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The purpose of this paper is to identify and analyze crucial variables of customer satisfaction towards residential facility management (FM) service, and to enable FM companies to deliver high quality services.

The research is based on a survey of customer satisfaction of one residential property in Hong Kong. FM service is divided into two interrelated clusters which are denoted by two latent variables, and then a specific structural equation model is developed for identifying and quantifying the influence of service and management quality on customer satisfaction and clarifying the causal relationships between these latent and observed variables.

The research reveals that: both service and management quality have significant positive effect on customer satisfaction, and the effect of service quality is larger than that of management quality when the indirect effect is taken into account; service quality is a crucial latent variable influencing customer satisfaction and it has a significant direct effect on management quality; how the individual observed variables work together to characterize the corresponding latent variables from an empirical point of view, and some key variables that should be focused on by facility managers in the housing sector are also identified.

Structural equation models are advocated for evaluating customer satisfaction in the housing property sector of facility management service. It can also be used in other sectors of facility management, such as office, retail property or some public property management like hospitals and schools. It has implications for facility management managers in how to improve residential customers' satisfaction level.

This paper presents a quantitative model of characterizing the degree of customer satisfaction.

The objective of this paper is to demonstrate that the Pygmalion hypothesis is supported in the housing market and the hypothesis that investors are, all too frequently, unrealistically over‐optimistic cannot be rejected.

The methodology in the paper relies on a cross‐sectional questionnaire survey and a longitudinal telephone survey.

The findings in the paper demonstrate that self‐fulfilling prophecies occur in property markets. The effect of self‐fulfilling expectations is common and more powerful than rational real estate fundamentals. The consistent pattern of significant over‐forecasting of housing prices suggest that the hypothesis that investors are, most of the time, over‐confident cannot be rejected.

In the longitudinal survey in this paper, only limited samples were secured. The developmental change of attitudes and buying behaviors over time was not observed. People's price expectations might be different from those reported in the first three waves of survey, as real estate fundamentals change from time to time.

In the paper a forward looking approach is used to solicit people's views on current and future housing prices, investment considerations and sentiment over time. An increase in property price being simply the outcome of self‐fulfilling expectations – the Pygmalion Effect will be signaled to housing participants. Studying people's confidence and sentiments helps understand speculative enthusiasm or ‘bubble”.

The longitudinal survey in the paper on people's price expectations is the first of its kind in Hong Kong. The results are beneficial to policy makers, homeowners, potential homebuyers and investors. Housing decisions of potential homebuyers can be made more rationally and Government officials can have more reliable property information and data for policy formulation.

The property service agents (PSAs) are the outsourced agents of Hong Kong Housing Authority (HKHA), who manage the HKHA's rental properties in a competitive environment. To enhance the competitiveness edges of these PSAs under the inelastic management fee constraint, it is prudent for them to acknowledge those competitive property management attributes upon which PSAs reallocate their limited internal resources to best meet the expectations of the tenants.

Analytic hierarchy process (AHP) was adopted for revealing the preference of tenants on those captioned attributes under a ratio scale. The data were collected through face‐to‐face interviews with the representatives of tenants of housing estates including but not limited to chairmen of Mutual Aid Committees and District Councilors.

The findings indicated that, amongst all competitive property management attributes, tenants of older housing estates preferred a higher level of repairs and maintenance, while those tenants of younger and larger population housing estates focused more on environmental control issues.

Without an objective quantitative analysis of tenants' preferences, the PSAs might render misallocation of limited resources, which would not only jeopardize their survival in the competitive commercial world but also upset the expectation of the tenants.

The use of quantitative study to solicit the preferences of public housing tenants on property management attributes is the first kind of study which provides comprehensive knowledge of tenants' preferences and could enable PSAs to enhance their competitiveness in the commercial world under the constraints of inelastic management fees structure.

The purpose of this paper is to examine the progress of rehabilitation and redevelopment and review the effectiveness of the Land (Compulsory Sale for Redevelopment) Ordinance (LCSRO) (Cap. 545) and proposals that influence the urban renewal process in Hong Kong.

The study largely relies on the review of the LCSRO and the Government's proposal, and the urban renewal progress. Rehabilitation and redevelopment data was collated and analyzed to assess how effective the renewal process and the Government legislation have been in tackling the urban decay problem in Hong Kong. This study benchmarks the good practices of Singapore.

The pace of urban renewal activities in Hong Kong is lagging behind its policy goal. The implementation of the urban renewal programme has not adequately resolved the serious problem of ageing buildings. The existing legislation has not been effectively attracting private sector's participation either. The proposed relaxation of the compulsory sale threshold for specified classes of lots under the LCSRO aims to assist private sector‐led redevelopment. However, it is not a panacea for urban decay. Whilst the private sector's participation is facilitated, the Government should consider complementary measures, e.g. the relaxation of such criteria as the building age, plot ratio and height limitation for a more effective and efficient process, particularly in less attractive sites. A careful balance should be maintained in redeveloping different regions in the city. The Government should also be cautious about the negative externalities that might affect to the community.

The paper identifies the implementation gap of urban renewal in Hong Kong. Practical suggestions are made to the Government and related organizations to expedite urban renewal works.

The paper assesses Hong Kong's urban decay problem in a quantitative way. This approach has hardly been applied in a local context. It also highlights important issues relating to private sector involvement in urban renewal activities and various concerns over the proposed changes to the LCSRO. The paper will benefit local policy makers, property developers and professionals in the area. Its results will form a basis for further research on the impact of the proposals on land supply and housing prices after its implementation.

This paper aims to investigate the benefits derived from sustainable office buildings in People’s Republic of China (PRC) through their green features, with particular reference to energy efficiency.

A survey on operating costs, energy impacts, productivities from property managers and tenants of sustainable office buildings was conducted in Shenzhen, PRC. All survey data were collected from a portfolio of 12 sustainable office buildings and from 76 responses out of more than 400 tenants who had moved into these buildings from conventional office buildings.

Most tenants were concerned with sustainable operations, practices and policies. Some of them held that sustainable office buildings contribute to higher productivity and less sick time. These buildings typically consume less electricity and water, and have higher occupancy rates and rents.

There are only 40 sustainable office buildings in Shenzhen, and our study, albeit with proper methodology, with 12 sample buildings may not reflect entirely the attitudes of tenants and property managers of sustainable office buildings in Shenzhen. Advisably, future works can be carried out on a larger scale in other main cities of PRC to obtain a more comprehensive and precise evaluation on which strategic sustainable central/local government policies might be formulated.

The concept of facilities management on sustainable buildings, especially on their derived benefits, is relatively new in developing countries such as China. This study is one of the first attempts in this area. In addition, this paper also contributes to existing literature by looking into the green lease provisions and operating policies of these sustainable buildings.

Residential crowding and underlying causes of crowding have been changing across the globe over time. The aim of this paper is to examine the dynamics of housing consumption and residential crowding in Hong Kong.

While the two‐step Engle‐Granger co‐integration approach based on an error correction model (ECM) is used to test for long‐run relation and short‐run dynamics of housing consumption, the study also uses a multivariate regression model to analyze the factors affecting residential crowding. Along with other variables in previous literature, the study introduces a new institutional factor, i.e. land supply, into the model that analyzes these two issues over a time span of 25 years.

The study's results suggest that many households in Hong Kong still have inadequate housing, and residential overcrowding is a serious issue. Coupled with market forces (e.g. income, housing price, household size), the new land supply factor noticeably has exerted significant influence on the two subject issues under investigation.

The paper provides policy implications that to address such deficiencies, the government should change its current land supply policy. A policy shift is recommended away from its “high‐land price” policy towards comprehensive developments in outer urban areas. This institutional change should help improve housing consumption in the territory overall.

This study adds knowledge to previous works in analyzing residential crowding and its underlying causes over the years, rather than in a particular point in time. It is also the first of its kind in Hong Kong.

It is well known that the traditional net present value (NPV) approach fails to take account of the multiple effects arising from the interactions of the operating and strategic flexibility during the course of a project. Option pricing theory (OPT) has been successfully applied in the valuation of both financial and real investments in the last two decades. However, it is still a relatively new approach in the valuation of real estate investments. This paper thus attempts to extend the application of OPT to the valuation of real estate development projects, providing insights into rectifying the limitations of traditional approaches. The paper starts with an overview of the development of OPT relating to real estate investments. It then examines the appraisal method adopted by the Government for Hong Kong Disneyland and explores the real options that may create added value to the project. A binomial option pricing model is proposed that estimates the potential values of the project with those options available. The study concludes that OPT is superior to NPV approach on the valuation of real estate investments in that it enhances upside potential as well as reducing downside risk.

The purpose of this paper is to examine the behavior of buyers and sellers in making housing decision and analyses the mechanisms of the seller‐buyer interaction affecting house sale prices.

The research methodology relies on a cross‐sectional telephone survey and the statistical analysis of housing transactions in Hong Kong.

The list price is unimportant to the formation of the sale price. Rather buyer‐seller interactions affect housing prices. The list price is positively related to the number of revisions, and the size of reduction, in the list price, and the list period, but negatively related to the sale‐to‐list‐price ratio. Overpriced properties trigger larger price reductions, noticeably, in the first round of negotiation, and stay on the market longer. Short negotiation periods and time‐till‐sale, and a sale at a marginal reduction in the list price is expected by market participants and conforms with the historical sales data. Hence, market expectations are generally fulfilled and support rationality in a steady market.

There are sample size limitations, which might bias the results and weaken the generalizability. The limited housing transactions may not be representative of the population at large.

When the market conditions are moderate, offering the property for sale at close to its current market value would determine the best possible selling price.

Telephone surveys on home buyer‐seller interactions and critical analysis of sale records are extremely rare in Hong Kong. The paper illustrates how, in times of moderate economic conditions and housing prices, the strategic negotiation process will rationally bring the selling price close to the market value price.

This paper seeks to examine the contributions of rehabilitation and redevelopment projects to the labour force of the construction industry in Hong Kong. Major projects from the private and public sectors were critically examined and the manpower requirements and the tangible benefits in terms of wages arising from urban renewal were forecast.

The forecast of the expected persons to be engaged in the construction industry is based on trend regression model. Time series data of construction sites, both private and public, and persons engaged in the past ten years were forecasted for linear trend process for the next three years. From this, a reasonable estimate of man‐days to be engaged and wages to be incurred in the construction industry in the future can be obtained.

The results provide evidence that the impacts are positive. About 19.4 million man‐days and an income of HK$16.4 billion (3.8 per cent of the nominal GDP of Hong Kong in 2008) are anticipated in the short run. To meet urban regeneration needs, the Government should develop various vocational skills and enhance motivation and job search.

There are potential risks of error arising from the use of assumptions, limited sample size and data from the secondary resources.

Urban renewal works can generate more jobs. The ratio of development projects to rehabilitation works in terms of producing job opportunity by the same amount of budget is about 1 to 4.7. To meet urban regeneration needs, the Government should develop various vocational skills and enhance motivation and job search for renewal works.

Urban renewal attracts and stimulates investment, creates employment opportunities and improves the built environment of cities. Also, public rehabilitation works can play a moderate role in stabilizing the economy and the labour market.

The major contributions of this paper are: the estimated labour and financial resources to undertake such renewal works; and the more significant impact of rehabilitation work identified.

Office decentralization has been developing rapidly in Hong Kong since the early 1980s. Office tenants relocated their businesses to the Decentralized District (DD) with the benefits of lower rent, higher flexibility of space use and better supporting facilities. This study examines office decentralization in Hong Kong's office market, both the upturn and downturn. It analyzes the vacancy trend of the Grade A office market in Hong Kong: DD versus Central Business District (CBD), based on a Decentralization Index. This study found that the CBD is a more stable office market sector than the non‐CBD. During a market upturn, the Grade A office market in Hong Kong DD has outperformed that in the CBD. However, during a market downturn, the vacancy rate in the DD tends to increase at a greater rate than that in the CBD. The study also found that periods with a sufficiently high index of decentralization generally experienced increases in CBD rent premiums.