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Article
Publication date: 19 October 2012

Jasper Beekmans, Erwin van der Krabben and Karel Martens

Urban decline is a much‐researched topic in both urban and real estate literature. Yet, there is no generally accepted measurable indicator for decline. This paper starts…

Abstract

Purpose

Urban decline is a much‐researched topic in both urban and real estate literature. Yet, there is no generally accepted measurable indicator for decline. This paper starts to fill this void. The purpose of this paper is threefold: to better understand the process of decline of one particular urban area, industrial estates; based on that, to identify a possible indicator for decline; and to take a first step in the empirical testing of the suitability of this indicator.

Design/methodology/approach

Building on a review of the literature on definitions of urban decline, and inspired by hedonic price models, the average property value per hectare is identified as a promising indicator for urban decline. Drawing on hedonic price studies explaining the value of individual industrial property, the paper subsequently distinguishes a number of independent variables likely to influence the average property value of an urban area. The paper uses a simple OLS regression to test whether the relation between these independent variables and average property value is in line with expectations.

Findings

The analysis shows that nearly all independent variables have the expected effect on average property values of industrial estates. From this the authors conclude that constructing an indicator for decline based on the average property value of an urban area can prove fruitful to measure decline.

Originality/value

The decline of industrial estates, as a particular type of urban area, has not received much attention in the international real estate literature. Furthermore, the identification of average property value as an indicator for the decline of urban areas is new.

Details

Journal of European Real Estate Research, vol. 5 no. 3
Type: Research Article
ISSN: 1753-9269

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Article
Publication date: 1 June 1999

Bo‐sin Tang and Roger M.H. Tang

Industrial restructuring has led to increasing obsolescence of old industrial properties in many cities. Transformation of these properties to meet the requirements of…

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1607

Abstract

Industrial restructuring has led to increasing obsolescence of old industrial properties in many cities. Transformation of these properties to meet the requirements of modern industrial operations is becoming an imminent task for property managers and industrial landowners. This paper reviews the experience of the private sector in restructuring obsolete industrial properties in Hong Kong. In particular, we focus our discussions on a recent market initiative (composite industrial‐office property development in Hong Kong) as an innovative attempt to make better use of urban industrial space. We argue that this new property type has not been successful because of the institutional constraints imposed under the planning policy. It again confirms that the industrial property market is characterized by market imperfection, owing largely to government policies, which precludes a smooth market adjustment to respond positively to changing demand. This problem, if allowed to continue, will ultimately damage the competitiveness of the cities.

Details

Property Management, vol. 17 no. 2
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 14 August 2007

John F. McDonald and Yuliya Yurova

The purpose of this paper is to test empirically the extent to which differences in property taxes are capitalized in the market prices of industrial real estate.

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1211

Abstract

Purpose

The purpose of this paper is to test empirically the extent to which differences in property taxes are capitalized in the market prices of industrial real estate.

Design/methodology/approach

This paper is a multiple regression study of the selling prices of 419 industrial properties near O’Hare airport in metropolitan Chicago that were sold during 2001‐2004. The paper also includes a theoretical analysis of the relationship between the property tax rate on industrial property and the tax revenue that is collected.

Findings

The results show that selling price per square foot is a function of property characteristics as expected, and suggest that the property tax differential between Cook County and DuPage County is fully capitalized. The property tax differential was 2.63 per cent of market value, and comparable properties sold for 16.2 per cent less in Cook County than in adjacent DuPage County. The theoretical analysis shows that the revenue‐maximizing property tax rate in the long run depends upon the capitalization rate, the elasticity of demand for industrial real estate, and the elasticity of supply of industrial real estate.

Research limitations/implications

The data pertain only to the area near O’Hare airport for the years 2001‐2004. Additional empirical tests are needed in other places and for other time periods. Also, the impact of public services on the value of industrial property needs to be investigated.

Practical implications

Appraisers of industrial real estate should adjust estimates of market value for differences in property taxes. Buyers and sellers of industrial real estate should also be cognizant of the effect of property taxes on market value. Local public officials should be aware of the possibility that a relatively high tax rate on industrial property can cause tax revenue collected to be less than the maximum amount that is possible.

Originality/value

This is the first empirical study of industrial property values that includes the effect of variations in the property tax.

Details

Review of Accounting and Finance, vol. 6 no. 3
Type: Research Article
ISSN: 1475-7702

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Article
Publication date: 1 March 1991

J. Henneberry

Considers the interrelationships between manufacturing firms andtheir accommodation in the rented sector of the industrial propertymarket. Discusses the implications for…

Abstract

Considers the interrelationships between manufacturing firms and their accommodation in the rented sector of the industrial property market. Discusses the implications for the industry of the growth of the rented sector, and outlines three analytical approaches to an understanding of firm‐property interrelationships: industry‐based analysis, behavioural analysis, and life‐cycle theory. Concludes that the increasing importance of rented industrial property has highlighted the need for a better understanding of the firm‐property interrelationship, three approaches to which have been outlined above.

Details

Property Management, vol. 9 no. 3
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 1 August 2005

Catherine Jackson and Michael White

The industrial property market has traditionally been under‐researched but, in recent years, studies have ranged from examining rental change at the national level to…

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2049

Abstract

Purpose

The industrial property market has traditionally been under‐researched but, in recent years, studies have ranged from examining rental change at the national level to examining supply factors at the local level. These studies are valuable to the real estate community, but there still remain significant gaps. This paper aims to focus on two of these inter‐related gaps. The interaction between inflation and rental change has been largely overlooked at all levels of data aggregation. Further, the relative importance of national factors, and regional and local factors, in rental determination has also been ignored.

Design/methodology/approach

National and regional long‐run time series models are estimated accounting for the impact of inflation on real rents, using approaches adopted in macro‐economic consumption function analyses. The statistical validity of these models is confirmed from co‐integration tests. Local level spatio‐temporal rental changes are then examined using the hierarchical method of cluster analysis.

Findings

This paper finds that, at national and regional levels, inflation reduces real industrial rents. National regional and local factors are all found to be important in governing rental change in local markets. This implies that factors operating on all spatial scales must be considered in rental studies.

Originality/value

This paper combines two methodological approaches to examine the interaction between inflation and rental change, and the relative importance of national, regional and local factors in rental determination. The results suggest that factors operating on all spatial scales should be considered in rental studies.

Details

Journal of Property Investment & Finance, vol. 23 no. 4
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 1 December 2005

Bob Thompson

The purpose of this is to paper discuss the impact of information and communications technology (ICT) upon the industrial property sector through the identification of…

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1897

Abstract

Purpose

The purpose of this is to paper discuss the impact of information and communications technology (ICT) upon the industrial property sector through the identification of observable trends now and in the near future. The paper looks at the current ICT influences on industrial property, highlighting the nature of the impact and its implications for the sector.

Design/methodology/approach

The paper draws upon the authors own experience of the industrial and IT sectors to isolate key technologies and resulting changes in the drivers of industrial property.

Research limitations/implications

The focus of this paper is on demand side factors that affect the supply of an industrial product. The impact of ICT upon the efficiency and operation of industrial facilities themselves is excluded.

Practical implications

Through the facilitation of changes in occupational demand, ICT has had a dramatic effect upon the industrial property sector over the last 30 years, changing the paradigms of location, structure and configuration beyond recognition.

Originality/value

The industrial property sector does often feature in discussions of the impact of ICT upon property generally. Yet of all the types of property, arguably industrial has seen the biggest quantum change over time facilitated by ICT. This article adds value to that debate through highlighting this fact.

Details

Journal of Property Investment & Finance, vol. 23 no. 6
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 1 August 2005

Stephen Roulac, Alastair Adair, Stanley McGreal, Jim Berry, Louise Brown and George Heaney

Seeks to explore recent studies in corporate real estate and to provide a comparative analysis of industrial corporations in Ireland and those in the non‐industrial sector…

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4571

Abstract

Purpose

Seeks to explore recent studies in corporate real estate and to provide a comparative analysis of industrial corporations in Ireland and those in the non‐industrial sector with respect to their corporate real estate management objectives.

Design/methodology/approach

The empirical investigation reports on a study undertaken in Ireland and compares results from companies in the industrial sector with companies in the non‐industrial sector. The methodology is based on a behavioural questionnaire targeted at the top 150 companies operating in Ireland and classified on the basis of number of employees.

Findings

The findings indicate that significant differences are apparent between companies in the industrial sector and companies not in the industrial sector in the use of real estate assets. In particular companies in the industrial/manufacturing sectors have weakly developed corporate real estate strategies.

Research limitations/implications

The main limitations derive from a relatively small sample size, a function of targeting the survey at senior executives. There are implications for companies in the under‐utilisation of real estate assets and the effects of this on corporate balance‐sheets requires further investigation.

Originality/value

Highlights that companies in Ireland, notably those in the industrial sector, have some significant way to go in utilising their corporate real estate assets more effectively.

Details

Journal of Property Investment & Finance, vol. 23 no. 4
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 1 August 2006

Tracey West and Andrew C Worthington

This paper employs a Generalised Autoregressive Conditional Heteroske‐dasticity in Mean (GARCH‐M) model to consider the effect of macroeconomic factors on Australian…

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851

Abstract

This paper employs a Generalised Autoregressive Conditional Heteroske‐dasticity in Mean (GARCH‐M) model to consider the effect of macroeconomic factors on Australian property returns over the period 1985 to 2002. Three direct (office, retail and industrial property) and two indirect (listed property trust and property stock) returns are included in the analysis, along with market returns, short, medium and long‐term interest rates, expected and unexpected inflation, construction activity and industrial employment and production. In general, macroeconomic factors are found to be significant risk factors in Australian commercial property returns. However, the results also indicate that forecast accuracy in these models is higher for direct office, listed property trust and property stock returns and that the persistence of volatility shocks varies across the different markets, with volatility half lives of between five and seven months for direct retail and industrial property, two and three months for direct office property and less than two months with both forms of indirect property investment.

Details

Journal of Financial Management of Property and Construction, vol. 11 no. 2
Type: Research Article
ISSN: 1366-4387

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Article
Publication date: 1 January 1989

G. Cook

Examines why many local authorities have become involved inindustrial property initiatives since the mid‐1970s and the range ofinitiatives offered, and how these are…

Abstract

Examines why many local authorities have become involved in industrial property initiatives since the mid‐1970s and the range of initiatives offered, and how these are finance – DoE urban programme, various grants and EC assistance. Concludes that property‐based initiatives are likely to endure since they retain industrial production in inner cities, although the increasingly market‐oriented approach of local authorities makes the impact of such initiatives hard to control.

Details

Property Management, vol. 7 no. 1
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 1 April 1991

John Henneberry

Reports on a study examining the interrelationships betweenmanufacturing firms and their accommodation in the rented sector of theindustrial property market and conducted…

Abstract

Reports on a study examining the interrelationships between manufacturing firms and their accommodation in the rented sector of the industrial property market and conducted among occupiers of rented and industrial property. Discusses occupier satisfaction with rented industrial property. Discusses occupier satisfaction with rented industrial property and the causes of occupier dissatisfaction. Emphasizes the complex pattern of relationships between firms and their buildings.

Details

Property Management, vol. 9 no. 4
Type: Research Article
ISSN: 0263-7472

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