Valuation and Construction Issues in Real Estate Indices

Erscheinungsjahr 2005
ISBN: 978-90-77997-01-7
Verlag: Europe Real Estate Publishers B.V.

Buch, Englisch, 165 Seiten

This thesis concentrates on increasing the knowledge and transparency of real estate investments by institutional investors in the Netherlands Where possible the results have been placed in an international context, comparing them with similar figures, results and surveys, mainly from the UK and the US.

The first part describes the development of a long term time series for real estate returns and office market rental values. Unique databanks have been constructed going back to 1977.

The second part studies the valuation consistency and accuracy of the valuations between 1995 and 2002. Recommendations have been made to improve the well known valuation guidelines as established by the Dutch Real Estate Council ROZ. The outcome of the valuation accuracy has been discussed several times at the meetings of the International Valuation Standards Committee (IVSC). An abbreviated version is available via its website.

The last part of the thesis makes estimates of the real estate stock, the real estate investments by investors, and the potential investments in real estate in 11 European countries. Separate overviews per country are included, showing detailed information when possible and available. The results of this research have already been picked up over time, nationally as well as internationally, and will most likely contribute to other research in the future.

Scientific studies dealing with direct real estate are relatively rare, particularly with respect to its return. The objective of this thesis by Aart Hordijk - in daily life Director of the ROZ/IPD Real Estate Index - is to raise corporate investors and other investors' awareness of the return of direct real estate as an investment category, and to give them a realistic indication of what they can expect from investments in direct real estate.

Chapters
1. Introduction
2. Long-run return series: 25 years of commercial real estate in the Netherlands
3. Development of historic time series of office rents in the Netherlands
4. Valuation model uniformity and consistency in real estate indices
5. Valuation accuracy in real estate indices
6. European market dimensions: an inventory of the potential investment market in 11 European countries
7. Conclusions and further research

Some main conclusions
- Valuation accuracy is much better than most people think
- Consistency in valuations should and can be improved
- Institutional investors and appraisers archives are essential in the development of reliable 25-year real estate returns
- Stimulating results from the relation between real estate stock and GDP in 11 European countries
- Two to three year lag in 25-year office market rent response on the change in supply and demand ratio

Autoren/Hrsg.

Hordijk, Aart

Fachgebiete

• Rechtswissenschaften Bürgerliches Recht Sachenrecht Grundstücks- und Immobilienrecht, Immobiliarsachenrecht, Nachbarrecht
• Wirtschaftswissenschaften Wirtschaftssektoren & Branchen Immobilienwirtschaft

Über Autor(innen)

Aart Hordijk, a citizen of the Netherlands, studied economics at the Free University of Amsterdam. After he was graduated he fulfilled his military service where he ended as lieutenant.
He started his career in software development, first at NCR followed by Shell. After seven years he decided to move away from software development and started to work in real estate investments. First he worked for a private real estate investor, thereafter he joined DTZ, where he has set up the Research Department in the Netherlands. Then he joined ABP, the Dutch Government Pension fund, where he was involved in valuations, portfolio management and real estate indices.

In 1995 he became the director of ROZ Real Estate Council of the Netherlands as well as the director of the Dutch real estate index organisation, which cooperates with the IPD Investment Property Databank in London to produce the ROZ-IPD Real Estate Index. Already since 1991 he is involved in Real Estate education with the Amsterdam School of Real Estate program. Later on he became also a visiting lecturer at the University of Amsterdam, the University of Antwerp and the University of Ulster.
Internationally, Aart is the representative for the Netherlands in the IVSC, the International Valuation Standards Committee and he is a member of the editorial board of the Journal of Real Estate Portfolio Management. Hordijk also publishes regularly, nationally as well as internationally, and he organises yearly a real estate research seminar in the Netherlands.
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