Éamonn D'Arcy

Market maturity and property market behaviour: A European comparison of mature and emergent markets

Summary This paper explores the conventional notion of property market maturity, assesses its usefulness, and works towards a new paradigm of property market performance which centres on the explicit consideration of market maturity in addition to the usual economic determinants. A checklist of maturity characteristics is established and used as a framework for assessing the maturity of three case‐study office markets. London is confirmed as a mature market on the conventional criteria while Barcelona and Milan are identified as emerging markets. The case studies suggest that maturity needs to be articulated in more detail than is normally the case and that conventional forms of maturity may carry disadvantages as well as advantages. The paper concludes that the concept of maturity is too complex to provide a simple explanation of comparative property market activity, that maturity does not necessarily imply market efficiency, and that there is no single evolutionary path which will be followed by all pro...

Territorial Competition and Property Market Process: An Exploratory Analysis:

This paper argues that the emerging research on territorial competition should be supplemented by an explicit consideration of the role of real property, and property market process, in shaping urban competitiveness. The competitive position of urban areas depends directly on the existing stock of property and the flow of new or modified buildings. Equally important, however, are the institutional form and structure of the property market, and the process by which economic pressures for change are translated into property market activity. Evidence from six contrasting European cities demonstrates marked differences in the institutional environment of their respective property markets. These differences are explored in terms of their potential significance for the determination of urban competitiveness. The illustrative case studies provide a schedule of property market characteristics which can be used to inform explanations of urban economic change and to support the design of policies for territorial competition.

An econometric analysis and forecasts of the office rental cycle in the Dublin area

This paper presents an econometric investigation of office rent determination in Dublin, a small European market, over the twenty eight year period 1970-1997. Using a single equation specification based on demand and supply interactions, changes in real GDP lagged one period and changes in the office stock lagged three periods were found to be the most important determinants of changes in real rents in this market. When the forecasting adequacy of the estimated model was tested and compared with forecasts derived from commonly used alternative statistical methodologies, the forecasts based on the estimated model outperformed the alternatives.

The Property Market and Urban Competitiveness: A Review:

This paper examines the role of the property market in determining urban competitiveness. For these purposes, urban competitiveness is taken to mean the ability of a city to exploit or create comparative advantage, and thereby to generate high and sustainable economic growth relative to its competitors. The property market describes the institutional arrangements through which real property is used, traded and developed, and the wide range of actors involved in these processes. It seems clear that the property market will in ̄ uence urban competitiveness directly through the provision of suitable accommodation for economic activity and indirectly through its cumulative contribution to the built environment (D’ Arcy and Keogh 1997a). However, the majority of research on urban competitiveness has ignored or downplayed the role of the property market. This paper reviews a diverse and emerging property market literature in an attempt to identify its implications for urban competitiveness, and to formulate a workable analytical approach for the integration of property market and urban economic theory in the promotion of competitive urban development. Interest in urban competitiveness has grown rapidly in recent years. The burgeoning research effort has been multidisciplinary and wide-ranging, attracting contributions from both policy-makers and academics (see, for example, CEC, 1992, 1997; Cheshire and Gordon, 1995, 1996; Jensen-Butler et al., 1997; Oatley, 1998; Porter, 1995; Scott and Soja, 1996). These studies have highlighted the importance of issues such as industrial structure, technological innovation, entrepreneurship, governance, policy action, and even architecture and art, as key determinants of urban competitiveness. They have ranged in coverage from discussions of the broad process of competition between cities (Cheshire and Gordon, 1995, 1996; JensenButler et al., 1997) to the speci® c determinants of inner-city competitive advantage (Porter, 1995). While most research has avoided any detailed consideration of its role, some recent work has begun to explore the property market as a potentially important factor in shaping urban competitive advantages, economic growth and development outcomes (Ball, 1986, 1994, 1996; Carbonaro and D’ Arcy, 1993; D’ Arcy and Keogh, 1997a, 1998; Fainstein, 1993; Garreau, 1991; Healey et al., 1992; van der Krabben, 1995).

National economic trends, market size and city growth effects on European office rents

This paper extends existing research on European office markets. Using a time-series cross-sectional methodology it examines the influence on office rents in 22 European cities of national economic conditions, market size and measures of economic growth and change in the city economy over the period 1982-94. The results demonstrate the significance of national real GDP changes and real interest rates in explaining European real office rental movements. In contrast, market size and city growth effects appear to have an insignificant impact on office rents.

Towards a property market paradigm of urban change

Conventional treatments of urban change almost uniformly ignore the role of land and property markets as essential mediators of such change. The urban built environment is assumed to be a passive adapter to structural change. However, given the complexity of property market process—in particular the disparate nature of market actors, decision rules, and institutions, the immutable characteristics of property, and the obvious constraints imposed by the existing built environment—simple adaptive adjustment is unlikely to take place. These factors can themselves be expected to play an important part in shaping urban growth and development outcomes. In response to these concerns, we propose a property market paradigm of urban change and examine its relevance in the context of six major European urban regions. The results suggest that this approach can provide a more holistic understanding of contemporary urban change than that offered by conventional analysis.

Local economic development: changing the parameters?

Based on an examination of recent thinking on the determinants of, and approaches to, local economic development the paper proposed a revised set of parameters within which to examine and evaluate this phenomenon. The paper constructs a comparative analysis of three approaches to local economic development (LED), enterprise culture, industrial districts and innovative milieu, within a set of focused criteria drawn from the literature on endogenous development. This analysis suggests a more generalist approach to local economic development that highlights the importance of understanding the evolution of a development ethos, entrepreneurial relations and the scope for non-local actor participation as key aspects of this development process.

The evolution of institutional arrangements to support the internationalisation of real estate involvements: Some evidence from Europe

Purpose – The purpose of this paper is to provide an analysis of the evolution of institutional arrangements to support the internationalisation of real estate involvements in European markets.Design/methodology/approach – Using a broadly institutional economics approach to markets the paper first outlines a market rational for institutional arrangements to support internationalisation and then examines how such arrangements have evolved in the context of European real estate markets.Findings – Significant new institutional arrangements have evolved to support the internationalisation of real estate involvements in Europe. The need to address the information costs and new information requirements necessitated by internationalisation has been a key driver of institutional formation. Both regulatory and informal barriers to internationalisation have also been important drivers of the evolution of new institutional arrangements to support internationalisation. Taken collectively the new institutional arrange...

Real Estate Education in Europe: Some Perspectives on a Decade of Rapid Change

Purpose – The purpose of this paper is to provide a profile of the structure of real estate education provision in Europe, its key recent drivers and some ideas for its future development.Design/methodology/approach – The paper provides an analysis of recent trends in provision based on the European course accreditation data provided by the Royal Institution of Chartered Surveyors (RICS). The structure of provision is examined within the context of the significant changes which have taken place in the structure of European real estate markets as a means of identifying its key drivers. The analysis goes on to consider the opportunities presented for the future development of provision by two important initiatives the “Bologna Process” and the “European Real Estate Society Education Seminar”.Findings – There has been considerable expansion in the provision of real estate education in Europe in recent years. The postgraduate level both full‐time and part‐time has been established as the dominant mode of prov...