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Institutional Differences in European Metropolitan Commercial Real Estate Markets

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European Metropolitan Commercial Real Estate Markets

Part of the book series: Advances in Spatial Science ((ADVSPATIAL))

Abstract

The authors aim to extend previous literature on variations in returns across local office markets by examining the linkage of office and retail market dynamics to the institutional structure at the European metropolitan level. Previous literature suggests that return rates differ widely across local markets, substantiating the view that returns are intertwined with conditions at local level. Whether and to what degree differences in local markets relate to differences in institutions has not been addressed. This is the central issue of this chapter. The research design consists of three coherent steps to address the central issue. First, we address the issue of how institutions may determine differences in office and retail market dynamics. We use current contributions in literature, culminating in a concise review of literature on office and retail market behaviour and institutions. Second, we aim to measure the degree of differences in office and retail market returns. For this we use data across European metropolitan areas. Finally, we consider the interrelations between real estate markets and institutions to explain the observed differences. For this we model market returns now including the various institutional measures. These results indicate which and to what degree the various institutional measures explain observed differences in local commercial real estate market dynamics.

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Notes

  1. 1.

    Amsterdam, Barcelona, Berlin, Brussels, Budapest, Frankfurt, Hamburg, Istanbul, London, Madrid, Milan, Moscow, Munich, Paris, Prague, Rome, Stockholm, Vienna and Warsaw.

  2. 2.

    See info.wordbank.org/governance/wgi/index.asp.

  3. 3.

    See stats.oecd.org/ and ecb.int/stats/.

  4. 4.

    The WB Accountability index is highly correlated (−0.90) with the JLL Transparency Index (JLL 2008).

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Author information

Authors and Affiliations

  1. Department of Economic Geography, University of Groningen, 800, 9700 AV, Groningen, The Netherlands

    Ed F. Nozeman & Arno J. Van der Vlist

Authors
  1. Ed F. Nozeman
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  2. Arno J. Van der Vlist
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Corresponding author

Correspondence to Ed F. Nozeman .

Editor information

Editors and Affiliations

  1. University of Groningen Faculty of Spatial Sciences, Groningen, The Netherlands

    Ed F. Nozeman

  2. University of Groningen Faculty of Spatial Sciences, Groningen, The Netherlands

    Arno J. Van der Vlist

Appendix

Appendix

Variable

Definition

Source

Yield offices

Yield prime office

JonesLangLaSalle

Yield retail

Yield prime high street retail

Cushman&Wakefield

RENTM2 offices

Prime office rent per m2 (in € per year)

JonesLangLaSalle

RENTM2 retail

High street retail rent per m2 (in € per year)

Cushman&Wakefield

Stock offices

Stock prime offices (in 1,000 m2)

Cushman&Wakefield

Stock retail

Stock retail shopping centres (in 1,000 m2)

Cushman&Wakefield

Accountability

Government accountability

Worldbank

Corruption

Control of corruption

Worldbank

Stability

Political stability

Worldbank

GDP

GDP levels

OECD

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Nozeman, E.F., Van der Vlist, A.J. (2014). Institutional Differences in European Metropolitan Commercial Real Estate Markets. In: Nozeman, E., Van der Vlist, A. (eds) European Metropolitan Commercial Real Estate Markets. Advances in Spatial Science. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-37852-2_2

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  • DOI: https://doi.org/10.1007/978-3-642-37852-2_2

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  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-37851-5

  • Online ISBN: 978-3-642-37852-2

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