Journal of Property Investment & Finance

Issue Number

Latest documents

• Guest editorial: Sustainability and climate change; the challenge ahead. With dedication to Sarah Sayce
• Guest editorial: Sustainability and climate change; the challenge ahead. With dedication to Sarah Sayce
• Climate risks and their implications for commercial property valuations

  Purpose: The authors outline a framework that captures the channels through which physical climate risks could affect cash flows and pricing of income-producing real estate. This facilitates detailed consideration of how the future performance of real estate investments could be affected by such risks. Design/methodology/approach: This is a literature-based investigation that draws on work commissioned by UNEP-FI (Clayton et al., 2021a, b). It extends this work to consider in more detail the channels through which climate risks may impact property performance and the implications for the valuation community. Findings: Recent empirical studies have identified more instances where pricing is reflecting both current and anticipated climate risks. Market valuations cannot properly incorporate climate risk without clear evidence that it is priced by market participants, but valuers can advise clients on the potential for future impacts. Research limitations/implications: While inferences can be made from studies of residential real estate, more research on commercial real estate pricing and climate risk is required to assist valuers and their clients, as well as other stakeholders in the real estate market. Practical implications: Differences between a Market Value and an Investment Value context are considered, and how valuers could and should account for climate risk in each setting is discussed with reference to existing professional standards and guidance. Originality/value: The article synthesises a wide range of literature to produce a framework for the channels by which real estate values could be influenced by climate risk.

• Climate risks and their implications for commercial property valuations

  Purpose: The authors outline a framework that captures the channels through which physical climate risks could affect cash flows and pricing of income-producing real estate. This facilitates detailed consideration of how the future performance of real estate investments could be affected by such risks. Design/methodology/approach: This is a literature-based investigation that draws on work commissioned by UNEP-FI (Clayton et al., 2021a, b). It extends this work to consider in more detail the channels through which climate risks may impact property performance and the implications for the valuation community. Findings: Recent empirical studies have identified more instances where pricing is reflecting both current and anticipated climate risks. Market valuations cannot properly incorporate climate risk without clear evidence that it is priced by market participants, but valuers can advise clients on the potential for future impacts. Research limitations/implications: While inferences can be made from studies of residential real estate, more research on commercial real estate pricing and climate risk is required to assist valuers and their clients, as well as other stakeholders in the real estate market. Practical implications: Differences between a Market Value and an Investment Value context are considered, and how valuers could and should account for climate risk in each setting is discussed with reference to existing professional standards and guidance. Originality/value: The article synthesises a wide range of literature to produce a framework for the channels by which real estate values could be influenced by climate risk.

• Editorial: 40 years of the Journal of Property Investment & Finance
• Editorial: 40 years of the Journal of Property Investment & Finance
• The increasing importance of environmental sustainability in global real estate investment markets

  Purpose: Within the context of ESG (Environment, Social and Governance), environmental sustainability has taken on increased global importance in recent years. Similarly, real estate investment managers in developing their global real estate investment portfolios need a fuller understanding of the ESG and environmental sustainability dimensions of these global real estate markets for more informed real estate investment decisions. Using the JLL GRETI sustainability sub-index, this paper examines the environmental sustainability transparency status of 99 global real estate markets over 2016–2020 and explores various strategic issues regarding ESG and environmental sustainability; particularly the critical issues relating to climate risk mitigation, climate resilience and zero-carbon. The current status of environmental sustainability in these 99 real estate markets is assessed, with areas for “best practice” improvement identified to the benefit of real estate investment managers; particularly the improvements needed in ESG to support real estate investment in the emerging real estate markets. Design/methodology/approach: The JLL GRETI sustainability sub-index is analysed to examine strategic issues relating to environmental sustainability transparency. 99 real estate markets are assessed globally for a range of critical ESG issues over 2016–2020. Differences between the developed and emerging real estate markets are highlighted. Findings: Considerable variation was seen in the ESG and environmental sustainability practices, procedures and frameworks across these 99 real estate markets. This was particularly evident amongst the emerging real estate markets. Compared to the other five dimensions for real estate market transparency, environmental sustainability was seen to be well behind these other dimensions in most markets. Progress has been made in recent years, but it has been slow and steady rather than at a dynamic level. Clearly, more is needed globally to enhance the stature of environmental sustainability in the context of an increasing focus on ESG and specifically on climate risk mitigation, climate resilience and zero-carbon in real estate investment. Practical implications: With ESG and environmental sustainability taking on increased importance across the international real estate markets, it is important that real estate fund managers have a full understanding of the ESG and environmental sustainability status of these real estate markets where they may be considering real estate investment opportunities; this includes both the developed and emerging real estate markets. This is essential to ensure future capital raising for new funds, as well as supporting the global ESG agenda by the real estate investment community. Specific strategies are also identified for emerging real estate markets to improve their environmental sustainability practices and ESG status. Originality/value: This is the first paper to use the JLL GRETI sustainability sub-index to assess the environmental sustainability status of 99 real estate markets globally; providing strategic insights for real estate investment managers as they develop their global real estate portfolios and more fully embrace the challenges of ESG and environmental sustainability in the real estate space going forward. Specific strategies are clearly identified for all markets to improve their environmental sustainability ratings to the benefit of both global real estate investment and the broader communities.

• The increasing importance of environmental sustainability in global real estate investment markets

  Purpose: Within the context of ESG (Environment, Social and Governance), environmental sustainability has taken on increased global importance in recent years. Similarly, real estate investment managers in developing their global real estate investment portfolios need a fuller understanding of the ESG and environmental sustainability dimensions of these global real estate markets for more informed real estate investment decisions. Using the JLL GRETI sustainability sub-index, this paper examines the environmental sustainability transparency status of 99 global real estate markets over 2016–2020 and explores various strategic issues regarding ESG and environmental sustainability; particularly the critical issues relating to climate risk mitigation, climate resilience and zero-carbon. The current status of environmental sustainability in these 99 real estate markets is assessed, with areas for “best practice” improvement identified to the benefit of real estate investment managers; particularly the improvements needed in ESG to support real estate investment in the emerging real estate markets. Design/methodology/approach: The JLL GRETI sustainability sub-index is analysed to examine strategic issues relating to environmental sustainability transparency. 99 real estate markets are assessed globally for a range of critical ESG issues over 2016–2020. Differences between the developed and emerging real estate markets are highlighted. Findings: Considerable variation was seen in the ESG and environmental sustainability practices, procedures and frameworks across these 99 real estate markets. This was particularly evident amongst the emerging real estate markets. Compared to the other five dimensions for real estate market transparency, environmental sustainability was seen to be well behind these other dimensions in most markets. Progress has been made in recent years, but it has been slow and steady rather than at a dynamic level. Clearly, more is needed globally to enhance the stature of environmental sustainability in the context of an increasing focus on ESG and specifically on climate risk mitigation, climate resilience and zero-carbon in real estate investment. Practical implications: With ESG and environmental sustainability taking on increased importance across the international real estate markets, it is important that real estate fund managers have a full understanding of the ESG and environmental sustainability status of these real estate markets where they may be considering real estate investment opportunities; this includes both the developed and emerging real estate markets. This is essential to ensure future capital raising for new funds, as well as supporting the global ESG agenda by the real estate investment community. Specific strategies are also identified for emerging real estate markets to improve their environmental sustainability practices and ESG status. Originality/value: This is the first paper to use the JLL GRETI sustainability sub-index to assess the environmental sustainability status of 99 real estate markets globally; providing strategic insights for real estate investment managers as they develop their global real estate portfolios and more fully embrace the challenges of ESG and environmental sustainability in the real estate space going forward. Specific strategies are clearly identified for all markets to improve their environmental sustainability ratings to the benefit of both global real estate investment and the broader communities.

• Cash flows or cap rates?
• Cash flows or cap rates?

Featured documents

• A comparison of the forecasting ability of ARIMA models

  Purpose: ARIMA models have been extensively examined in the context of the real estate market. The purpose of this paper is to examine issues relating to their application in a forecasting context. Specifically, the paper seeks to examine whether in‐sample measures of best‐fit and also past...

• Stigma assessment: the case of a remediated contaminated site

  The “stigma” associated with remediated contaminated land is the blighting effect on property value caused by perceived risk and uncertainty. Uncertainties relate to negative intangible factors such as the inability to effect a total “cure”, the risk of failure of the remediation method, the risk...

• Time‐varying performance of four Asia‐Pacific REITs

  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...

• Property Finance: An International Approach
• The concept of market value in thin markets and its implications for international accounting rules (IFRS)

  Purpose: The purpose of this paper is to discuss how the concepts market value (MV) and exit price should be interpreted in thin markets and how accounting rules may need to change to take this into account. Design/methodology/approach: This is a conceptual paper using hypothetical examples as a...

• The valuation of sustainability
• Compulsory purchase and compensation update – 2015

  Purpose: – The purpose of this paper is to provide a summary and analysis of recent legal decisions relating to compensation for compulsory purchase. Design/methodology/approach: – The paper summarises three important decisions and provide a critical assessment of each of them. Findings: – These...

• The influence of real estate risk on market volatility

  Purpose: The purpose of this paper is to investigate the causal relationship between risk experienced within the real estate industry and that of the overall market in the UK context. The motivation behind this research is to investigate whether the real estate sector transmits risk to the wider...

• Mass valuations

  Purpose: – The purpose of this paper is to review the issues involved in the implementation of mass valuation systems and the conditions needed for doing so. Design/methodology/approach: – The method makes use of case studies of and fieldwork in countries that have either recently introduced mass...

• Betterment: a taxing problem

  Purpose: The purpose of this paper is to review the issues involved in land value taxation and betterment and the issues involved in apportioning value between land and improvements. Design/methodology/approach: The theoretical and valuation issues in betterment are reviewed and a case study of a...