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Paper: eres2012_111
| Paper title: | Future value of obsolete offices |
| Authors: | Hilde Remøy and Jurrien De Koning |
| Summary: | Studies of several office markets indicate the importance of building and location attributes in relation to office user preferences. It is common practice to use hedonic pricing models to describe the relationship between rental levels and building and location attributes. However, office buildings that have been vacant for a long period of time in a market with few transactions are hard to assess, and another approach to value these buildings is needed: instead of considering the building’s current use, the future possibilities and use value of the buildings should be considered. This study examines the opportunities for investors and owners of vacant office space in a market where few transactions took place, aiming to reveal whether adaptation of obsolete office buildings can contribute to an increased future value of these buildings. Additionally, this paper examines whether this approach can contribute to an improved local office market. Subsequently, this paper answers the following questions: Which opportunities do owners and investors have for dealing with obsolete office buildings? What influence will their actions have on the (local) office market? The office market studied in this paper is Amsterdam with a focus on the submarket Amsterdam South east which holds a substantial part of the Amsterdam office stock (1 million square metres, 15% of the Amsterdam office stock). The vacancy level of this submarket is near 30% and among the highest in Europe. The data used to answer the questions above were delivered by the research department of Cushman & Wakefield Amsterdam. The building and location characteristics of 104 office buildings were studied, which amounts to two third of the offices in Amsterdam Southeast. |
| Type: | normal paper |
| Year of publication: | 2012 |
| Series: | ERES:conference |
| Download paper: | |
| Citation: | Hilde Remøy and Jurrien De Koning (2012). Future value of obsolete offices. 19th Annual European Real Estate Society Conference in Edinburgh, Scotland, http://itc.scix.net/paper/eres2012_111 |
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