Editorial

Citation

Akintoye, A., Holt, G.D. and Davis, P.T. (2015), "Editorial", Journal of Financial Management of Property and Construction, Vol. 20 No. 3. https://doi.org/10.1108/JFMPC-09-2015-0035

Editorial

Article Type: Editorial From: Journal of Financial Management of Property and Construction, Volume 20, Issue 3

Welcome to The Journal of Financial Management of Property and Construction (JFMPC) issue three of Volume 20 and the final issue of 2015.

This issue goes to press against a backdrop of continued financial and economic turbulence. The Chinese economy, for example, has witnessed stock market and currency devaluation, whilst some commentators have called the “top” of London’s hitherto bull market in residential property, suggesting a period of stagnation or even falling values. Generally, however, global construction markets predict tentative growth led by Asia, North America and Western Europe, in that order.

Regional UK construction markets have continued to recover from the lingering effects of the global financial crisis, but continue to face financial challenges – mainly from increasing clients’ demands, ongoing intense competition and resulting price pressures. Margins among UK contractors are at a median of approximately 3 per cent, which is a modest – nonetheless welcome – increase from 2.1 per cent in 2014 (#B1).

Challenge, however, is often the mother of invention, with recent developments seeing the opening up of China’s infrastructure investment market to international participation[#fn1] and 1,043 new schemes announced under the public-private partnership (PPP) model[#fn2]. This is further evidence of increasing globalisation and integration of the world’s economies and underscores the need for identification, quantification and dissemination of best practice to a broad interest community. JFMPC continues to help serve that need as reflected in this issue’s international mix of authors and equally diverse subjects.

The first paper is authored by Udofia, Hadikusumo and Santoso, who examine road project termination and rebidding strategies in Nigeria. Road projects are among some of the largest and most complex schemes undertaken, and their success is a crucial component in the economic and infrastructural development of emerging economies. This research provides insights into those factors contributing to the termination of schemes, along with critical success factors in getting projects back “on track”. The work is relevant to a wide variety of similar developing economies, with potential to inform procurement practice.

The second paper by Olaniran examines the recurrent issue of contractor selection and here, emphasising the perennial focus on cost and its effect on construction project performance. Whilst seasoned professionals might be expected to hold an a priori assumption that cost emphasis leads to delay and poorer quality, the practice persists. Evidence as provided in this contribution offers a counter view and encourages more balanced selection strategies.

Siew provides the third paper, which will be of interest to those seeking to measure the potential for a “green premium”. The success of policies to support sustainability (and other ethical based approaches) is ultimately dependent upon market forces taking the strain and incentivising appropriate market behaviour. The research focuses on Australian environmental, social and governance real estate investment trusts (REITs), using the “Experts in Responsible Investment Services” data set to determine the “greenness” of Australian REITs. Using Markov chain analysis, it is found that to date, there is little evidence of ESG status being rewarded with superior performance.

The fourth paper of our five papers is conceptual in nature and authored by Ameyaw, Adjei-Kumi and Owusu-Manu. It explores value for money (VfM) assessment methods of public-private partnership projects in Ghana. The VfM issue has been a foremost international consideration among modern infrastructure procurement approaches such as PPP and the private finance initiative (PFI) – but “the jury is still determinedly out”, as to the best way to meet expectations of both taxpayers and investors. This conflict can be seen in the UK’s mature PFI market, where the reformed PF2 model has received a lukewarm reception from institutional investors with a subsequent pronounced contraction in PPP deals achieving financial close following model reform. Given the need to achieve extensive infrastructure development in Africa, this contribution is timely.

The final paper is jointly authored by McCord, McCord, Davis, Haran and Rodgers. It uses principal component analysis and a relative importance index to investigate factors contributing to housing construction project delay in Northern Ireland – a significant region of the UK. The paper represents an empirical contribution to the delay factor knowledge base in the UK and is the first study of its kind to empirically measure delay factors peculiar to the construction of houses in Northern Ireland.

Finally, we extend an acknowledgement to all of our reviewers for offering their expert knowledge and precious time over the past years and, of course, our authors for their valued contributions. Look out for our forthcoming special issue on Economic and Financial Issues of Creating an Age-friendly Built Environment, with Guest Editor Professor Les Ruddock of the University of Salford, UK, next year.

Akintola Akintoye Gary D. Holt

The Grenfell-Baines School of Architecture, Construction and Environment, University of Central Lancashire, Preston, UK, and

Peadar T. Davis

SCOBE, University of Ulster, Newtownabbey, UK

Notes

1. Legislation entitled “Regulation on Infrastructure and Public Utility Concessions” enacted on the 1st June 2015.

2. The Chinese National Development and Reform Commission announcement that 1,043 infrastructure projects will be procured via public-private partnerships (PPP).

Reference

Glenigan (2015), “UK industry performance report 2015”, available at: www.glenigan.com/construction-market-analysis/news/2015-construction-kpis (accessed 18 September 2015).