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Data Dilemmas in Forecasting European Office Market Rents

Author

Listed:
  • Patrick McAllister

    (Department of Real Estate & Planning, University of Reading)

  • Paul Kennedy

    (INVESCO Real Estate)

  • Stephen Lee

Abstract

This paper uses data provided by three major real estate advisory firms to investigate the level and pattern of variation in the measurement of historic real estate rental values for the main European office centres. The paper assesses the extent to which the data providing organizations agree on historic market performance in terms of returns, risk and timing and examines the relationship between market maturity and agreement. The analysis suggests that at the aggregate level and for many markets, there is substantial agreement on direction, quantity and timing of market change. However, there is substantial variability in the level of agreement among cities. The paper also assesses whether the different data sets produce different explanatory models and market forecast. It is concluded that, although disagreement on the direction of market change is high for many market, the different data sets often produce similar explanatory models and predict similar relative performance.

Suggested Citation

  • Patrick McAllister & Paul Kennedy & Stephen Lee, 2007. "Data Dilemmas in Forecasting European Office Market Rents," Real Estate & Planning Working Papers rep-wp2007-10, Henley Business School, University of Reading.
    • Handle: RePEc:rdg:repxwp:rep-wp2007-10
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    File URL: http://www.henley.reading.ac.uk/rep/fulltxt/1007.pdf
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    References listed on IDEAS

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    3. De Wit, Ivo & van Dijk, Ronald, 2003. "The Global Determinants of Direct Office Real Estate Returns," The Journal of Real Estate Finance and Economics, Springer, vol. 26(1), pages 27-45, January.
    4. N. Gregory Mankiw & Ricardo Reis & Justin Wolfers, 2004. "Disagreement about Inflation Expectations," NBER Chapters, in: NBER Macroeconomics Annual 2003, Volume 18, pages 209-270, National Bureau of Economic Research, Inc.
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    6. Quan, Daniel C & Quigley, John M, 1991. "Price Formation and the Appraisal Function in Real Estate Markets," The Journal of Real Estate Finance and Economics, Springer, vol. 4(2), pages 127-146, June.
    Full references (including those not matched with items on IDEAS)

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