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Open Access
Article
Publication date: 22 January 2024

Rens van Overbeek, Farley Ishaak, Ellen Geurts and Hilde Remøy

This study examines the relationship between environmental building certification Building Research Establishment Environmental Assessment Method (BREEAM-NL) and office rents in…

Abstract

Purpose

This study examines the relationship between environmental building certification Building Research Establishment Environmental Assessment Method (BREEAM-NL) and office rents in the Dutch office market.

Design/methodology/approach

A hedonic price model was used to assess the impact of BREEAM certification on office rents. The study is based on 4,355 rent transactions in the period 2015 to mid-2022, in which 331 transactions took place in certified office buildings and 4,024 transactions in non-certified office buildings.

Findings

The results provide empirical evidence on quantitative economic benefits of BREEAM-certified offices in the Netherlands. After controlling for all important office rent determinants, the results show a rental premium for certified office buildings of 10.3% on average. The green premiums highly differ across submarkets and vary between 5.1 and 12.6% in the five largest Dutch cities. Additionally, the results show significant positive correlation between BREEAM-NL label score and rents, whereby better performing buildings generally command higher rents.

Originality/value

The study contributes to the current literature on green building economics by providing, as one of the first, empirical evidence on the existence of financial benefits for BREEAM-certified office buildings in the Dutch office market.

Details

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

Keywords

Open Access
Article
Publication date: 17 November 2023

Temitope Abraham Ajayi

This study aims to investigate the effects of mineral rents, conflict and population growth on countries' growth, with a specific interest in 13 selected economies in Sub-Saharan…

Abstract

Purpose

This study aims to investigate the effects of mineral rents, conflict and population growth on countries' growth, with a specific interest in 13 selected economies in Sub-Saharan Africa.

Design/methodology/approach

This paper uses a combination of research methods: the pooled ordinary least squares (OLS), the fixed effect and the system generalized method of moment (GMM). The consistent estimator (system GMM), which provides the paper's empirical findings, remedies the inherent endogeneity bias in the model formulation. The utilized panel dataset for the study spans from 1980 to 2022.

Findings

The study suggests that mineral rents positively affect countries' growth by about 0.407 percentage points in the short run. The study further demonstrates the long-run negative impacts of population growth rates and prevalence of civil war on economic growth. The empirical work of the study reveals that an increase in the number of international borders within the group promotes mineral conflicts, which impedes economic growth. Evidence from the specification tests performed in the study confirmed the validity of the empirical results.

Social implications

Mineral rents, if well managed and conditioned on good institutions, are a blessing to an economy, contrary to the assumptions that mineral resources are a curse. The utilization of mineral rents in Sub-Saharan Africa for economic growth depends on several factors, notably the level of mineral conflicts, population growth rates, institutional factors and the ability to contain civil war, among others.

Originality/value

This study is the first attempt in the post-coronavirus disease 2019 (COVID-19) era to revisit the investigation of the impacts of mineral rents, conflict and population growth rates on the countries' growth while controlling for the potential implications of the qualities of institutions. One of the significant contributions of the study is the identification of high population growth rates as one of the primary drivers of mineral conflicts that impede economic growth in the states with enormous mineral deposits in Sub-Saharan Africa. The crucial inference drawn from the study is that mineral rents positively impact countries' growth, even with inherent institutional challenges, although the results could be better with good institutions.

Details

Journal of Economics and Development, vol. 26 no. 1
Type: Research Article
ISSN: 1859-0020

Keywords

Open Access
Article
Publication date: 18 July 2023

Berndt Allan Lundgren, Cecilia Hermansson, Filip Gyllenberg and Johan Koppfeldt

The purpose is to increase knowledge of rent negotiations by investigating differences in beliefs held by property landlords and retailers on factors that they deem important in…

Abstract

Purpose

The purpose is to increase knowledge of rent negotiations by investigating differences in beliefs held by property landlords and retailers on factors that they deem important in rent negotiation.

Design/methodology/approach

This study investigates differences in subjective beliefs held by landlords and retail trade tenants on factors that affect rent levels during the rent negotiation process using a factor analysis approach. Semi-structured interviews were made with seven large real estate owners/landlords and retailers and eight experts in negotiating retail rent to elicit variables that have an impact on retail rent. Thereafter, a web-based survey was sent to 421 respondents who had experience in rent negotiation. Several factors were extracted using factor analysis. The data collection was made in Sweden during the coronavirus disease 2019 (COVID-19) pandemic in late spring 2021

Findings

Significant differences are found in beliefs held by landlords and retail trade tenants in four out of seven-factor: regional growth, e-commerce, customer focus and trust. Landlords rate these factors higher than retailers do. There are also systematic differences between landlords and retailers depending on their education levels on the following factors: rent and vacancies, e-commerce and customer focus. The number of years of experience did not prove to be significant instead differences are found to exist in factors

Research limitations/implications

Not only do traditional factors of importance, such as lease structure, the effect of location, size and anchor or non-anchor tenants, have an effect on negotiated rent levels. Differences in other factors also exist, such as regional growth, e-commerce, customer focus and trust factors that may play an important role in the negation of retail rent.

Practical implications

The findings provide new insights into the different views on factors that affect rent negotiations between landlords and retail tenants. Knowledge of such differences may increase the overall transparency in the negotiation process. Transparency may be increased by putting forward information on these factors before a negotiation takes place, in order to smooth differences in their beliefs.

Social implications

If transparency in the negotiation process of retail rent increases, time to reach an agreement, stress and anxiety can be reduced by putting forward information on factors where differences exist between landlords and retailers

Originality/value

New insights on retail rent negotiation have been put forward in this research paper. Not only do traditional factors such as lease structure matters, but subjective beliefs on factors such as regional growth and the level of education are also important, as this study has shown using a factors analysis approach.

Details

Journal of European Real Estate Research, vol. 16 no. 2
Type: Research Article
ISSN: 1753-9269

Keywords

Open Access
Article
Publication date: 7 April 2023

Eva Seewald, Samantha Baerthel and Trung Thanh Nguyen

This study aims to investigate whether the participation in land rental markets helps to mitigate impacts by climate change on multidimensional poverty in Thailand and Vietnam.

Abstract

Purpose

This study aims to investigate whether the participation in land rental markets helps to mitigate impacts by climate change on multidimensional poverty in Thailand and Vietnam.

Design/methodology/approach

The authors use precipitation data from the National Aeronautics and Space Administration (NASA) and self-reported shocks from the Thailand Vietnam Socio-Economic Panel (TVSEP) project to estimate climate change. Data from the TVSEP are also used to calculate a multidimensional poverty index (MPI). Fixed-effect logit panel regressions with interaction terms are implemented to analyze the above mentioned.

Findings

The results show that land rental markets are used as mitigation strategies to climate change in Thailand and Vietnam. The participation in land rental markets also reduces multidimensional poverty. However, as a mitigation strategy, land rental markets are only successful in certain circumstances.

Research limitations/implications

The results show that there is potential in using land rental markets as mitigation strategies to climate change. Further research is needed to better understand which adaptation strategies, besides land rental market participation, and which combinations of different adaptation strategies are successful to mitigate negative effects induced by climate change.

Practical implications

The results show that there is potential in using land rental markets as mitigation strategies to climate change. Therefore, education in the participation in land rental markets and how to use them as a mitigation strategy can be a way to increase households' resilience to negative effects induced by climate change. Households make better decisions regarding their land when they are better informed on the functionality of land rental markets. Additionally, being better informed increases self-confidence to participate in land-rental markets.

Originality/value

Land rental markets as a mitigation strategy to climate change rarely have been studied, and if so, mainly the effect of leasing land has been studied. Additionally, the authors implement new measures of poverty – a multidimensional view on poverty which provides new insights into who are the poor and how they can be lift out of poverty.

Details

Journal of Economics and Development, vol. 25 no. 2
Type: Research Article
ISSN: 1859-0020

Keywords

Open Access
Article
Publication date: 22 February 2022

Fisayo Fagbemi and Richard Angelous Kotey

The paper assesses the role of natural resource rents in Nigeria's economy through the channel of institutional quality.

1160

Abstract

Purpose

The paper assesses the role of natural resource rents in Nigeria's economy through the channel of institutional quality.

Design/methodology/approach

The analysis is done with the use of autoregressive-distributed lag (ARDL) bounds testing approach to cointegration, vector error correction model (VECM), Granger causality test and cointegrating regression over the period 1996–2019.

Findings

Findings support the notion that overreliance on natural resources could exacerbate the growing number of dysfunctional economic outcomes in the country. The study confirms that a mix of weak governance quality and natural resource rents could have a negligible effect on economic growth and possible retardation impact on the economy in the long run as well as in the short run. The evidence further reveals that there is unidirectional causality running from the interaction term to growth, suggesting that growth trajectory could be jointly determined by natural resource rents and the quality of institutions.

Originality/value

The divergent arguments associated with the mechanisms of resource curse in each of the resource-rich countries offer ample support for the contention that economic outcomes in resource-abundant states may not be a product of resource windfalls per se, but rather the quality of governance or ownership structure. Hence, the ultimate aim of the analysis is to further understanding on the link between resource rents and growth in Nigeria via governance channel.

Details

PSU Research Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2399-1747

Keywords

Open Access
Article
Publication date: 2 June 2022

Hiroki Baba and Chihiro Shimizu

This study aims to explore the spatial externalities of apartment vacancy rates on housing rent by considering multiple vacancy durations.

1331

Abstract

Purpose

This study aims to explore the spatial externalities of apartment vacancy rates on housing rent by considering multiple vacancy durations.

Design/methodology/approach

This research uses smart meter data to measure unobservable vacant houses. This study made a significant contribution by applying building-level smart meter data to housing market analysis. It examined whether vacancy duration significantly affected apartment rent and whether the relationship between apartment rent and vacancy rate differed depending on the level of housing rent.

Findings

The primary finding indicates that there is a significant negative correlation between apartment rent and vacancy duration. Considering the spatial externalities of apartment vacancy rates, the apartment vacancy rates of surrounding buildings did not show any statistical significance. Moreover, quantile regression results indicate that although the bottom 10% of apartment rent levels showed a negative correlation with all vacancy durations, the top 10% showed no statistical significance related to vacancies.

Practical implications

This study measures the extent of spatial externalities that can differentiate taxation based on housing vacancies.

Originality/value

The findings indicate that landlords have asymmetric information about their buildings compared with the surrounding buildings, and the extent to which price adjusts for long-term vacancies differs depending on the level of apartment rent.

Details

International Journal of Housing Markets and Analysis, vol. 16 no. 7
Type: Research Article
ISSN: 1753-8270

Keywords

Content available
Article
Publication date: 27 August 2021

André Kallåk Anundsen, Christian Bjørland and Marius Hagen

Commonly used rent indices are based on average developments or expert opinions. Such indices often suffer from compositional biases or low data coverage. The purpose of this…

Abstract

Purpose

Commonly used rent indices are based on average developments or expert opinions. Such indices often suffer from compositional biases or low data coverage. The purpose of this paper is to overcome these challenges using the authors' approach.

Design/methodology/approach

The authors construct a quality-adjusted rent index for the office market in Oslo using detailed data from 14,171 rental contracts.

Findings

The authors show that compositional biases can have a large impact on rental price developments. By adding building-fixed effects to a standard hedonic regression model, the authors show that the explanatory power increases considerably. Furthermore, indices excluding location-specific information, or which include less granular location controls than at the building level, portray quite a different picture of rent developments than indices that do take this into account. The authors also exploit information on contract signature date and find that a more timely detection of turning points can be achieved by using the signature date instead of the more typically used start date of the lease.

Research limitations/implications

The study is confined to Norwegian data, and an avenue for future research would be to explore if similar results are obtained for other countries. A weakness with the paper is that authors' do not observe quality changes over time, such as renovation. Controlling for time-varying and unit-specific attributes in hedonic models for the commercial real estate (CRE) market would be useful to purge indices further for compositional effects and unobserved heterogeneity. While the authors do control for building-fixed effects, there are additional variations within a building (floor, view, sunlight, etc.) that the authors do not capture. Studies that could control for this would certainly be welcome, both in order to estimate the value of such amenities and to see how it affects estimated rent developments. Another promising avenue for future research is to link data on rental contracts in the CRE market with firm-specific information in order to explore how firm profitability and liquidity may affect rental contracts.

Practical implications

The authors show that the hedonic index yields a sharper fall in rents after the global financial crisis and more muted developments in the period between 2013 and 2015 than the average rent index. The results show that rents have followed their estimated equilibrium closely and have re-adjusted quickly in periods of deviation. From a financial stability perspective, the risk of a sharp fall in rents is reduced because rents often are in line with their fundamentals.

Social implications

The authors find that a more timely detection of turning points can be achieved by using information on the signature date. This is an important finding. The financial system is heavily exposed toward CRE, and timely detection of turning points is critical for policymakers.

Originality/value

The financial system is heavily exposed toward the commercial real estate market and timely detection of turning points is of major importance to policymakers. Finally, the authors use our quality-adjusted rent index as the dependent variable in an error correction model. The authors find that employment and stock of offices are important explanatory variables. Moreover, the results show that rents have followed their estimated equilibrium path.

Details

Journal of European Real Estate Research, vol. 15 no. 2
Type: Research Article
ISSN: 1753-9269

Keywords

Open Access
Article
Publication date: 22 December 2020

Jie Meng and Fenghua Wu

As a crucial institutional form established since the Chinese economic reform, the system of competitive local governments has been shaping the characteristics of China's…

1002

Abstract

Purpose

As a crucial institutional form established since the Chinese economic reform, the system of competitive local governments has been shaping the characteristics of China's socialist market economy to a considerable degree.

Design/methodology/approach

This study not only adopts the view of existing studies that attribute the economic motive of local governments to rent and consider land public finance as a means through which local governments carry out strategic investment but also attempts to further develop the view within a Marxist analytical framework.

Findings

As a result, the local governments have helped to maintain an incredibly high investment rate over a considerable period of time, facilitating the continuous, rapid growth of the Chinese economy.

Originality/value

This study concludes that China's local governments function as the productive allocator and user of rent in the strategic investment based on land public finance and thereby embed themselves in the relative surplus-value production initially arising from competition amongst enterprises, forming the dual structure of relative surplus-value production unique to China's economy.

Details

China Political Economy, vol. 3 no. 2
Type: Research Article
ISSN: 2516-1652

Keywords

Open Access
Article
Publication date: 12 April 2022

Peter Karpestam

This paper aims to test two hypotheses related to the supposedly negative impact of rent control on residential mobility: the mobility of renters is, first, negatively related to…

1676

Abstract

Purpose

This paper aims to test two hypotheses related to the supposedly negative impact of rent control on residential mobility: the mobility of renters is, first, negatively related to how attractive their residential areas are and, second, relatively high for renters living in properties built after 2005.

Design/methodology/approach

This paper estimates logit and multinomial logit regressions and models household moves. The multinomial logit regressions separate between short- and long-distance moves and between moves to rentals and to owned dwellings. This paper uses the “relative income” of the tenants’ residential areas to proxy area attractiveness. This paper estimates regressions for entire Sweden and the three largest “commuting” regions and municipalities, respectively.

Findings

The full sample provides support of both hypotheses in all regressions. Hypothesis one gets stronger support for moves to other rentals than moves to owned dwellings but about equally strong support for short- and long-distance moves. Hypothesis one obtains strongest support in Gothenburg municipality while hypothesis two obtains strongest support in the Malmö region. Also, hypothesis two obtains stronger support for short-distance moves than long-distance moves and slightly stronger support for moves to owned dwellings than those to rented dwellings.

Research limitations/implications

This paper does not estimate “how much” rent control affects mobility, and results cannot be used to design specific rent setting policies. Results may be sensitive to how different types of moves are defined.

Practical implications

Efforts to reform rent setting policies in Sweden are encouraged.

Originality/value

To the best of the author’s knowledge, this paper’s two hypotheses are not tested before in Sweden and can be tested without control groups.

Details

International Journal of Housing Markets and Analysis, vol. 16 no. 7
Type: Research Article
ISSN: 1753-8270

Keywords

Open Access
Article
Publication date: 3 April 2019

Mohammad Omar Farooq

The purpose of this paper is to explore the concept of rent-seeking behaviour and rentier state in the context of ẓulm (injustice and exploitation), which is one of the key…

2701

Abstract

Purpose

The purpose of this paper is to explore the concept of rent-seeking behaviour and rentier state in the context of ẓulm (injustice and exploitation), which is one of the key concerns in Islam in general and Islamic economics and finance in particular.

Design/methodology/approach

As a conceptual paper, it draws on the literature of rent-seeking as part of public choice theory and examines the potential vulnerabilities as well as existence of rent-seeking in Muslim-majority countries, where Islamic finance industry primarily operates.

Findings

The paper identifies several areas where both actual and potential rent-seeking exists.

Research limitations/implications

The paper is conceptual. Based on the analysis presented here further studies can be undertaken to determine the scope of rent-seeking and their impact in Muslim-majority societies.

Practical implications

Incorporating rent-seeking in the theoretical and conceptual framework of Islamic economics and finance can enhance understanding about ẓulm and its ubiquitous presence, as Islam has a firm stance to aspire to have a ẓulm-free society.

Social implications

Understanding rent-seeking behaviour can help appreciate why corruption, inequality and poverty are so entrenched, and why limiting the discourse to ribā (interest) ignores the broader scope of injustice and exploitation.

Originality/value

This might be the first focused paper that conceptually deals with rent-seeking behaviour, connecting the discourse about ribā-interest equation.

Details

ISRA International Journal of Islamic Finance, vol. 11 no. 1
Type: Research Article
ISSN: 0128-1976

Keywords

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