Barbara Y. P. Leung

Evaluation approach on public‐private partnership (PPP) urban redevelopments

Urban redevelopments in recent years tend to follow a pragmatic market‐led partnership approach with involvement of both public and private sectors. However, it has been evidenced that this approach suffers from a number of deficiencies. These include over‐reliance on private investments which make the project vulnerable to financial risks and over‐emphases on creating a place of opportunity rather than improving the social environment in the deprived areas. This paper proposes an approach encompassing Cost‐Benefit Analysis (CBA) and Option Pricing concepts (OP) into urban renewal projects which is considered more appropriate for urban redevelopment appraisal. The approach is applied for appraising the bust‐boom saga of the London Docklands redevelopment to demonstrate the importance of the inclusion of social costs and benefits in the evaluation and the strategic value of operating options. Furthermore, key factors for an urban redevelopment project are also identified from the analyses which are considered crucial for the success of the project. Urbanistiniai pertvarkymai pastaraisiais metais dažniausiai vykdomi laikantis pragmatine rinka pagristos partnerystes nuostatos, būdingos tiek viesiesiems, tiek privatiems sektoriams. Taciau buvo irodyta, kad sis būdas turi nemažai trūkumu. Tai susije su pernelyg dideliu pasitikejimu privaciomis investicijomis, del kuriu projektas susiduria su finansine rizika, bei pernelyg pabrežiamu galimybiu sukūrimu, o ne socialines aplinkos pagerinimu skurdžiuose kvartaluose. Siame darbe siūloma i urbanistinius atnaujinimo projektus itraukti kastu ir naudos analize (CBA) bei pasirinkciu kainodaros (OP) metodika, kuri laikoma tinkamesne urbanistiniams pertvarkymams ivertinti. Si metodika taikoma Londono doku pertvarkymams vertinti, norint parodyti socialiniu kastu bei naudos itraukimo i vertinima svarba bei strategine valdymo pasirinkciu verte. Be to, pagrindiniai veiksniai urbanistiniu pertvarkymu projekte taip pat nustatomi analizes, turincios esmine itaka projekto sekmei, metodu.

Option pricing for real estate development: Hong Kong Disneyland

It is well known that the traditional net present value (NPV) approach fails to take account of the multiple effects arising from the interactions of the operating and strategic flexibility during the course of a project. Option pricing theory (OPT) has been successfully applied in the valuation of both financial and real investments in the last two decades. However, it is still a relatively new approach in the valuation of real estate investments. This paper thus attempts to extend the application of OPT to the valuation of real estate development projects, providing insights into rectifying the limitations of traditional approaches. The paper starts with an overview of the development of OPT relating to real estate investments. It then examines the appraisal method adopted by the Government for Hong Kong Disneyland and explores the real options that may create added value to the project. A binomial option pricing model is proposed that estimates the potential values of the project with those options available. The study concludes that OPT is superior to NPV approach on the valuation of real estate investments in that it enhances upside potential as well as reducing downside risk.

Asymmetric information in the hong kong forward property market

Use of forward contracts for pre‐selling uncompleted properties is becoming popular in many countries. However, there have been limited researches investigating the risks arising from asymmetric information specific to buying a presale property and the critical factors required for the development of an effective forward property market. Hong Kong is one of the largest forward property markets in the world and it has been getting mature after half‐a‐century long development. This paper therefore aims to study the asymmetric information problem found in the forward property markets in different areas and explores the set of factors that are critical to the development of a forward property market by referencing the development of the Hong Kong forward property market.

Using E-learning to Deliver Construction Technology for Undergraduate Students.A Case Study in Hong Kong

Abstract E-learning is an essential part of innovative, life-long learning opportunities for the 21st century. Many tertiary education institutions are developing an ever-increasing number of online programmes using advanced information and communications technologies (ICT). However, the benefits are not always an improvement over traditional modes of learning. This paper introduces the findings of a recent survey, which aims to investigate the feasibility of using ICT to deliver the subject of construction technology to undergraduate students. The paper provides a holistic view of the feasibility, effectiveness, efficiency and potential benefits of applying e-learning to construction technology. The findings show that e-learning is considered to be a practical method to study undergraduate construction technology. It is useful to help the students improve learning independence, learning efficiency and, to a certain extent, learning effectiveness. E-learning is particularly useful for part-time students compared with full-time, due to differences in learning characteristics and requirements. Nevertheless, these improvements would not necessarily result in achieving a better examination result in the subject. Significantly, the findings reveal that the single mode of face-to-face learning is preferred to the e-learning mode for delivering the subject of construction technology. In addition, the benefits of ICT may not be fully exploited.

Swot Dimensional Analysis for Strategic Planning – the Case of Overseas Real Estate Developers in Guangzhou, China

China has been attracting overseas real estate developers (OREDs) with its expanding real estate market since the adoption of the Open Door Policy. This attractiveness has been enhanced by Chinas accession to the World Trade Organization and the Closer Economic Partnership Arrangement and is likely to remain for the foreseeable future. However, OREDs to conduct developments in China which adopts a socialist market-oriented approach is not without difficulties. The study has developed a SWOT dimensional analysis technique which is able to integrate the strengths and weaknesses of OREDs and also the opportunities and threats found in the market for formulating their (s)trategic plans and market positions. Apart from proposing a holistic model for OREDs’ strategic planning, the findings also suggested that OREDs in Guangzhou are in general strong in management and financial capacity but weak in understanding the market conditions. Building up a localized management team which understands the market and has good connection with local officials and business peoplė is of prime concerns.

The effects of monetary policy on real estate investment in China: a regional perspective

Monetary policy on real estate investment in China has had varying impacts across the country due to regional differences. A supply-determined model is used to measure the policy effects on property investment volume based on a set of regional data from 2003 to 2010. This research yields several important findings contributing to an understanding of uneven policy effects on the unbalanced regional markets. Firstly, it is revealed that the eastern coastal provinces in China have a higher dependence on bank loans for housing investment than that of the other inland provinces. Secondly, this research has disentangled the specific transmission channels of monetary policy in the property market. Bank loan supply, instead of interest rates, would be a potentially effective policy tool for the government in making property market adjustment. Thirdly, the eastern coastal provinces are more sensitive in their responses to the changes of monetary stances than the other non-coastal central and western provinces. Therefore, the government must take note of the significant heterogeneity arising from the regional differences in estimating the policy impacts, although monetary policy is uniformly employed in the nation most of the time.

The Changing Real Estate Supply and Investment Patterns in China: An Institutional Perspective on Affordable Housing

China’s housing reform from 1998 onwards represents an institutional transformation of the real estate industry to a buoyant commercialized market. The institutional transformations generated by the policy reforms have led to substantial changes in the mechanism of real estate investment and supply. Through an extensive literature review and data collection, this paper depicts an investigation of the changing systems of real estate investment and supply in China after the fundamental housing allocation reform. The discussion focuses on the social housing provision systems, the real estate financing systems of developers and house owners, and the changing roles of real estate investment and supply. Due to the shrinkage of direct investment from state budgetary funds, the low affordability of the general public and other difficulties, a multi-layer housing provision system which the government designed earlier is expected to be less operative, and would lead to a conspicuous market disorder with an insufficient supply of housing to accommodate less- affordable families. The marketization process sees the reduced roles of state intervention and the growing effects of market-forces. Eventually, the profit-oriented commercial developers have taken a more proactive role than the government in housing investment and supply, but in a somewhat mis-matched manner.

Exploration of the presale property market in China from an institutional perspective

Presales have been used as a major financing mode for real estate development in China. However, there have been limited researches studying the roles of different real estate market players impacting on the efficiency of the property presales, in particular, on the issue of asymmetric information in the market. The paper adopted an institutional approach to study the problems latent in the presale property market. Semi-structured interviews with professionals and industry practitioners were conducted and the findings suggested that the lack of market information, pseudo policy objectives and confusing roles played by major market players are the root of the problems. Restructuring of the institutional arrangement in regard to the financial channels for capital, risk management on developers, custody of the presale proceeds and commitment of the regulatory authorities are necessary in enhancing the market efficiency.