ABSTRACT Property portfolios are traditionally constructed by diversifying across geographical ar... more ABSTRACT Property portfolios are traditionally constructed by diversifying across geographical areas, property types or a combination of both. In the UK it is normal practice to use regions rather than towns or local markets areas as the geographical divisions. In this paper cluster analysis is used to construct homogeneous groups from 157 UK local markets using commercial property returns. The results show strong property type dimensions and only very broad geographical dimensions in the clusters. These clusters are found, generally, to have temporal stability with changes in cluster membership explained by the changing economic geography of the UK. The cluster-derived groupings are used to derive efficient investment frontiers and are compared to frontiers based on conventional heuristic groupings. It is shown that strategies based on parsimonious cluster-based groupings, appropriate for smaller investors, generate results that are comparable to those of conventional groupings and capture the main drivers of property performance.
The Journal of Real Estate Finance and Economics, 1997
Two strands of real estate researchÐthat concerned with the relationships between securitized rea... more Two strands of real estate researchÐthat concerned with the relationships between securitized real estate and the underlying market and that dealing with the role of property in the wider economyÐrarely are considered together. The paper utilizes the U.K. equity market and property company share data to explore the relationships between real estate and the rest of the economy, using a two-sector analytic model. Causality analysis suggests that the wider economy leads the real estate market in the short term but that, with a longer lag structure, positive real estate returns may point to negative future returns in the rest of the economy. This provides weak con®rmatory evidence for theories of capital switching between sectors.
This paper assesses the impact of the monetary integration on different types of stock returns in... more This paper assesses the impact of the monetary integration on different types of stock returns in Europe. In order to isolate European factors, the impact of global equity integration and small cap factors are investigated. European countries are subdivided according to the process of monetary convergence. Analysis shows that national equity indices are strongly influenced by global market movements, with a European stock factor providing additional explanatory power. The global and European factors explain small cap and real estate stocks much less well-suggesting an increased importance of 'local' drivers. For real estate, there are notable differences between core and non-core countries. Core European countries exhibit convergence-a convergence to a European rather than a global factor. The non-core countries do not seem to exhibit common trends or movements. For the non-core countries, monetary integration has been associated with increased dispersion of returns, lower correlation and lower explanatory power of a European factor. It is concluded that this may be explained by divergence in underlying macroeconomic drivers between core and non-core countries in the post-Euro period. 2 Monetary integration and real estate markets: An investigation of the impact of the introduction of a single currency on real estate performance
Http Dx Doi Org 10 1080 09599910500453848, Feb 17, 2007
ABSTRACT Planning policy aimed at preserving the viability of UK town centres halted the wave of ... more ABSTRACT Planning policy aimed at preserving the viability of UK town centres halted the wave of out-of-town shopping centres – Schiller's `third wave' of decentralization. Subsequently, a number of major in-town shopping centres were developed in the UK. The first of these was the Oracle Centre in Reading. This study examines the impact of the Oracle on retail activity in the town centre using land use data. The Oracle acted as a catalyst for change, accelerating trends already observed in the centre, shifting the prime pitch, weakening peripheral areas and increasing turnover rates and vacancy. However, many of the initial short-term property market impacts on rent and vacancy appear to have dissipated over the longer-term, leaving longer lasting land use changes in periphery areas. The added attraction of the town centre appears to have offset many of the trade diversion impacts. However, some adverse effects may have been masked by strong consumer spending and a vibrant local economy during the study period.
... port-folio diversification.3 The last decade has also seen further sophistication in the mode... more ... port-folio diversification.3 The last decade has also seen further sophistication in the modelling of office ... Part I, Systems of Cities and Cities of Finance, looks at the evolution of a global ... The relationship between demand for space, supply of office buildings and rent levels will be ...
Http Dx Doi Org 10 1080 00343404 2012 753434, Mar 6, 2014
ABSTRACT International office investment in global cities: the production of financial space and ... more ABSTRACT International office investment in global cities: the production of financial space and systemic risk, Regional Studies. The paper explores the relationships between UK commercial real estate and regional economic development as a foundation for the analysis of the role of real estate investment in local economic development. Linkages between economic growth, development, real estate performance and investment allocations are documented. Long-run regional property performance is not the product of long-run economic growth, and weakly related to indicators of long-run supply and demand. Changes in regional portfolio weights seem driven by neither market performance nor underlying fundamentals. In the short run, regional investment shifts show no clear leads or lags with market performance.
Foreign real estate capital was a major source of financing domestic property market office const... more Foreign real estate capital was a major source of financing domestic property market office construction in Central Europe after the fall of the Berlin Wall in 1989. During the 1990s, over 800 office buildings were either newly constructed or refurbished in Budapest, Prague and Warsaw. The primary focus of this analysis is explaining the spatial construction and redevelopment patterns of the post-1989 office buildings in these cities. Secondarily, we analyze the correlation of foreign direct investment flows to annual construction of office buildings. We seek to explain the location of new or refurbished office buildings in the central business district (CBD) or in non-CBD locations in terms of the effect of time, size of property and other variables, and test whether there is a positive correlation relationship of foreign direct investment flows and new office construction or refurbishment. Integrating relevant foreign direct investment (FDI), economic geography and property theories in the research, the authors attempt to bridge existing gaps in the literature.
Journal of Property Valuation and Investment, 1994
As property investment increasingly takes place on an international stage, investors are turning ... more As property investment increasingly takes place on an international stage, investors are turning to portfolio theory to help structure their investment strategies. Portfolio theory is an expectations-led theory. It is insufficient to rely on historic property returns alone. Rather, the fundamental factors that drive market performance should be considered. Argues that any European diversification strategy should consider the political and
ABSTRACT Property portfolios are traditionally constructed by diversifying across geographical ar... more ABSTRACT Property portfolios are traditionally constructed by diversifying across geographical areas, property types or a combination of both. In the UK it is normal practice to use regions rather than towns or local markets areas as the geographical divisions. In this paper cluster analysis is used to construct homogeneous groups from 157 UK local markets using commercial property returns. The results show strong property type dimensions and only very broad geographical dimensions in the clusters. These clusters are found, generally, to have temporal stability with changes in cluster membership explained by the changing economic geography of the UK. The cluster-derived groupings are used to derive efficient investment frontiers and are compared to frontiers based on conventional heuristic groupings. It is shown that strategies based on parsimonious cluster-based groupings, appropriate for smaller investors, generate results that are comparable to those of conventional groupings and capture the main drivers of property performance.
The Journal of Real Estate Finance and Economics, 1997
Two strands of real estate researchÐthat concerned with the relationships between securitized rea... more Two strands of real estate researchÐthat concerned with the relationships between securitized real estate and the underlying market and that dealing with the role of property in the wider economyÐrarely are considered together. The paper utilizes the U.K. equity market and property company share data to explore the relationships between real estate and the rest of the economy, using a two-sector analytic model. Causality analysis suggests that the wider economy leads the real estate market in the short term but that, with a longer lag structure, positive real estate returns may point to negative future returns in the rest of the economy. This provides weak con®rmatory evidence for theories of capital switching between sectors.
This paper assesses the impact of the monetary integration on different types of stock returns in... more This paper assesses the impact of the monetary integration on different types of stock returns in Europe. In order to isolate European factors, the impact of global equity integration and small cap factors are investigated. European countries are subdivided according to the process of monetary convergence. Analysis shows that national equity indices are strongly influenced by global market movements, with a European stock factor providing additional explanatory power. The global and European factors explain small cap and real estate stocks much less well-suggesting an increased importance of 'local' drivers. For real estate, there are notable differences between core and non-core countries. Core European countries exhibit convergence-a convergence to a European rather than a global factor. The non-core countries do not seem to exhibit common trends or movements. For the non-core countries, monetary integration has been associated with increased dispersion of returns, lower correlation and lower explanatory power of a European factor. It is concluded that this may be explained by divergence in underlying macroeconomic drivers between core and non-core countries in the post-Euro period. 2 Monetary integration and real estate markets: An investigation of the impact of the introduction of a single currency on real estate performance
Http Dx Doi Org 10 1080 09599910500453848, Feb 17, 2007
ABSTRACT Planning policy aimed at preserving the viability of UK town centres halted the wave of ... more ABSTRACT Planning policy aimed at preserving the viability of UK town centres halted the wave of out-of-town shopping centres – Schiller's `third wave' of decentralization. Subsequently, a number of major in-town shopping centres were developed in the UK. The first of these was the Oracle Centre in Reading. This study examines the impact of the Oracle on retail activity in the town centre using land use data. The Oracle acted as a catalyst for change, accelerating trends already observed in the centre, shifting the prime pitch, weakening peripheral areas and increasing turnover rates and vacancy. However, many of the initial short-term property market impacts on rent and vacancy appear to have dissipated over the longer-term, leaving longer lasting land use changes in periphery areas. The added attraction of the town centre appears to have offset many of the trade diversion impacts. However, some adverse effects may have been masked by strong consumer spending and a vibrant local economy during the study period.
... port-folio diversification.3 The last decade has also seen further sophistication in the mode... more ... port-folio diversification.3 The last decade has also seen further sophistication in the modelling of office ... Part I, Systems of Cities and Cities of Finance, looks at the evolution of a global ... The relationship between demand for space, supply of office buildings and rent levels will be ...
Http Dx Doi Org 10 1080 00343404 2012 753434, Mar 6, 2014
ABSTRACT International office investment in global cities: the production of financial space and ... more ABSTRACT International office investment in global cities: the production of financial space and systemic risk, Regional Studies. The paper explores the relationships between UK commercial real estate and regional economic development as a foundation for the analysis of the role of real estate investment in local economic development. Linkages between economic growth, development, real estate performance and investment allocations are documented. Long-run regional property performance is not the product of long-run economic growth, and weakly related to indicators of long-run supply and demand. Changes in regional portfolio weights seem driven by neither market performance nor underlying fundamentals. In the short run, regional investment shifts show no clear leads or lags with market performance.
Foreign real estate capital was a major source of financing domestic property market office const... more Foreign real estate capital was a major source of financing domestic property market office construction in Central Europe after the fall of the Berlin Wall in 1989. During the 1990s, over 800 office buildings were either newly constructed or refurbished in Budapest, Prague and Warsaw. The primary focus of this analysis is explaining the spatial construction and redevelopment patterns of the post-1989 office buildings in these cities. Secondarily, we analyze the correlation of foreign direct investment flows to annual construction of office buildings. We seek to explain the location of new or refurbished office buildings in the central business district (CBD) or in non-CBD locations in terms of the effect of time, size of property and other variables, and test whether there is a positive correlation relationship of foreign direct investment flows and new office construction or refurbishment. Integrating relevant foreign direct investment (FDI), economic geography and property theories in the research, the authors attempt to bridge existing gaps in the literature.
Journal of Property Valuation and Investment, 1994
As property investment increasingly takes place on an international stage, investors are turning ... more As property investment increasingly takes place on an international stage, investors are turning to portfolio theory to help structure their investment strategies. Portfolio theory is an expectations-led theory. It is insufficient to rely on historic property returns alone. Rather, the fundamental factors that drive market performance should be considered. Argues that any European diversification strategy should consider the political and
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Papers by Colin Lizieri