Colin Lizieri

ABSTRACT Property portfolios are traditionally constructed by diversifying across geographical areas, property types or a combination of both. In the UK it is normal practice to use regions rather than towns or local markets areas as the geographical divisions. In this paper cluster analysis is used to construct homogeneous groups from 157 UK local markets using commercial property returns. The results show strong property type dimensions and only very broad geographical dimensions in the clusters. These clusters are found, generally, to have temporal stability with changes in cluster membership explained by the changing economic geography of the UK. The cluster-derived groupings are used to derive efficient investment frontiers and are compared to frontiers based on conventional heuristic groupings. It is shown that strategies based on parsimonious cluster-based groupings, appropriate for smaller investors, generate results that are comparable to those of conventional groupings and capture the main drivers of property performance.

Skyscrapers are an intellectual challenge for urban analysis because of their imposing visual presence in the city landscape, and because of their environmental and real estate impacts. These characteristics however have not received much attention in the literature, particularly in analyses about Latin American cities. In this paper, we describe and test four theories about record-breaking buildings height: traditional microeconomic theory, game theory, business cycle, and global cities. We use a 2000–2012 panel database of 29 cities from 10 different Latin American countries, in order to contrast the contesting explanations about buildings’ height. We design a baseline model and then, using four different estimation techniques and diverse specifications, find that traditional theory and more strongly, global cities are good predictors of buildings’ height.

We use information of the period 2000–2010 to assess the land market neutrality of a Land Value Development Tax (LVDT) in Bogota (Colombia). This city introduced the LVDT in 2004 and it offers an excellent vantage point for observation of its effects because of these reasons: (a) the LVDT follows a clear spatial and temporal application process; (b) the LVDT is applied over an extended metropolitan area regulated by a single master plan throughout all the years of application of the tax; (c) the city comprises a single public authority for revenue and taxation purposes; and (d) there has been no previous historical experience with the use of this type of land exaction in the city or its region. The LVDT is a one-time exaction levied where regulatory or infrastructural state interventions determine price increases, making it a difficult assessment subject when compared to the pure land tax. However, the aforementioned characteristics of our case study allow us to test its static (lowering of land prices) and dynamic (no development timing effects) neutrality in an emerging urban environment, using single and multi-equation spatial panel techniques.