Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Modelling the drivers of the UK multi-let industrial property market: an exploratory study

Modelling the drivers of the UK multi-let industrial property market: an exploratory study Multi-let industrial (MLI) estates are an emerging £15 billion UK real estate asset class that can offer attractive returns, a diversified income base, constrained supply and extensive management opportunities to add value within an operational platform. This investment appeal is supported by the evolving MLI occupier market with the growth of small to medium enterprises (SME) requiring modern urban business space driven in part by technology advances offering new streams of supply chain connectivity between businesses and potential clients at a local level.Design/methodology/approachTo understand more about MLI properties, this study utilises a hedonic pricing model to quantify property values as a function of defined variables. The dataset used for this research is a sample portfolio of 26 multi-let industrial properties. The dataset was analysed alongside eleven physical, financial and locational factors. Interestingly, the hedonic pricing model results showed that only four characteristics are value-affecting across the selected properties: namely (1) Granularity of the property income, (2) Distance from the nearest motorway, (3) Distance to the nearest town centre and (4) Gross internal floor area. A chi–test confirmed that there was no significant difference between the modelled values and the supplied property valuations.FindingsThis preliminary study offers valuable insight into MLI property market drivers and could easily form a simple decision-making tool to examine potential MLI opportunities in this developing real estate asset class.Originality/valueIn detailing these key MLI property features, current research is limited and focused primarily on market commentary. New knowledge on the MLI property market can provide a platform creating interesting opportunities for fund managers with an intensive management engagement strategy. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Property Management Emerald Publishing

Modelling the drivers of the UK multi-let industrial property market: an exploratory study

Property Management , Volume 38 (4): 12 – Jul 15, 2020

Loading next page...
 
/lp/emerald-publishing/modelling-the-drivers-of-the-uk-multi-let-industrial-property-market-UKrWOU0HW8

References (27)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0263-7472
DOI
10.1108/pm-10-2019-0057
Publisher site
See Article on Publisher Site

Abstract

Multi-let industrial (MLI) estates are an emerging £15 billion UK real estate asset class that can offer attractive returns, a diversified income base, constrained supply and extensive management opportunities to add value within an operational platform. This investment appeal is supported by the evolving MLI occupier market with the growth of small to medium enterprises (SME) requiring modern urban business space driven in part by technology advances offering new streams of supply chain connectivity between businesses and potential clients at a local level.Design/methodology/approachTo understand more about MLI properties, this study utilises a hedonic pricing model to quantify property values as a function of defined variables. The dataset used for this research is a sample portfolio of 26 multi-let industrial properties. The dataset was analysed alongside eleven physical, financial and locational factors. Interestingly, the hedonic pricing model results showed that only four characteristics are value-affecting across the selected properties: namely (1) Granularity of the property income, (2) Distance from the nearest motorway, (3) Distance to the nearest town centre and (4) Gross internal floor area. A chi–test confirmed that there was no significant difference between the modelled values and the supplied property valuations.FindingsThis preliminary study offers valuable insight into MLI property market drivers and could easily form a simple decision-making tool to examine potential MLI opportunities in this developing real estate asset class.Originality/valueIn detailing these key MLI property features, current research is limited and focused primarily on market commentary. New knowledge on the MLI property market can provide a platform creating interesting opportunities for fund managers with an intensive management engagement strategy.

Journal

Property ManagementEmerald Publishing

Published: Jul 15, 2020

Keywords: Multi-let industrial (MLI) properties; Hedonic pricing model; Key property characteristics; Small to medium enterprises (SME)

There are no references for this article.