The Impact of Planning on Local Business Rents

Henneberry, John; McGough, Tony; Mouzakis, Fotis

doi:10.1080/00420980500035261

Cited by 15 publications

(16 citation statements)

References 24 publications

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“…Besides, location choices of private economic activities exert important constraints upon urban land rent (LaFountain, 2005), and on offices prices (Henneberry et al, 2005). Although computation of the impacts exerted by different variables on offices prices is straightforward Jones, 1998, 2002;Nappi-Choulet et al, 2007;Nitsch, 2006), the same does not necessarily hold true for land values, because political, economic and psychological factors, together with property rights and planned uses and regulations mingle altogether and strongly impact on their values.…”

Section: Discussionmentioning

confidence: 99%

Land economic rent computation for urban planning and fiscal purposes

Rebelo

2009

Land Use Policy

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a b s t r a c tThis article proposes an innovative methodology to compute economic rents of land designed to current or potential offices uses. It consists in the establishment of a cause-and-effect relation between offices' price levels and correspondent levels of land rent, considering the main factors that influence property prices, the ones that guide public and private activities' location decisions and the inter-dependencies between land and real estate property markets. The rationale subjacent to this research is that land economic rent is determined by the difference between offices market price and a set of costs correspondent to land acquisition, planning and building processes, and a profit margin. An assessment of surplus values is provided in order to compute it as the difference between total land market value (land economic rent plus economic return on land use) and correspondent tributary patrimonial-value according to legal valuation proceedings (settled on property law). In order to reach these goals, variables that exert influence on urban planning and municipal management were identified, an urban management information system was designed and implemented, and an integrated and interactive model to support decisions in urban planning -concerning real estate offices and land prices and characteristics -was developed. These tools were applied as a case study to Oporto city (Portugal). They embody updating functionalities, setting up as an on-going support to policies of municipal land use management (particularly applied to offices uses). A proposal is made to integrate similar models in territorial plans as valuation tools to support better approaches to assess the impact of planning decisions on real estate and land values, thus informing a more equitable, efficient and local-based tax basis. Implications of this analysis for urban planning and fiscal settings are proposed.

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Section: Discussionmentioning

confidence: 99%

Land economic rent computation for urban planning and fiscal purposes

Rebelo

2009

Land Use Policy

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“…Henneberry et al (2005) identified the concept of agglomeration economies as an important link between urban theory and property economics. Their study suggested that the locational concentration of all three major commercial property sectors (offices, retail and industrial) plays a role in the determination of business rents.…”

Section: Theory and An Empirical Modelmentioning

confidence: 99%

Geographical externalities of local real estate markets

Mouzakis

Henneberry²

2008

Journal of European Real Estate Research

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Purpose -Despite the recent trend of off-shoring branches of UK services industry to remote locations, urban theory has yet to enlist a theory of industrial rents that formally takes into account the properties of substitution between locations. The purpose of this paper is to elaborate on the Fujita, et al. model in order to develop theoretical foundations for a pricing theory of contemporary commercial real estate markets. Design/methodology/approach -The paper employs panel data methods for the simultaneous estimation of local market rent structures, which include a complex of spill-over effects from all other parts of the national market. The estimations are based on time series of locally adjusted estimates of tenancy demand and supply proxies for 48 UK office centres. Influences from the entity of UK regions are considered by applying a variety of deterministic and stochastic structural variability tests. The estimated structures are subjected to multivariate co-integration tests for an examination of the stability of structural differentials. Findings -The paper appears to find considerable support to the hypothesis that rental spill-overs exist across the network of office centres in the UK. It suggests that the structure of these markets is characterised by certain properties of substitution and complementarity that have generally been observed in a wide range of real consumer or producer markets. This finding is critical to the development of a policy theory for national planning, which takes into account the impacts of local planning policies on national aggregate economic welfare. Research limitations/implications -This analysis is limited by the unavailability of a coherent theoretical micro-economic framework, which may be the focus of further research. Originality/value -The focus of this paper is on offices and business services industry but the principles can be extended to include industrial space. The paper questions some of the central assumptions and methodological approaches used in existing industrial location theory. It proposes a model that considers location pricing and allocation in relation to strategies to improve the spatial organisation of multinational services firms.

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“…Henneberry et al (2005) develop a multi-equation model of rental values and development activity in an attempt to isolate the impact of planning constraints from other economic drivers of property values. The relative constraint imposed by local planning regimes is proxied by the proportion of applications approved.…”

Section: Planning Policy Change and The Workings Of The Retail Propermentioning

confidence: 99%

Planning Policy and Retail Property Investment in the UK

Catherine¹,

Watkins²

2011

Urban Studies

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Empirical evidence suggests that planning policies significantly impact on investment property market performance in the UK. It is less clear, however, how information about the planning policy environment feeds into investment decision-making. This paper seeks to explore this issue. It reports on interviews with the property investment community and focuses on the decision to invest in the retail sector. The paper uses a six-stage model of the investment decision-making process as a framework for analysing the way in which concerns about policy impact on behaviour. The results suggest that an understanding of the policy environment and the development of a relationship with local planning authorities are most important in the post-acquisition asset management stage of the investment process. The research also reveals variations in access to policy intelligence and that approaches to analysis of the likely effects of planning regimes vary with fund type and strategy.

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The Impact of Planning on Local Business Rents

Cited by 15 publications

References 24 publications

Land economic rent computation for urban planning and fiscal purposes

Land economic rent computation for urban planning and fiscal purposes

Geographical externalities of local real estate markets

Planning Policy and Retail Property Investment in the UK

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