Unravelling liquidity in International Commercial Real Estate Markets (Funder: IPF)
Research Team: Steven Devaney (CASS Business School), Nicola Livingstone (Bartlett School of Planning, University College London), Pat McAllister (Henley Business School) and Anupam Nanda(Henley Business School)
Liquidity is a multidimensional phenomenon. Transaction timing and costs, and the ability to sell without affecting the asset price are examples of how liquidity can impact investors' behaviour and institutional asset portfolios. Real Estate markets are often seen as “illiquid”. The research sought to determine how liquidity can inform investor decision processes in the commercial sector. Recent research has looked at liquidity in international real estate markets within different cities and countries. The research shows that internationally, markets differ in their transaction times, costs and processes. As expected, leading global cities have the highest amount of absolute transaction activity, which appears to be a useful proxy for liquidity.
Financial Viability Appraisal in Planning Decisions: Theory and Practice
In England, appraisals of the financial viability of development schemes have become an integral part of planning policy-making, initially in determining the amount of planning obligations that might be obtained via legal agreements (known as Section 106 agreements) and latterly as a basis for establishing charging schedules for the Community Infrastructure Levy (CIL). Local planning authorities set these policies on an area-wide basis but ultimately development proposals require consent on a site-by site basis. It is at this site-specific level that issues of viability are hotly contested.
This research examined case documents, proofs of evidence and decisions from a sample of planning disputes in order to address major issues within development viability, the application of the models and the distribution of the development gain between the developer, landowner and community. The results have specific application to viability assessment in England and should impact on future policy and practice guidance in this field. They also have relevance to other countries that incorporate assessments of economic viability in their planning systems.