Laura Gabrielli

Uncertainty and feasibility studies: an Italian case study

Purpose – Uncertainty affects all aspects of the property market, but one area where the impact of uncertainty is particularly significant is within feasibility analyses. Any development is impacted by differences between market conditions at the conception of the project and the market realities at the time of completion. This paper sets out to address this issueDesign/methodology/approach – The feasibility study needs to address the possible outcomes based on an understanding of the current market. This requires the appraiser to forecast the most likely outcome relating to the sale price of the completed development, the construction costs and the timing of both. It also requires the appraiser to understand the impact of finance on the project.Findings – This allows the appraiser to address the issues of uncertainty involved and thus provide the decision maker with a better understanding of the risk of development. This technique is then refined using a “two‐dimensional technique” to distinguish between...

Market Value and Depreciated Replacement Cost: Contradictory or Complementary?

Purpose - In January 2005, the International Valuation Standards Committee (IVSC) published the International Valuation Guidance Note No. 8 entitled Methodology/design/approach - In this paper, we discuss the concept of market value and its relationship to DRC in an attempt to identify the principal areas of concern in the UK and, through the use of an Italian case study, show how the DRC approach can be adopted as an appropriate method (not basis) for calculating Market Value. Findings - It is probable that most valuers will still provide the DRC valuation using exactly the same calculation as they did before. They are likely to provide the same (relative to the valuation date) figure; the difference is that they will feel less easy about the robustness of that figure Originality/value - It is argued that the UK market has, for too long, hidden behind DRC being a basis of value that UK valuers now feel uncomfortable in reporting DRC as market value. They are uncertain with the valuation figure. However, this uncertainty can be addressed in other ways and a suggested “solution” to help the valuer overcome their discomfort with the market valuation is proffered.

Housing Supply and Price Reactions: A Comparison Approach to Spanish and Italian Markets

Italian and Spanish property markets have experienced a sustained period of growth since the mid-1990s until 2008 when both markets fell into rapid decline due to the worldwide Financial Economic Crisis (FEC). Although the economic impact of the FEC was similar, each country experienced different reactions in its respective real estate market, changes on house prices, building constructions or planning regulations. This paper presents a new supply equation for Italian and Spanish regional markets. A pool of EGLS/IV Two-Step GLS methods are used to account for cross-sectional heteroskedasticity with fixed effects in order to control space differences. The analysis has been developed at a regional level, and shows the variation in the responsiveness of the new housing supply to prices by region. The results show long-term price supply elasticity by regions, and the negative impact of exogenous shock. They also suggest that house markets follow similar patterns in several regions with elastics responses in most territories and stronger negative impact of credit crunch in Spanish than Italian housing development.

The relative importance of sector and regional factors in Italy

Purpose – The relative benefit of sector and regional diversification is a topic of continuing interest to academics, however, the issue has not previously been investigated in Italy. Additionally, previous studies have used geographically defined regions, rather than economically functional areas, when performing the analysis even though most would argue that it is the economic structure of the area that will lead to differences in demand and hence property performance. Therefore the purpose of this paper is to use the economically defined regions of Italy to test the relative benefits of regional diversification versus sector diversification within the Italian real estate portfolio.Design/methodology/approach – The paper uses the dummy variable methodology of Heston and Rouwenhorst on the sector and regional affiliation of 27 cities in Italy using annual data over the period 1989 to 2007 for three property‐type: residential, retail and offices and four economically defined regions: the North West, the N...

From Surface to Core: A Multi-Layer Approach for the Real Estate Market Analysis of a Central Area in Catania

The proposed study deals with the analysis of the real estate market in the quarter of San Cristoforo in Catania, trying to integrate different approaches to define its possible articulation in submarkets. The first one is a phenomenal type of approach that intends to represent some of the most manifest characteristics, and provides an initial hypothesis of classification of the cases (a census has been taken of) and delimitation of the segments, taking into account the ranges of prices registered inside the different classes of the characteristics. The second consists of an in-depth clustering analysis basing on three different hypotheses of three, four and five clusters respectively. The third one is a DRSA application, which is meant to extract from the studied sample a set of rules for the possible definition of a segment representing the general market rules. Given the complexity of the studied context, the results allow different interpretations and considerations of method.

Functions and Perspectives of Public Real Estate in the Urban Policies: The Sustainable Development Plan of Syracuse

This study deals with the problem of the negotiation between public and private actors in the urban planning, in the case study of the Plan for the Sustainable Development of Syracuse (Italy). The contribution focuses on the modalities of execution of the Plan that envisages the tool of the Public-Private Partnership (PPP). The study intends to verify the equity of the negotiation mechanism and the advantage gained by the public actor from conferring two large buildings to a Real Estate Fund. The contribution is structured in three parts. The first part provides the general programmatic and valuation frame referring to the features of the area. It describes the overall development perspectives and therefore the whole process of real estate development that would be supported by means of the contribution of the fund. The second part describes the implementation of a cash flow analysis based on a hypothesis of use of the buildings previously outlined. The third part provides the elements of the analysis of the investment that are retroactive on the design hypotheses converging on the value assessed to determine the quota of participation of the Municipality in the Real Estate Fund.

Gaps and Overlaps of Urban Housing Sub-market: Hard Clustering and Fuzzy Clustering Approaches

It has long been argued that the housing market is spatially subdivided within an urban area. The argument has important implications for explaining how the housing market works and describing the distinctiveness of each housing submarkets, having determined, a priori, its segmentation. The most commonly used method for identifying housing submarkets is based on cluster analysis, although hedonic analysis has been extensively used. The hedonic analysis is used to derive dimensionality of the housing market by estimating what attributes are significant factors influencing housing price. Those attributes or variables can then be used for cluster analysis. The paper proposes an analysis of the real estate market in San Cristoforo, Catania, trying to integrate two different clustering analysis approaches to defining its possible submarkets articulation. The first one is a hard clustering approach using the K-means method and hypothesizing different numbers of clusters. The second one can be considered a verification of the previous results: a fuzzy algorithm is applied to obtain the fuzzy set membership degree of each data point to housing submarkets defined within the examined urban area. The comparison between the results coming from the two different approaches suggests some reflections about the use of these powerful techniques for integrating the knowledge of the complex and multi-layered real estate markets in the urban recovery policies.

Valuing the historical heritage: the case of the Venetian Villas in Italy

Purpose The historic assets are heterogeneous and different to each other, and for this reason, consolidated valuation methodologies do not exist in practice or in the literature. It is, therefore, necessary to dwell on the study of a particular historic building type or category. The assessment process of the valuers of Venetian Villas was explored, focusing on the study of the valuation function construction. The paper investigated if a possible value function, based on the partition of the characteristics, which significantly influence the value, exists and it is generalizable to the whole set of Venetian Villas. The purpose of this paper is to contribute knowledge on the economic valuation of Venetian Villas. Design/methodology/approach An application of Hedonic Pricing study to a database of 71 Venetian Villas has been tested. This statistical procedure allowed the authors to discover which results in a percentage of property values can be attributed to the historical characteristics of a building. Using a multiple linear regression and its variables an analysis of residuals and data relating to the variance has been performed. Findings This research identifies and proposes, therefore, a valuation approach that can be generalizable to the whole set of Venetian Villas (over 4,000 properties). The models show that the most important variables which influence the value of the villas are: age, internal and external area, maintenance conditions, and author. This model could be used for future valuations of the same type of asset. Originality/value The model enables valuers to address better to the property valuation of the Venetian Villas through the valuation functions, which suggest which are the main features which focus in the case of a Venetian Villa valuation and what impact they have on the value asset. The model can be specifically used for valuation reports in the enhancement project of such properties.

When Efficiency Is Not Enough: Should Equity be Embedded in Decision Making and Evaluation?

The Encyclical “Laudato si’” pushes scholars and researchers to reflect on the fact that «We are faced not with two separate crises, one environmental and the other social, but rather with one complex crisis which is both social and environmental» and, at the same time, that «Strategies for a solution demand an integrated approach to combating poverty, restoring dignity to the excluded, and at the same time protecting nature» (§ 139). This means that an integral ecological approach, based on a new paradigm of justice and equity, should be adopted. The neoclassical view of economics sharply separates the economic and the social sphere, and, in so doing, it has excluded the problem of inequality from economic analysis. Economic evaluations (cost-benefit analysis) claim to be able to consider intra- and intergenerational equity, by applying a system of distributional weights and a social-discount rate. Nonetheless, they remain anchored to the efficiency criterion. The paper proposes a reflection on whether to adopt new evaluation approaches and tools in decision making when the equity criterion is called into question. In particular, it suggests two possible ways. Related to intra-generational justice, the first approach suggests the adoption of evaluation strategies that are able to consider the distributional effects of the project on the capacity of the participants to influence the decisions (deliberative democratic evaluation). Related to intergenerational justice, the second approach fosters the adoption of the precautionary principle, which suggests an extremely cautious, risk-averse attitude, in defence of future generations.

Buildings energy retrofit: dealing with uncertainty

Citation for published version (APA): Jensen, J. O., Gram-Hanssen, K., & Friis, F. (2016). Local initiatives for motivating Danish house-owners for energy improvements. In Sustainable Built Environment Conference 2016 in Hamburg : Strategies, Stakeholders, Success factors, 7th 11th March 2016 ; Conference Proceedings (1 ed., pp. 826-835). Hamburg: ZEBAU, Hamburg. https://doi.org/10.5445/IR/1000051699This paper considers two linked architectural projects designed and delivered by the author. The first considered the challenges associated with designing and building a energy efficient prefabricated dwelling in just six days, using predominately locally sourced, organic, ‘compostable’ materials whilst creating no waste on site. 5 million viewers a night on UK TV saw this program. However, frustrated by the lack of credible communication of the challenges associated with this project that the medium of TV provided, the author was keen to re-build this project on campus at the University of Brighton where he taught, so that he could involve students in all aspects of the process, thus sharing the learning experience and proving that ‘live’ construction projects could be a useful pedagogic tool. This paper considers why the design emphasis of the second project went from ‘locking carbon’ and zero waste on site, to constructing with waste and proving “that there is no such thing as waste just stuff in the wrong place”. http://arts.brighton.ac.uk/business-and-community/wastehouse