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Paper eres2015_285:
Cyclical and Structural Components to Yield Movements: The Case of Central London Offices

id eres2015_285
authors Lown, Keith; Michael White
year 2015
title Cyclical and Structural Components to Yield Movements: The Case of Central London Offices
source 22nd Annual European Real Estate Society Conference in Istanbul, Turkey
summary The central London office markets have entered a period where, in every sub-sector, historically low prime yields have been registered. In more normally recorded market circumstances the phenomenon of mean reversion tendency would be expected to have a moderating impact on yield compression at this stage in the property cycle. However, in London other powerful influences could be neutering the expected reversion to mean principle. Essentially these are: The sheer weight of capital arriving in London from predominantly middle eastern and far eastern sources; the emergence of London as one of, if not the, pre-eminent global safe haven for international real estate investors, and a desire for wealth protection over investment return from large sections of the global investment community.__In these circumstances, could London be argued to have developed a large degree of immunity to a number of the traditionally accepted key influences on yield profile? (for example UK GDP growth or relatively modest movements in rental levels). In addition, have some influences risen in their importance and others waned? This research seeks to identify the key impacts on yield profile that have traditionally been recognised; determining if there are any new key impacts; and quantifying the likely degree of influence on net initial yield composition that these component forces have._
keywords Yields, Mean Reversion, Offices, Cycles
series ERES:conference
type paper session
email keith.lown@ntu.ac.uk
content file.ppt (2,738,568 bytes)
discussion No discussions. Post discussion ...
ratings
session Market Research, Analysis & Forecasting
last changed 2015/07/08 18:06
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