Office Market Research Articles

오피스 임차인의 회전율

오피스 임차인의 회전율

Capital flows and office markets in major global cities

PurposeOffice markets and particularly international financial centres over the past decade have experienced rapid financialisation, developments and indeed changes in the post-global financial crisis (GFC) landscape. Importantly, the volume and types of international capital flows have witnessed more foreign actors and vehicles entering into the investment landscape with the concentration of investment intensifying within key financial centres. This paper examines the interaction of international real estate capital flows in the London, New York and Tokyo office markets between 2007 and 2017.Design/methodology/approachUsing Real Capital Analytics (RCA) data comprising over 5,700 office property transactions equating to $563bn between 2007 and 2017, the direct global capital flows into the London, New York and Tokyo office markets are assessed using an autoregressive distributed lag (ARDL) approach. Further, Granger causality tests are examined to analyse the short-run interaction of international real estate capital flows into these three major office markets.FindingsBy assessing the relativity of internal to external investments in these three central business district (CBD) office markets, differences in market dynamics are highlighted. The London office market is shown to be highly dependent on international flows and the USA, the foremost source of cross-border investment on the global stage. The cointegration and causality analysis indicate that cross-border real estate investment flows in these markets (and financial centres) show both long- and short-run relationships and suggest that the London office market remains more distinct and the most reliant on international capital flows with a wider geographical spread of investment activities and investor types. In the case of New York and Tokyo, these markets appear to be driven by more domestic investment activity and capital seemingly due to subtle factors pertaining to investor home bias, risk aversion and diversification strategies between the markets in the aftermath of the GFC.Originality/valueGiven the importance of the CBD offices in London, New York and Tokyo as an asset class for institutional investors, this paper provides some insights as to their level of connection and the interaction of the international capital flows into these three major cities.

Research on Influencing Factors of Film Derivative Consumption Demand Based on Analytic Hierarchy Process

The scale of Chinese film market is expending day by day, and it has become the second box office market in the world. However, the development of Chinese film derivatives is still in its infancy. In order to further promote the development of Chinese movie derivatives market, movie derivative is studied as the research object, and the system of factors influencing movie derivatives consumer demand is established. Then, the use of analytic hierarchy process (AHP) determines the weight of each influencing factor. Finally, according to factor weight, relative suggestions are put forward to enhance film quality, to do a good job in derivatives development, to promote the movie derivatives development, and to promote the industry of movie and cultural creativity.

Connected markets through global real estate investments

AbstractThis study focuses on the possibility of higher risk in commercial real estate markets due to the “linked ownership” network, which is measured by the common holdings of properties in different urban real estate markets by the same investor. Using data from 2007 to 2016, our results show that commonality in ownership can explain the significant comovement in international office market performance and add additional information to other matrices constructed by geographic distance, mergers and acquisitions capital flow, currency unit, and even overlapping occupiers located in those cities. The transmission mechanism is most pronounced and persistent during the global financial crisis period.

Strange attractor in the Auckland commercial property market

PurposeThe purpose of this study is to provide a chaos theory-based framework, which can be used to model commercial property market dynamics.Design/methodology/approachThe paper is presented in two parts. In the first, rigorous mathematical reasoning is entertained, so to derive an attractor describing a set of feedback formulae. In the second part, the attractor definition is used to model the Auckland commercial office market. The model is exposed through a set of seven scenarios allowing for analysis of the market behaviour under various exogenously imposed conditions.FindingsThe general behaviour of the model is in agreement with the commercial property market conduct observed in Auckland. The model provides information related to the market turning points and allows for an explanation of some intricate market dynamics. These include the anatomy of a market peak and its response to the liquidity oversupply.Practical implicationsThe model may be used to expand our understanding of the market performance under various exogenically imposed conditions, which allows for planning of market interventions in a more refined manner.Originality/valueThe paper is original, in the way the chaos theory is applied to the property markets modelling and allows for expanding the understanding of the market behaviour.

‘Trophy Architects’ and Design as Rent‐seeking: Quantifying Deadweight Losses in a Tightly Regulated Office Market

Britain tightly restricts the supply of office space, creating substantial economic rents, but its development restrictions are politically administered and therefore gameable, inducing rent‐seeking activity. We find that ‘trophy architects’ (TAs)—prior winners of a lifetime achievement award—obtain more space on a given site apparently by signalling architectural merit. Analysis of 2039 office buildings shows that TAs build 14 stories taller, thereby increasing a representative site value by 152% and capturing potential economic rents of £148m. However, we argue that this apparent premium is merely compensation for the extra costs, risks and delays of using a TA to game the planning system; it is therefore an indirect measure of the deadweight costs of this form of rent‐seeking.

Consequences of Going-Concern Opinion Inaccuracy at the Audit Office Level

SUMMARYThis paper examines whether inaccurate going-concern opinions negatively affect the audit office's reputation. Assuming that clients perceive the incidence of going-concern opinion errors as a systematic audit quality concern within the entire audit office, we expect these inaccuracies to impact the audit office market share and dismissal rate. We find that going-concern opinion inaccuracy is negatively associated with the audit office market share and is positively associated with the audit office dismissal rate. Furthermore, we find that the decline in market share and the increase in dismissal rate are primarily associated with Type I errors. Additional analyses reveal that the negative consequence of going-concern opinion inaccuracy is lower for Big 4 audit offices. Finally, we find that the decrease in the audit office market share is explained by the distressed clients' reactions to Type I errors and audit offices' lack of ability to attract new clients.

Hidden Vacancy Rate as a Part of Office Market Dynamics in Selected Polish Cities

Abstract The hidden vacancy rate reflects the adjustments of the market vacancy rate that may occur in the future, in the event of a change in market conditions. Its occurrence results from the fact that the current level of rented office space reflects the demand based on past levels of rent and past predictions of changes in the tenants’ demand for space during the term of the lease. Thus, the level of total, occupied office space at given moment does not result from demand based on the current market rent. This is the result of the duration of lease agreements concluded for more than one period. The hidden vacancy rate is also related to the costs of searching for office space that meets the specific criteria of tenants, removal costs and office space adaptation costs. The hidden vacancy rate cannot be observed in the market, but can be determined based on available market data. The article presents the concept of a hidden vacancy rate. Next, the presented theory was used to determine the dynamics of the hidden vacancy rate in a narrow and broad approach in the market of modern office space in Warsaw, Krakow, Wroclaw and Poznan. The obtained results were compared to two mature office space markets in Western Europe. The study shows differences in the formation of the hidden vacancy rate on the market characterized by a relatively large total stock of available office space in relation to markets being at an earlier stage of development.

Office Market in China: Scale Estimation, Price Determinants and Spatial Convergence

In this paper, we apply the Capital Depreciation Model to the estimation of office building scale in 35 major cities. The result shows that the China office market shows an average 40% increase in scale in the past 10 years. Economic growth is the key factors influence the office building price, the influence of scale on office building price is limited. The co-movement of office building prices in China is relatively weak, but the office market is getting more connected in past years.

Büyük Veri Setlerinde Üstel Mekânsal Matris Tanımı Yaklaşımı: İstanbul Ofis Piyasası Analizi

Çalışmada, İstanbul Ofis Piyasası’nda ofis kira değerlerinin belirlenmesinde etkili olan faktörleri tespit etmek amacıyla mekânsal bağımlılık etkisini dikkate alan hedonik ofis kira modelinin geliştirilmesi amaçlanmıştır. Bu amaçla, mekânsal gecikme modeli ile birlikte mekânsal hata ve mekânsal Durbin modeli tahmin edilmiş ve çeşitli kriterlere göre ilişkiyi diğer mekânsal modellere göre daha iyi açıklayan modelin mekânsal gecikme modeli olduğuna karar verilmiştir. Mekânsal modeller 2018’in ilk çeyreği boyunca İstanbul’un 28 ilçesinden elde edilen 2348 ofise ait veri seti kullanılarak tahmin edilmiştir. Uygun model olarak belirlenen mekânsal gecikme modelinin tahmin sonuçlarına göre, ofis kiraları üzerindeki en etkili ilk üç değişken sırasıyla ofis binalarındaki ortalama boşluk oranı, bina tipi ve boğaz manzarasıdır. Veri setinin büyük boyutlu olması mekânsal gecikme modelinin tahmininde yanıltıcı tahminlere neden olacağından, üstel mekânsal matris modeli tahmin edilmiştir. Her iki modelin tahmin sonuçları karşılaştırıldığında katsayı tahminlerinin neredeyse aynı olduğu gözlemlenmiştir.

The relationship between interior office space and employee health and well-being – a literature review

ABSTRACT Health is a trending topic in the office market, yet scientific research on healthy offices is scattered. This study undertakes a systematic literature review on the relationship between the interior space of offices and physical, psychological and social well-being. The review identifies the characteristics of interior office space that have been studied in relation to employee health, and outlines the empirical evidence. Of 2816 papers in the database, 50 addressed the relationship between interior office space and health and did so based on six features: layout, furniture, light, greenery, controls and noise. Evidence on the relationship between interior space and health has accumulated only within a few topics. On the one hand, open-plan offices, shared rooms and higher background noise are negatively related to health. On the other hand, positive relationships are found between physical well-being and aspects that encourage physical activity; between physical/psychological well-being and (day)light, individual control and real/artificial greenery; and between social well-being and small shared rooms. In measuring health, physical well-being is predominant. Similarly, studies have predominantly aimed to prevent health problems rather than enhance health. Overall, the related research is in a nascent stage. Further research is required to verify claims about healthy offices.

FINDING EVIDENCE OF GREEN LEASING IN UNITED STATES GOVERNMENT-LEASED PROPERTIES

ABSTRACT Although the term “green leasing” is not yet well defined, its primary purpose is clear. With an aim to create a collaborative environment through legal provisions between a building owner and a tenant, green leasing may ultimately help resolve the energy paradox in tenanted properties. Issues surrounding split-incentives are driven by a mismatch between owners' capital expenditures on improving building energy efficiency and an uncertainty of tenant or occupant behavior that might affect a building's energy consumption. Though some countries have started to develop guidelines promoting the adoption of green leasing, especially in government buildings and commercial real estate, implementation has not been overly successful globally. This study has two focuses, the first of which is to compare green leasing guidelines from various countries and to suggest six comprehensive categories of green leasing components: management relationships, information sharing, certificates, legal stipulations, financial factors, and operation. The second core area of research places government-tenanted properties' lease agreement contracts. The goal is to find any evidence in a legal condition between a building owner and a tenant, in this case federal government, to improve building energy efficiency with less environmental impact in the United States. The findings of the study indicated 41 out of 400 leases had green clauses. Three out of six categories proposed in this study were found in the U.S. government-tenanted properties, while the other three types were not shown. The findings of this study also suggest categories of green leasing clauses can contribute to defining green leasing and provide empirical evidence of green leasing in governmenttenanted properties. Ultimately, this study produces arguments for possible reasoning behind the employment of some green lease categories but the lack of use of others, specifically in the U.S. office market and government-tenanted buildings.

Determinants of Shared Workspace Selection by User Attributes in Seoul: Regional, Business and Industrial Type*

This study intends to analyze the determinants of the shared workspace in Seoul by different user attributes based on AHP and Fuzzy methodologies. Research findings indicate that the ‘Economic feasibility’ is the most important determinants, followed by the ‘Location condition.’ It is noteworthy that the ‘Business environment’ and ‘Qualitative value’ not considered as important determinants in traditional office market are sufficiently important. Among the 12 lower hierarchy components, the ‘Public transportation’ was the most important factor for all the areas and the second was ‘Operating cost saving.’ Unlike CBD and GBD, YBD workers consider ‘Operating cost saving’ as the most important determinant of shared workspace selection. This study intends to give insights and resources for shared workspace strategies to shared workspace operators and providers accordingly providing the guide for the practical real estate strategy so that the shared workspace industry can solidify itself as a viable and sustainable segment of the future office market.

The Financial Impacts of Coworking: Rental Prices and Market Dynamics in the Commercial Office Market

Coworking providers, like WeWork, have shifted the competitive landscape for office tenants through differentiating office amenities, leasing fully-equipped desks or offices over flexible time periods. However, even though coworking providers are a tenant type in consumer demand, little is known about the strategic interaction of this growing tenant with landlords in the real estate sector. In this paper, we assess landlord-coworking provider interaction through lease contract valuation, assessing if landlords see coworking providers as a substitute, benefit or risk, compared to other tenants. Using lease contracts from six US cities between 2008 to 2018, we compare rent conditions between coworking providers and tenants within the same building. We document that landlords treat coworking providers as substitutes not differentiating in effective rent compared to other tenants. Coworking providers take systematically longer lease durations, resulting in higher tenant incentives, such as free rent periods and tenant improvement concessions. Controlling for lease duration, coworking providers receive significantly more tenant concessions. We do not find value-increasing external effects of coworking providers, concluding that landlords are indifferent towards coworking tenants.

Ancillary market signalling: A two-stage model of economic reputation on ancillary market success

ABSTRACT Due to high market search costs, public information can have a stronger impact than private information on consumer choice behaviour. As a result, a priori economic success serves as a signal of high quality, reduces information asymmetries and can thus have an influence on the market performance in ancillary markets. Using weekly sales data from the ancillary DVD market, consisting of 8664 movies and their commercial performance between 2006 and 2018, we empirically test the influence of economic reputation on ancillary market success. We find clear evidence to suggest that former box office and DVD market success is positively associated with DVD sales. We additionally show that for distributors it is rational to follow a price skimming strategy of setting prices high when introducing new products to the market. These results provide practical insights into how businesses can maximize their profits by improving their decisions concerning product launch strategies.

오피스 투자수익률과 투자심리의 관계에 대한 연구

본 연구는 오피스 투자수익률과 투자심리의 관계를 확인하는 연구를 진행하였다. 한국은행의 소비자심리지수(CSI)를 투자심리의 대리변수로 이용하였으며, 투자수익률과 투자심리의 관계를 확인하기 위해 심리변화를 야기하는 거시경제적 동인을 파악하는 사전적 분석을 진행하였다. 또한, 합리적인 경제요인에 근거하지 않은 비합리적 심리(irrational)의 영향을 확인하기 위해 심리분해방법을 수행하였다. 심리분해를 통해 변수로 설정한 합리적 심리(rational)와 비합리적 심리(irrational)가 투자수익률과 어떠한 관계에 있는지 확인하기 위해 벡터자기회귀모형(VAR)을 통해 상호적인 관계를 검증하였으며, 각 심리가 투자수익률에 영향을 미치는 경로를 파악하기 위해 소득수익률(IR), 자본수익률(CR)에 대한 추가적인 분석을 진행하였다. 분석결과, 환율을 제외한 본 연구의 모든 거시경제변수가 심리변화를 일으키는 동인으로 밝혀졌다. VAR모형 분석결과, 비합리적 심리가 투자수익률에 미치는 영향은 유의성이 낮은 것으로 나타났으며 합리적 심리는 투자수익률과 소득수익률에 유의한 영향을 미치는 것으로 나타났다.

Hegemonic building and the paradox of over-accumulation in the Central London office market

At every stage of urbanisation, monumental buildings have been employed as hegemonic symbols by the dominant social class. Beyond their use value and exchange value, such buildings acquire symbolic value as signifiers of status and power. They provide a medium through which the dominant class can express its collective authority, and individuals within that class can compete for supremacy. Hegemonic buildings exert a disproportionate influence on urbanisation, acting as catalysts for more extensive swathes of building investment and surviving long after most of that investment has been destroyed. Under capitalism, hegemonic buildings, like all buildings, have become commodified; their symbolic value as well as their use value has become a tradeable commodity The expected return from investing in such a building thus includes a ‘hegemonic premium’, the return on the symbolic capital invested in it. Competition amongst investors in hegemonic buildings such as office towers leads to over-accumulation, with more buildings produced than there are occupiers willing and able to fill them. This, in turn, leads to the devaluation of capital and the acceleration of obsolescence, as buildings become economically obsolete long before they reach the end of their physical life.

Smart and Green Buildings Features in the Decision-Making Hierarchy of Office Space Tenants: An Analytic Hierarchy Process Study

In the paper, we investigate the role of smart building or green building innovations on the Polish real estate market using the Analytic Hierarchy Process (AHP) method on the group of experts (consultants, managers, brokers) that are active on the office market in Krakow (study area). The findings point towards the highest relevance of the localisation factor, but also at the relatively low importance of the features of a sustainable building: building automation and information technology systems, as well as energy efficiency or certification. The findings suggest that despite the growing interest in sustainability and technological advancement amongst office market participants in Krakow, the relative importance of smart and green building features in their decision-making processes is relatively low. The study has some interesting practical implications. The knowledge regarding the relative importance of decision criteria can be valuable for developers and investors because the anticipation of tenants’ expectations is directly linked with return on investment and innovation premiums.

International Real Estate Review

We develop a simple framework to assess the position of office prices with respect to their fundamentals. Applying the model to France, we show that a constrained office supply and low interest rates mainly explain for the high and increasing trend of office prices in recent years. Nonetheless, we find that the office market is only slightly overvalued in France in late 2017: the deviation of office prices with respect to their fundamental determinants is between 0% and 10%, thus indicating that the market is close to fair value.

The impact of Minimum Energy Efficiency Standards: Some evidence from the London office market

This paper provides a preliminary evaluation of staged introduction of the Minimum Energy Efficiency Standards in England and Wales in the period after announcement but before policy implementation. A process evaluation of the specific policy design focussing on potential sources of policy failure is provided. Drawing upon a database of all EPCs registered for offices in London, preliminary empirical evidence is presented on policy outcomes post-announcement and pre-implementation period. The extent to which EPC G and F rated office buildings in London have improved their EPC rating in anticipation of the introduction of the policy between 2011 until 2017 is analysed. It is found that a maximum of 0.65% of the properties affected by the introduction of minimum standards had modifications that could have been triggered by the policy intervention in the period prior to policy implementation.