whilst enhancing returns. Practical implications - The paper is of value to industry and academia as it offers an extended framework for evaluating the relationship between risk and gearing. In particular, the framework provides insight for gauging gearing levels when constructing real estate investment strategies. Originality/value - Importantly, the paper shows that the interdependency between ungeared returns and interest rates significantly impacts the relationship between risk and gearing. [ABSTRACT FROM AUTHOR]

Purpose - Retail property is an important property investment sector. The purpose of this paper is to assess the importance of retail property type, size and region in Australian retail property and the strategic role of direct retail property and retail listed property trusts (LPTs) in a mixed-asset portfolio. Design/methodology/approach - This paper analyses the performance of retail property in Australia over 1995-2005 for both direct and indirect retail property. Risk-adjusted performance analysis is used to assess the added value of retail property in a mixed-asset portfolio, with the portfolio diversification benefits of retail property also assessed. Findings - The paper finds that retail property and retail LPTs have delivered substantial risk-adjusted returns and portfolio diversification benefits over 1995-2005. The retail property sub-sectors of retail property type, size and region have different performance characteristics; particularly highlighting the substantial role of geographic diversification as the most effective portfolio diversification strategy for retail property investors. Direct retail property and retail LPTs are also identified as having different performance characteristics and each contributing substantially to an institutional property investment strategy. Originality/value - Previous retail research has been at an "overall" Australian retail property level. This paper rigorously assesses retail property at a retail sub-sector level regarding retail property type, size and location. This level of analysis enables more informed and practical investment decision-making regarding the role of retail property in a mixed-asset portfolio for both direct and indirect retail property as part of an institutional property investment strategy. [ABSTRACT FROM AUTHOR]

Purpose ? Given the stature of international tourism, hotel properties are an important property investment sector. The purpose of this paper is to assess the importance of a range of financial, location, economic, diversification and relationship factors in influencing hotel investment decision making. Design/methodology/approach ? This paper reports the findings of a survey of major hotel investors and hotel owners/operators in Australia regarding the factors influencing hotel investment decision-making. The AHP multi-criteria decision-making methodology is used to assess the weights attached to each of the 30 factors influencing hotel investment decision-making. Findings ? The main factors influencing hotel investment decision making were financial (weight of 37.0 per cent) and location (29.9 per cent) factors. These were followed by economic (14.5 per cent), diversification (12.0 per cent) and relationship (6.6 per cent) factors. This sees three levels of importance in the factors influencing hotel investment decision making. Differences were also found between the priorities for hotel investors and hotel owners/operators. Originality/value ? Only limited research is available concerning the hotel sector. This paper rigorously assesses the hotel investment process and assists hotel investors in prioritising the significance of 30 key factors and sub-factors in hotel investment decision-making. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this study is to analyse the current relationships between developer characteristics in terms of dominant property type (residential, commercial, retail, industrial, tourism, "other"), ownership (publicly listed, publicly unlisted, private, government), organisational structure (speculative-trader, investor developers, development managers) and size (small, medium, large) in the frequency of use and required minimum value of hurdle rate metrics. Design/methodology/approach: A questionnaire survey of 225 Australian and New Zealand trader developers, development managers, investors, valuers, fund managers and government/charities/other relating to the feasibility practices of different types of Australia/New Zealand property development companies. Findings: (1) Residential dominant developers are more likely to use margin on development cost (MDC) required to have a higher minimum internal rate of return (IRR) percentage; (2) investor developers are more likely to use the payback period as a hurdle rate, and specific hurdle rates as a part of a go/no-go decision; (3) trader developers adopt a higher percentage of IRR and deviate further from accepted financial theory in hurdle rate selection; and (4) national property development organisations in multiple geographic regions use qualitative frameworks more as a decision-making process and use MDC less as a hurdle rate. Practical implications: The study is limited to a sample of property practitioners working in Australia/New Zealand at the time of data collection in 2016 and, further empirical research is needed spatially and temporally to determine the extent of the findings. Further research is also needed with small- to medium-sized development organisations' on the extent to which they should use different metrics in project selection and for an improved understanding of the technical and attitudinal difficulties facing their current adoption. Originality/value: First study to examine the feasibility practices of different types of Australia/New Zealand property developers. [ABSTRACT FROM AUTHOR]

Purpose: The purpose is to examine the risk management processes and methods used in determining project feasibility in the early stages of the property development process by Australia/New Zealand property developers, including Monte Carlo simulation, Bayesian models and real option theory embedded in long-term property development and investment decision-making as instruments for providing flexibility and managing risk, uncertainty and change. Design/methodology/approach: A questionnaire survey of 225 Australian and New Zealand trader developers, development managers, investors, valuers, fund managers and government/charities/other relating to Australia/New Zealand property development companies' decision-making processes in the early stages of the development process prior to site acquisition or project commencement – the methods used and confidence in their organisations' ability to both identify and manage the risks involved. Findings: Few of the organisations sampled use sophisticated methods; those organisations that are more likely to use such methods for conducting risk analysis include development organisations that undertake large projects, use more risk analysis methods and have more layers in their project approval process. Decision-makers have a high level of confidence in their organisation's ability to both identify and manage the risks involved, although this is not mirrored in their actual risk management processes. Although the majority of property developers have a risk management plan, less than half have implemented it, and a third need improvement. Practical implications: Property development organisations should incorporate more modern and sophisticated models of risk analysis to determine the uncertainty of, and risk in, a change of input variables in their financial viability appraisals. Practical application includes using such multiple techniques as what-if scenarios and probability analysis into feasibility processes and utilise these specific techniques in the pre-acquisition stages of the property development process and, specifically, in the site acquisition process to support decision-making, including a live risk register and catalogue of risks, including identification of and plans for mitigation of project risks, as a form of risk management. Originality/value: First study to examine the extent of the decision-making methods used by property developers in the pre-acquisition stage of the development process. [ABSTRACT FROM AUTHOR]

Purpose: This research seeks to understand the potential impact to investors from government responses to climate change risk, as reflected in changes to planning processes made after significant weather events. Design/methodology/approach: The research examines the land planning responses within a select local government authority ("LGA") area following four significant weather events, in order to identify any changes made, and the impact on future development proposals. The LGA selected is the Central Coast Council, which is a coastal LGA in the Australian State of New South Wales. The research engaged with the publicly accessible records available on the Central Coast Council, Australian Bureau of Meteorology and other websites; and extant literature. Findings: The research reveals that some adjustments were made by the Central Coast Council, and or the State government, to relevant laws, policies and processes following these events. These changes, however, tended to focus on imposing additional requirements on future development applications, rather than on requiring changes to current structures, or prohibiting further development works. Research limitations/implications: The research has three limitations: (1) land law in Australia varies, as each State and Territory, and LGA, has specific laws, policies and processes; (2) as laws and policies are subject to change, it was necessary to select points in time at which to engage with those laws and processes; and (3) COVID-19's impact on domestic Australian travel [the authors could not travel interstate] meant only documents available on the Internet were considered, however, not all documents relating to development; or changes to laws and processes were easily accessible online. As the research focussed on one case study area, this may limit the applicability of the results to other areas. However, as extreme events are international, the related issues are a concern in all areas. Practical implications: This research confirms the results of other extant research, which observed that some risks cannot be properly mitigated, such that any development in an at-risk area remains at risk. It also identifies that more current, accurate and publicly accessible data are required to enable investors to more easily and accurately identify all risks affecting a property. Originality/value: The research provides a snapshot of one LGA's response to the physical risks arising from climate change events. As investors and other organisations integrate and build up their analysis of climate risks to their portfolios and organisations, governments become more aware of the long-term effects of climate change and consistently with extant research; this research indicates that a greater awareness is required of current risks and action to manage the short-term effects and cost challenges, in addition to the long-term adaptation requirements. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this research is to investigate Australian property valuers' identification and consideration of physical risks to properties in valuation practice. The research further explores valuers' considerations of climate change-related risks. Design/methodology/approach: The research approach comprised an online survey of Australian valuers who were members of the Australian Property Institute. The online survey included structured and unstructured questions to explore types and extent of risk investigations in valuation practice. Findings: The analysis reflects that while valuers easily identified and engaged with physical risks, there is a lack of understanding of, and engagement with, climate change risks. This supports the need for better information sources and guidance to inform valuers of climate change risks per se, as well as the development of specific mechanisms for consideration of such risks to be included in valuation processes, practices and reports. Research limitations/implications: The research is limited by the small sample size achieved due to the timing of the survey deployment, which occurred during the first wave of COVID-19 lockdowns in Australia. Thus, the findings are not necessarily representative of the Australian valuation profession, but they do provide indications of current approaches to risk identification in practice and the need for more guidance in relation to climate change risks. Practical implications: This research identifies that more support, guidance, information and tools, as well as awareness-raising, are required to enable valuers to accurately identify all risks affecting a property. Originality/value: The research provides a snapshot of current understandings of physical risk identification in valuation practice. As investors and other organisations integrate and build up their analysis of climate risks to their portfolios and organisations, this research indicates that valuers also need to be aware of changing market assessment of physical and climate risks associated with property for consideration in valuation. [ABSTRACT FROM AUTHOR]

Purpose: The study aims to comment upon the state of property education in Australia. Design/methodology/approach: Statement of opinion Findings: Property education in Australia is heading down a one-way dead-end road Research limitations/implications: This article is a statement of opinion Practical implications: Highlights alternative forms of delivery for property education in Australia Social implications: Considers property education delivery in context of current social environment Originality/value: Statement of opinion based in experience in academia and practice [ABSTRACT FROM AUTHOR]

Purpose: To identify barriers to climate change adaptation in the Australian property industry. Design/methodology/approach: Semi-structured interviews with twenty-four stakeholders from a diverse cross-section of the Australian property industry were undertaken in 2018 and 2019. Findings: A range of barriers to action on climate change were identified. These barriers centre around (1) information: lack of clear, reliable, and trusted sources of climate change information; (2) cost: competing economic demands, and the perceived threat that investing in climate change action poses to competitiveness; and (3) regulation: the inaction of governments thus failing to provide a regulatory environment to address climate change. Research limitations/implications: The qualitative research provides perspectives from actors in different sectors of the Australian property industry. While it provides an in-depth understanding of the barriers to addressing climate change adaptation, it is not necessarily a nationally representative sample. Practical implications: The study identifies barriers to climate change adaptation, and establishes practical ways in which the Australian property industry can address these barriers and the role that government regulation could have in generating industry-wide change. Social implications: Climate change poses significant challenges to society. Built environments are significant contributors to climate change, and thus the property industry is well-placed to make positive contributions to this global challenge. Originality/value: Limited research has examined barriers to climate change action in the property industry. This research provides novel insights from the perspective of key actors across a diverse range of property industry sectors. This new knowledge fills an important gap in understanding how to address climate change in Australia and broader contexts. [ABSTRACT FROM AUTHOR]

Purpose – In Australia, the A$2.2 trillion managed funds industry including the large pension funds (known locally as superannuation funds) are the dominant institutional property investors. While statistical information on the level of Australian managed fund investments in property assets is widely available, comprehensive practical evidence on property asset allocation decision-making process is underdeveloped. The purpose of this research is to identify Australian fund manager's property asset allocation strategies and decision-making frameworks at strategic level. Design/methodology/approach – The research was undertaken in May-August 2011 using an in-depth semi-structured questionnaire administered by mail. The survey was targeted at 130 leading managed funds and asset consultants within Australia. Findings – The evaluation of the 79 survey respondents indicated that Australian fund manager's property allocation decision-making process is an interactive, sequential and continuous process involving multiple decision-makers (internal and external) complete with feedback loops. It involves a combination of quantitative analysis (mainly mean-variance analysis) and qualitative overlay (mainly judgement, or “gut-feeling”, and experience). In addition, the research provided evidence that the property allocation decision-making process varies depending on the size and type of managed fund. Practical implications – This research makes important contributions to both practical and academic fields. Information on strategic property allocation models and variables is not widely available, and there is little guiding theory related to the subject. Therefore, the conceptual frameworks developed from the research will help enhance academic theory and understanding in the area of property allocation decision making. Furthermore, the research provides small fund managers and industry practitioners with a platform from which to improve their own property allocation processes. Originality/value – In contrast to previous property decision-making research in Australia which has mainly focused on strategies at the property fund investment level, this research investigates the institutional property allocation decision-making process from a strategic position involving all major groups in the Australian managed funds industry. [ABSTRACT FROM AUTHOR]