Commercial Investment Research Articles

Location density, systematic risk, and cap rates: Evidence from REITs

AbstractA property's location is often considered to be the ultimate determinant of its investment performance. But how exactly does a property's location influence its risk and return? We focus on the effects of location density on the risk and return of commercial real estate investments. We do this by studying the geographical characteristics of the property portfolios of U.S. equity Real Estate Investment Trusts (REITs). We show that REITs with property holdings in high‐density locations experience higher rental growth and carry higher systematic risk than their otherwise comparable peers in low‐density locations. Consistent with those higher rental growth rates, high‐density REITs also have lower implied cap rates. Our results suggest that location density is an important determinant of REIT performance outcomes, implying that geographical characteristics can drive investment risk and return across commercial real estate markets.

The political-economy of land acquisition and privatization of Birr and Ayehu Farms in Amhara Region, North-West Ethiopia

The recognition of commercial agricultural investment led to the expansion of large-scale farms through eviction of farmers during the Derg and Ethiopian People Revolutionary Democratic Front (EPRDF) regimes. But anti-dispossession voices and investment driven violence have frequently occurred in post-Derg Ethiopia. This study thus attempts to uncover the political-economy of land acquisition and privatization of Birr and Ayehu farms. The necessary data for the study were collected through interview, questionnaire, focused group discussion and document review. The data collected through questionnaire was analyzed using descriptive statistics and the qualitative data was analyzed thematically. The findings of the study indicated that the farms were began during the Derg regime as public enterprises, and later privatized to Ethio-Agri-CEFT in a neo-patrimonial modality with a gigantic trend of land acquisition, legal distortion and violation of landholding rights. This poor and neo-patrimonial operation of farms jeopardized local livelihoods, created land use change and evoked stiff public grievance, political upheaval and polarized state–society relations. This indicated that the expansion of farms have brought lopsided development to party affiliated investors by dismantling local livelihoods. Ethio Agri-CEFT thus should respect legal frameworks and adopt inclusive developmental practices for its sustainability and success.

Coworking space practices: assessing space users’ preferences and challenges in Ibadan, Nigeria

PurposeCoworking spaces are recent developments in commercial property investment portfolio in Nigeria. Given the user-centered nature of coworking space practices, the purpose of this paper is to examine the factors influencing users’ preference for coworking, and the challenges associated with the use of coworking spaces in the emerging Nigeria property market.Design/methodology/approachThis study used a quantitative research approach. This study sampled nine (9) traditional coworking spaces in Ibadan property market, from which 15 coworking space users were randomly selected in each of the coworking hubs. From a total of 135 respondents, only 45 (33.33%) questionnaires were retrieved and found suitable for analysis. The data collected were analyzed using descriptive and inferential statistics.FindingsThe results showed that economic and social motivators were significant drivers influencing coworkers’ decision to cowork. Personal factors were the least rated. Also, top-rated features/facilities that users prefer in the workstations include a neat environment and conveniences, uninterrupted power supply, serenity of the neighborhood and ease of signing up. The findings also showed that the challenges being faced by the users were predominantly about disturbance/noise from guests and/or other users, lack of privacy, poor internet connectivity, power failure and inability to personalize workspace (in decreasing order).Practical implicationsThis study has implications for investors and users of coworking spaces in comparable developing markets. Also, the study will influence strategies and decisions of private firms/companies, as it relates to the work pattern of their employees.Originality/valueThis paper is relevant given the emergent behavioral changes, necessitated by the changing work practices. This compels the need for a reevaluation of the preferences and challenges associated with coworking spaces, especially as it relates to the users of flexible office spaces in emerging economies.

Food Security Sustainability: A Synthesis of the Current Concepts and Empirical Approaches for Meeting SDGs

Currently, food security is becoming a fundamental problem in the global macroeconomic dynamics for policymakers and governments in developing countries. Globally, food security offers challenges both from achieving Sustainable Development Goals (SDGs) targets and the welfare perspective of many poor households. As a result, this study is guided by Neo Malthusian and Access theories to investigate Food Security Sustainability: a Synthesis of the Current Concepts and Empirical Approaches for Meeting SDGs in Nigeria using ARDL and ECM techniques. The ARDL revealed that agricultural value-added and GDP positively affect food security for commercial agrarian investments in Nigeria. However, internal displacement, population growth, food inflation, and exchange rate volatility negatively affect sustainable food security in Nigeria. The model’s coefficient of ECMt−1 also shows negative (−0.0130 approximately) and statistically significant (0.0000) at 1%. Thus, the speed of adjustment requires 1.3% annually for the long-run equilibrium convergence to be restored. The study concludes that the SDGs targets for poverty and hunger reduction, mainly for food security sustainability alongside small producers by the year 2030, can be rarely achieved because the convergence to equilibrium is more than nine years. An active value-addition strategy for sustainable food security and the provision of humanitarian interventions are recommended.

Performance of commercial and residential real estate investments in Ibadan property market, Nigeria

PurposeThis study examined the performance of commercial and residential real estate investments in the Ibadan property market to provide information for investment decisions.Design/methodology/approachThe study used a mixed research design (qualitative and quantitative). Data were obtained employing in-depth interviews with randomly selected sixteen estate surveyors and valuers practising in the Ibadan property market. Data for the study were analysed using the phenomenological thematic content analysis. Similarly, data on rental and capital values were translated to income, capital and holding period returns. The Kwiatkowski–Phillips–Schmidt–Shin (KPSS) and Philip–Perron (PP) models were used for unit root analysis. Ordinary least square (OLS) regression model was used to test for inflation-hedging characteristics, and the Granger causality tests were carried out to analyse the causal relationship between the variables.FindingsThe study revealed that the Ibadan property market is still immature. For the return components, the study found that the Ibadan property market provided mean holding period returns of 10.82%, 14.31 and 8.29% for office, shop and residential property types, respectively. The study also revealed that the selected property types are perverse hedges against inflation. Similarly, the study showed a unidirectional causal relationship between inflation and returns on the selected property types.Practical implicationsResults of this study revealed the peculiar nature of the Ibadan property market; findings from the survey can be used as a guide for investment decisions by foreign and domestic investors. Shrewd investors can take advantage of the high returns provided by the real estate assets in the Ibadan property market (by investing in the property market) to obtain high returns and expand their investment portfolio.Originality/valueThis study is the first to examine, in an eclectic and comparative context, the performance of commercial and residential properties in the Ibadan property market from the perspective of its market maturity level, returns profile, as well as its inflation-hedging characteristics. Findings from the study will equip both individual and institutional investors with valuable information for investment decisions.

MEASURING PERFORMANCE OF RISK-RETURN IN RESIDENTIAL AND COMMERCIAL REAL ESTATE INVESTMENTS IN SOUTH-SOUTH, NIGERIA

The study measures the risk-return performance of residential and commercial real estate investments in South-South, Nigeria from 2009 to 2018. The study adopted the survey research design and purposive sampling technique was used to select estate surveying and valuation firms. Data was analysed using mean total returns, standard deviation and analysis of variance. The test of the first hypothesis indicates that residential real estate investment in Port Harcourt has the highest mean total return and performed better than Calabar and Uyo and implies that total returns of residential real estate investments are significantly different in the study area. For commercial property, Uyo outperformed that of Calabar and Port Harcourt in terms of return. The second hypothesis results indicate that location of property is a significant determinant of risk. The result shows that the mean risk in Port Harcourt for residential real estate investment is significantly different from the risk in Calabar and Uyo. This implies that there is significant difference between risks of residential properties in the study area. For commercial property investment risk, the result shows the risks of investment in offices are higher than shops. For location, Uyo commercial properties produced the highest risk.

A Modified UK Real Value/Short-Cut DCF Model for the Valuation of a Nigerian Sub-Leased Commercial Property

A UK real value/short-cut DCF model that addresses the valuation of geared profit rents generated by sub-let commercial investment properties especially in climes with nationalized land policy has been elusive. This study examines the modification of the extant UK real value/short-cut DCF model for the valuation of head-leased occupancy rights with fixed and non-revisable ground rents pursuant to the provisions of the Nigeria Land Use Act. The model is developed by blending the inputs of the modified rational model with that of the Crosby's real value/short-cut DCF model leading to a valuation model that appears simplified compared to the existing UK contemporary value models. The gearing effect for the hypothetical case of sub-let head-lease occupancy right in Nigeria is manifested as having a diminishing impact of fixed ground rent on profit rent calculation. For the valuation case study involving this hypothetical head-leased occupancy right in Nigeria, it was found that the modified UK real value/short-cut DCF model produced valuation that is identical to those churned out from the full DCF, modified rational, and Crosby's real value/short-cut DCF models. For the same hypothetical case study, less than 1% difference is observed between valuations from the all risks real yield (ARRY) model, which evolved in New Zealand and the valuation produced from the modified UK real value/short-cut DCF model, thereby validating all methods against each other. In consonance with the International Valuation Standards pertaining to income valuation approach, a sustained pedagogy of emerging real value models alongside the extant nominal valuation models is suggested as a way forward. Nevertheless, the modified UK real value/short-cut DCF model is recommended as an alternative to the extant variants of real value and explicit DCF techniques for the valuation of sub-let head-lease occupancy rights with fixed/non-revisable ground rents payable especially in climes with nationalized land policy.

Pension fund investment in commercial real estate: a qualitative analysis of decision-making and investment practices in Brazil

ABSTRACT Existing research has shown that pension funds have been adopting financialized real estate governance models and investment practices more concerned with the short-term risk–return performance of the portfolio. This study of the property portfolios of Brazil’s largest pension funds shows that financialization is a powerful force but does not fully explain pension fund commercial real estate investment and management practices which are strongly predicated upon three guiding principles: (1) an awareness of the constraints posed by pension liabilities; (2) a focus on asset-specific competences to increase returns; and (3) a prioritization of in-house investment management. These practices are, however, challenged by a recent Monetary Board decision to ban direct property investment by pension funds and place their resources at the disposal of the financial industry.

A Bibliometric Survey on Polyisobutylene Manufacture

Polyisobutylenes (PIB) constitute a versatile family of polymer materials that have been used mainly as fuel and lubricant additives. Particularly, the current commercial demand for highly reactive polyisobutylene (HR-PIB) products motivates the development of new processes and procedures to produce PIBs with high polymer yields, narrow molar mass distributions and high vinyl contents. For this reason, a bibliometric survey is presented here to map and discuss important technical aspects and technological trends in the field of solution cationic polymerization of isobutylenes. It is shown that investigations in this field are concentrated mainly on developed countries and that industrial initiatives indicate high commercial interest and significant investments in the field. It is also shown that use of catalyst systems based on AlCl3 and ether cocatalysts can be very beneficial for PIB and HR-PIB manufacture. Finally, it is shown that investigations search for cheaper and environmentally friendly catalysts and solvents that can be employed at moderate temperatures, particularly for the production of HR-PIB.

Real Estate Market Performance in Nigeria: Longitudinal Evidence from Residential and Commercial Property Sectors in Port Harcourt

The low transparency characterization of the real estate market in Africa presents an antithesis to the promising potentials of the market to global real estate investors and mutual funds. In spite of this, there appears an asymmetric synchronicity between increasing global attention towards investment potentials of the Sub-Saharan African real estate industry and an almost 50% market opacity. In addressing this anomaly, the study examines residential and commercial real estate returns from a Nigeria, using Port Harcourt city as test market. It has objectives of determining the rental value trend of residential and commercial properties in Port Harcourt, Nigeria, and the longitudinal rental growth rate of residential and commercial properties in the study area. The study employed qualitative technique to collect, peruse and analyze data from valuation reports obtained from Estate Surveying and Valuation firms in the study area. The resulting data were subjected to content analysis, Analysis of Variance and Correlation. The population of the study was all residential and commercial properties which have been subjected to rental valuation by designated professionals over the periodic scope of the study. Therefore, the unit of analysis was all rental valuation reports on residential and commercial properties in the study area. Given the infinite nature of the population, Godden (2004) formula was used for sample size determination of 384. It was found that rents from residential and commercial property investments in Port Harcourt, Nigeria recorded a steady increase within 2009 to 2018, with mean rental growth rates of 10.8% and 17.8% for residential and commercial properties respectively. It was concluded that the real estate market in Port Harcourt is a high performing market, with the commercial sector offering high return on investment potentials for investors.

Performance of Foreign Direct Investment in Commercial Real Estate in Nigeria from 2006-2017

Performance of FDI in commercial real estate in Nigeria when compared to international benchmark figures is yet to be established and documented in literature. The aim of the study was to appraise the performance of FDI in commercial real estate in Nigeria from 2006 to 2017 in a bid to empirically assist foreign direct investors’ decisions on investing in the Nigerian commercial real estate sector. The objectives were to; ascertain and compare returns from foreign direct investments in commercial real estate in Nigeria with international benchmark; and to examine how FDI tax responsibilities in Nigeria compare with the global benchmark rate. The study adopted ex post facto research design, and the unit of analysis was selected foreign controlled commercial real estate investments in Lagos and Abuja. The study adopted the Jones Lang LaSalle benchmark settings for commercial real estate performance indicator due to its empiricism from an international perspective where yield is 5.7%, capital growth is 7% and rental growth is 5.5%. Data were collected on rental values, capital values, tax responsibilities, and was analyzed using T-test. The study showed a yield of 4%, (t = 6.364; p < 0.05) and a capital growth rate of 21%, (t = 1.592; p > 0.05), while there was no negative variation in FDI tax responsibilities in Nigeria and international benchmark rate cap of 30% (t = .8666; p > 0.05). The study recommended that property managers should practice tenant mix and flexible leases and spaces.

Application of agroforestry business models to tropical peatland restoration

Indonesia is home to around 45% of the world’s tropical peatlands which continue to be degraded on a large scale by deforestation, drainage and fire, contributing massively to global GHG emissions. Approaches to restoring the peat–water balance and reducing emissions in peat hydrological units, through managing them based either on full protection or large-scale commercial production, have generally failed to address environmental and local community needs. We present published and unpublished findings pointing to the need for an integrated peatland protection and restoration strategy based first on raising water levels in degraded (drained) peatlands and maintaining them in forested peatlands, thus, reducing GHG emissions. Second, the strategy incorporates ecologically sound agroforestry business models that strengthen livelihoods of smallholders and so sustain their interest in sustainably managing the peatlands. In this paper, we focus on the second element of this strategy in Indonesia. Eight agroforestry business models are proposed based on their merits to attract both smallholders and commercial investors as well as their compatibility with hydrological rehabilitation of the peatlands. While financial returns on investment will vary across sites and countries, our analysis indicates that some models can be profitable over both short and longer time periods with relatively low levels of investment risk.

Role of development finance institutions on sustainable development goals: poverty eradication

Development Finance Institutions (DFIs) deliver services which aim at Sustaining Development Goals (SDGs) towards poverty eradication. The services delivered by DFI are quite unique and interesting. The study investigated role of DFI on SDGs with regards to poverty eradication. The study adopted critical review of recent works of literatures to identify the success factors of DFI’s as regards it role on the SDGs. In conclusion, undoubtedly, DFIs are becoming a key asset and a driving force for poverty eradication over the world. They share a common focus on fostering SDGs. Their mission lies in servicing the investment shortfalls of developing countries and bridging the gap between commercial investment and state development aid. The reviews of the previous literatures showed that that DFIs significantly impact on the level of job creation thus enhancing the standard of living and by helping countries catalyze the private investment required to meet the United Nations’ SDGs. The study therefore recommends amongst others that government should ensure that the money from DFIs are utilized efficiently and effectively for only the purpose it is meant for, to increase the level of infrastructural development and there is also need to address and resolve the growing policy contradiction between multilateral agencies as last resort sources of finance to cater for well-being, in order to reduce poverty and thus improve the standard of living of the people.

Effect of Corporate Governance on Microfinance Institutions Financial Performance in Ethiopia

The microfinance sector in Ethiopia is not yet proved to be a profitable business that attracts commercial investors. Most of the shareholders of the MFIs are regional governments, associations and NGO's. Recently directive has been issued, which allow MFIs to transform to banks that give MFIs an opportunity to move to the trajectory of full commercialization with the argument of profit motive to be self-sustainable and address other mission. This indicates that commercialization is currently big concern of MFIs in Ethiopia. Thus, the objective of this research project was to identify the effect of corporate governance on financial performance of MFIs in Ethiopia. Explanatory research design was employed to examine the effect of corporate governance practices such as board size, board sub-committee, numeration, and competence of boards and CEO on financial performances (measured by ROA) of MFIs. From the total 34 registered members of AEMFIs, three years data of 25 MFIs taken from secondary and primary source was analyzed. The result of regression analysis reveals that out of six corporate governance variables and one control variable identified for the study, three explanatory variables have found significant effect on financial performance of MFIs in Ethiopia. Effect of board of directors (BoDs) member size, educational level of boards of BoDs, industry experience of Chief Executive Officer (CEO) on ROA is positive but not significant. Numerations for BoDs, CEO education level and MFIs Scale have positive effect on ROA and statically significant at 5%, 5% and 1% level. The result also reveals that the overall fixed effect regression model is significant at 1% level and adjusted R square is 0.504 implies that the over effect of the corporate governance variables included in the study is significant and jointly explain 50.4% of financial performance of MFIs in Ethiopia. As a result, due attention need to be given for these corporate governance practices to attain required level financial performance and insure sustainability through commercialization. Keywords: Microfinance, corporate governance practices, financial performance, Ethiopia DOI: 10.7176/RJFA/12-13-04 Publication date: July 31 st 2021

International Real Estate Review

This paper identifies the impact of macroeconomic determinants of commercial property investment and development markets in Australia. A Hodrick-Prescott (HP) filter is used to filter the cyclical components of commercial property investment and development time series. In order to identify the long-run relationships and short-run dynamics, coupled with causality between these factors and property cycles, the investment and development property cycles are analyed with respect to the movement of nine macroeconomic factors by using time series data from 1987 to 2016. The empirical results suggest that the Australian commercial property market is often in an overdemand situation rather than oversupply, which can be explained by the different patterns of the property cycles on the demand and supply sides. Property investment cycles are shorter and more volatile than development cycles at around 8-10 years and more than 20 years, respectively, since there is a larger elasticity of the macroeconomic factors that underlie the investment market with short-term dynamics, while the development cycle is mainly affected by such factors moderately in the long run. Both the investment and development markets are intensively affected by financing related variables rather than market-sentiment and economic-cycle related variables.

Urban Regeneration and the Perceptions of Commercial Real Estate Market Participants: The Case of the Johannesburg Inner City

Many factors contribute to urban decay in inner city locations as real estate investments fall and industries disappear or move to more attractive locations. In South Africa, the attainment of democracy and the resultant ‘white flight’ in favour of decentralised locations precipitated urban decay. Commercial real estate has spill-over effects on foot-count and absorption rates on inner city real estate. It helps stimulate redevelopment of other property types such as apartments, which contribute to the overall economic revitalisation of the decayed inner city. This paper examines the challenges faced by real estate investors in regeneration projects in Johannesburg Inner City (JIC). The paper uses an exploratory qualitative research design, where interviews were conducted with commercial real estate participants in JIC. The paper identified five challenges faced by commercial real estate market participants regarding investments and operations: building acquisition, physical public infrastructure, homelessness, lack of financing, and crime. An understanding of these challenges faced by commercial real estate market participants is valuable for policy-makers trying to attract commercial real estate investments to the inner city. Successful regeneration projects will promote urban renewal and revitalise economic activities in the decaying regions. The identified challenges will illuminate municipal programs and policies needed for the development of inner cities.

Exploring investment paradigm in urban office space management: perspectives from coworking space investors in Nigeria

PurposeCoworking space had been a trajectory in the commercial space operation and management globally. Commercial coworking/tenancy space is confronted with an unexpected shift. This paper aims to examine the peculiarity and investment characteristics of flexible office space and the post-COVID implications on coworking office space practice and investment. This is with a view toward providing investors with an understanding of the dynamics underpinning flexible office space investment in the Nigerian emerging property market.Design/methodology/approachThis study adopted a qualitative research approach. Open-ended interview questions were used to solicit information from nine coworking space operators in the urban property market of Ibadan, Nigeria. The structured interview data were analyzed using Atlas.ti – a computer-aided qualitative data analysis software.FindingsThe findings show that the factors influencing demand for flexible office space in the study area include flexibility, affordability, cost-effectiveness, entrepreneurship motivations and opportunity for risk sharing. The results also revealed that coworkers are predominantly mobile individuals who require a workstation away from their homes or a traditional office setup. Management challenges include deficient infrastructure, low level of awareness, stealing and high cost of operations. The impact of COVID-19 includes a drop in patronage, rent refunds, changes in working pattern and job loss, restriction to online and remote operation, the extra cost of putting prevention measures in place, changes in tenancy contract and drops in return on investment.Practical implicationsThis study has implications for investors in commercial space occupation and leases in comparable developing economies.Originality/valueThe novelty of this paper lies in its relevance with the emergent behavioral changes, orchestrated from the novel COVID-19, which compels reevaluation of workplace practices and investment for economic improvement, especially as it relates to commercial real estate investment.

A business-oriented approach for battery energy storage placement in power systems

Battery energy storage systems (BESSs) are gaining increasing importance in the low carbon transformation of power systems. Their deployment in the power grid, however, is currently challenged by the economic viability of BESS projects. To drive the growth of the BESS industry, private, commercial, and institutional investments in large-scale BESS projects are needed. For financiers and investors, choosing an appropriate BESS installation location is a crucial task that requires important considerations. However, so far, studies targeting the BESS placement problem have mainly focused on minimizing operational losses, solving power quality issues, and improving the voltage profile of the system. Implementing such approaches only considers the operational feasibility of BESS at the installation site while ignoring its business feasibility. Therefore, in this paper, we approach the BESS placement problem from a business viewpoint by conducting a stage-level investigation of BESS projects. First, we identify the factors impacting the business feasibility of placement decisions in projects’ construction, connection, operation, and disposal stages and propose cost and time effective measures for making them business friendly. We investigate several factors such as profitability of grid services, integrability of renewable resources, affordability of connection charges, and the usability of BESS capacity. Second, we investigate the business potential of placing BESSs in different grid-levels of the power system and examine BESS connection procedures at those levels. Third, we implement the proposed approach for installing a BESS in the Danish island of Bornholm, for which, we investigate multiple locations of the Bornholm power system.

How will today’s workforce change the geographical footprint of tomorrow ’s workspace? The ‘Hub and Spoke’ model: Case studies

COVID-19 has forced companies to introduce remote working practices at a wholescale level, a trend that had slowly been increasing over the last decade. Both positives and negatives have emerged as we all wrestle with the implications of removing the office from our daily routine. For the majority of the workforce, the lack of a long commute has been a huge benefit to the employee from a cost and time perspective, but is that reason enough to envisage a radically altered office experience? As companies look at new workplace strategies that allow them to retain the best staff, we anticipate a period of test, measure, learn and adapt from the majority of progressive corporate real estate (CRE) teams. They have to balance the need to retain their corporate culture and identity, imbue a sense direction and a positive sense of collaboration while hybrid working experiments are carried out. One solution that many clients and contacts have referred to within their testing strategy is the dispersed portfolio model, or ‘Hub and Spoke’. The Instant Group and its partners in the project, Hickey & Associates, explored the impact of a people-focused, agile disaggregated portfolio. The aim was to understand what benefits could exist to both the employee and employer by adopting such a strategy and what factors should be considered by a company looking to test such a model. The findings showed the types of location that appear highly suited to satellite offices, alongside the benefits from a cost perspective the employer could expect to see. Surprisingly, large time savings can also be achieved by employees on an annual basis; it is not uncommon for those used to commuting an hour and a half a day to save over 35 standard working days a year. While these outcomes are positive, difficulties do exist — not only from a business perspective in ensuring senior stakeholders are spread across the portfolio, but also from a purely real estate perspective. In many of the locations highlighted, supply of quality office stock is limited, and future developments are far less prevalent than in major cities. This suggests that while the methodology stacks up on paper, there will be practical challenges for businesses that are slower to react, unless we see a major change in commercial real estate investment and development.

Real Estate and Construction Sector Dynamics Over the Business Cycle

This paper explores the property prices and investment dynamics over the business cycle when there is competition between households and firms for real estate. We introduce a construction sector into an RBC framework, which uses land, capital and labour to produce both commercial and residential real estate. This market structure activates a real estate substitution channel, where an increase in demand for residential real estate also increases the cost of producing commercial structures, which crowds out commercial real estate investment. In general, we find that the residential/commercial land allocation acts as an anchor for the allocation of its real estate investment counterpart; however, there are notable separations, particularly following the financial crisis where there was a simultaneous fall in residential and commercial investment. Our results indicate that whilst residential real estate prices were predominately driven by increases in its demand in the buildup to the financial crisis, the fall in demand for commercial real estate played a significant role in generating price falls for both types of real estate in the aftermath. Furthermore, falls in the overall supply of real estate played an important role in reducing real estate investment which put upward pressure on prices throughout the past two decades.