Nasir Daud

Framework for integrating sustainability issues into valuation of non-market industrial real estates

This paper builds upon earlier studies and viewpoints relating to sustainability in real estate valuation, summarising the key results into three major valuation approaches. These approaches focused mainly on commercial and residential properties, excluding specialised industrial properties, for which no market-based evidence exists for their valuations. The paper closes the gap by venturing to provide a framework and valuation approach for integrating sustainability issues into non-market industrial real estate valuation. It finds a conceptual framework and a non-market valuation approach that should encourage firms to invest in sustainability, and assign scarcity value to environmental absorptive capacity. The study proposes a Delphi technique which attaches a sustainability obsolescence factor to an industrial operation relative to the appropriate sustainability criteria set by the local green rating or environmental authorities. It concludes that there is an impact-compliance dimension to sustainability in real estate valuation, and that appraisers should give sustainability-compliant opinions to their clients to drive sustainability.

Examining the Methods for Investigating Behavioral Clues of Special-Schooled Children.

This article discusses the authors’ use of a combination of methods to understand the engagement of special needs children with design features in sensory gardens at two schools in Britain. In addition to observation and behavior mapping, we interviewed landscape architects, teachers, and therapists to anticipate the children’s behavior when experiencing sensory gardens. We report how these groups’ anticipations differed from what we observed. While the groups anticipated that aesthetic value relates significantly to users’ behavior in the garden, we observed that sensory value has a stronger bearing on the behavior. The potential of this finding is important for design studies.

Apartment foreclosure discount in Kuala Lumpur

With the exception of anecdotal information which suggests that auctioned or foreclosed properties in Malaysia tend to be sold at a deep discount, no study has thus far attempted to quantify this foreclosure discount. This notion is explored by comparing the listing price of auctioned apartments with comparable non-auctioned apartments located within the same building blocks in Kuala Lumpur during the period 2009–2014. The property auction market is predominately relied upon to dispose of foreclosed properties in Malaysia. It is found that foreclosed apartments are listed at a discount of 33.4% as compared to apartments advertised in the private negotiated market. This discount is attributed to “stigma effect” associated with auctioned properties and the imperfections of the Malaysian auction market such as auctioned properties may not carry a clean title, potential buyers cannot view the properties prior to auction and may not obtain vacant possession of the properties. The “proxy effect” was minimal since the matching strategy adopted would have netted out the differentials in locational and neighbourhood characteristics between auctioned and non-auctioned properties.

Comparison of REIT Dividend Performance in Nigeria and Malaysia

The global survey of Real Estate Investment Trusts (REITs) has indicated a high performance nature of REIT as an investment vehicle for the real estate sector. Studies have been conducted across the REIT markets of America, Europe and Asia-Pacific with similar result of high income yield to the investors. However, there have been no report of the Africa REIT except South Africa Property Unit Trust and Property Loans Stock that features in the EPRA Global REIT survey. In an attempt to assess performance of Nigeria REIT and bring it to global awareness, this paper investigates the performance of Nigeria REIT (N-REIT) in its 7 years of existence (2007 to 2014) using Malaysia REIT (M-REIT) as a benchmark and possible improvement. The study adopted risk adjustment return analysis of the dividend distribution over the period of the REITs establishment. The study found that Nigeria REIT underperforms the benchmark, Malaysia REIT, both in terms of average return 4.8% and risk adjusted return -6.77% per annum against the Malaysia REIT 7.5% and 2.47% respectively. There is no significant differences in the risk return ratio for the two REITs. The underperformance of the Nigeria REIT suggest that the superior performance of REIT does not apply across all REIT markets, suggesting that differences in REIT structure and features can be a determining factor(s) in investment performance. The study recommends an increased capitalisation, market transparency and external management option for N-REITs performance enhancement. The non-evaluation of multivariate effect of these factors in this study is considered to be a limiting factor. Such study could be a future research focus. Key words: Dividend return, Malaysia, Nigeria, REIT performance, risk adjusted return.

Macroeconomic Determinants of Non Performing Property Loans in Malaysia

Non-performing property loans pose a huge threat to any country’s economic stability. This paper examines the effects and relationships of macroeconomic factors in determining the possible outcomes of non-performing real estate loans in Malaysia. It also examines some banking sentiments in their receptivity towards the conditions in terms of number of loans approved, rejected and applied. Using Stepwise Regression Approach, it was shown that Gross National Income responded significantly negative to the number of Non-performing Property Loans in Malaysia relatively close to the study conducted in Greece where GDP growth seems to be the dominant and main determinant in terms of non-performing loans compared to other macroeconomic determinants. At the same time, Unemployment responded significantly positive, where levels of unemployment would cause the inability of private individuals to repay their loans or debts. At the same time, sentiments of consumers shown that Applications for Non-residential Loans decreases as Non-performing Property Loans increases. Surprisingly, this study also shows that as Non-Performing Property Loans increases, the number of Loans Approved for Non-Housing Property Loans increases as well. This shows that Banking Sentiments in loan approvals are not affected by the conditions of economy when it comes to Non-Residential Properties.

Seller ethnicity and property characteristics: foreclosure sales in Malaysia

Purpose - The purpose of this paper is to examine the determinants of property sale probability and sale price at auction in Kuala Lumpur, Malaysia. Design/methodology/approach - A two-stage Heckman sample selection model is used for this research. The first stage involves the estimation of a probit model on a successful sale. The second stage introduces an additional selection variable, the inverse Mills ratio, as an explanatory variable to the sale price estimation equation. Findings - The authors find that Chinese-owned auctioned properties have higher sale probability and are sold at higher prices as compared to Indian and Malay-auctioned properties. Properties auctioned by the largest auction house outperformed other smaller auctioneers. Auction characteristics such as proximity to the city center, number of previous auction attempts and number of online viewers are positively related to sale price and sale probability. Social implications - The findings on the substantially lower sale price obtained by Malay and Indian borrowers compared to their Chinese counterparts imply that it is much harder for these borrowers to be relieved from financial distress. The two plausible explanations offered in this paper for this price differential, i.e. racial residential segregation and ownership restriction, warrant further study. Originality/value - First, the authors consider the explanatory power of seller ethnicity, number of online viewers and auctioning route which are new to the literature. Second, they use a Heckman model that addresses possible selection bias of sold properties. This methodology is unexplored in the auction literature.

The validity of the classical Delphi applications for assessing the industrial sustainability-correction factor: an example study

Purpose The study aims to build up knowledge for collateral exploration of the classical Delphi survey method for assessing the industrial sustainability-related correction factor using a real field study in Nigeria. Design/methodology/approach The paper elicits the character and the operational approaches using an example study to provide a critical review of the method. It estimates the correction factor for appraisal purposes by transforming expert opinion into a valid group consensus. Findings The work considers the specific parameters of the method, design and analysis for interpretation to prove the reliability and the validity for the research results. Moreover, it emphasises that the validity of the traditional Delphi research demands cautious theoretical and practical applications by the coordinating researcher. The paper establishes the current validity and effectiveness of the classical Delphi method of foresight and streamlines their efficient implementation for theory building despite its numerous weaknesses. Originality/value It explores desirable futures for the method while analysing what is possible and probable.