Determinants of industrial land prices in The Netherlands: a behavioural approach

Ploegmakers, Huub; Vor, Friso de

doi:10.1108/jerer-04-2015-0016

Cited by 5 publications

(2 citation statements)

References 83 publications

(82 reference statements)

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“…Kowalski and Paraskevopoulos (1990) identified two dimensions to support the negative urban rent gradient, namely the quantification of location to CBD and property's exposure to the surrounding environment. Industrial real estate tends to locate within segmented submarkets to benefit from aggregation of neighbourhood effects and amenities (Ploegmakers and Vor, 2015;Zheng et al, 2017). The monocentric-oriented measure of radial distance, hence, may fail to capture the price dynamics in the industrial market that takes the form of aggregated submarkets (Heikkila et al, 1989).…”

Section: Development Land Valuation Accuracy In Chinamentioning

confidence: 99%

Development land valuation accuracy in China – a case study of Beijing

Dou¹,

Hemphill²,

Lim³

2020

JPIF

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PurposeThe paper aims to quantitatively investigate vacant industrial land valuation accuracy in China, given the importance of the industrial market as an underlying pillar to promote urban growth especially in emerging economies.Design/methodology/approachIn China, the government formulates a Land Benchmark Price (LBP) to serve as a price reference point to sell land rights. To gain an in-depth understanding of the valuation practice by LBP, this paper uses correlation analysis to investigate the varying dynamics between the transaction-based prices and LBP appraisal-based estimates. Furthermore, a margin of error examination investigates the distortion in LBP land appraisals, with an amended LBP presented to improve the accuracy of the current LBP method.FindingsDifferent influencing factors are identified to impact the actual market transaction prices and the LBP construction, leading to a large discrepancy in industrial land appraisals. A systematic problem is recognised that the construction of the LBP follows urban bid curve theory, whereas the land transaction prices do not, demonstrating that an urgent LBP update is needed to capture the market dynamics for industrial market.Practical implicationsThe paper sets out discrepancies in valuation accuracy surrounding the application of the LBP valuation approach in China. This has practical implications for valuers in terms of raising their awareness of the deficiencies in the approach and the pitfalls they need to guard against in their appraisals. It also has implications for developers and investors who rely on valuer appraisals to assess the viability of land purchases; hence, they need to express caution in the appraisal advice sought. Finally, the results demonstrate to the standard setters how they need to modify the LBP equations to better capture market dynamics.Originality/valueThe paper examines valuation accuracy in transitional economies, through valuation differentials between appraised price and the transacted price. The value of the work lies in the analysis of the fundamental differentials between market price and appraised value, which is of importance to investors/developers, practicing valuers, as well as government officials responsible for setting the valuation standards.

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Section: Development Land Valuation Accuracy In Chinamentioning

confidence: 99%

Development land valuation accuracy in China – a case study of Beijing

Dou¹,

Hemphill²,

Lim³

2020

JPIF

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“…From a global perspective, the impact of industrial land on economic growth has received attention. In the countries such as the United Kingdom, the Netherlands, Singapore, Japan, and China, industrial land supply has become a growing concern for the governments (Cheshire et al., 2007; Louw., 2000; Ploeg et al., 2015; Ploegmakers & Vor, 2015). Local governments can reduce the price of industrial land and expand industrial land scale to increase short‐term fiscal revenue and long‐term stable tax revenues, boost employment, attract capital inflow, promote regional economic development opportunities.…”

Section: Introductionmentioning

confidence: 99%

Two‐stage development, allocation strategies' effect, and industrial land policies' adjustment, China

Zhang

Han

et al. 2022

Growth and Change

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Local governments are faced with ‘financial’ and ‘political’ double‐pressure to attract business investment with the low‐price industrial land in China. This study tests the effect of industrial land allocation strategy on local tax and employment using the Driscoll‐Kraay (D‐K) standard error fixed‐effect model in different stages. The empirical results indicate that the taxation and employment‐pulling effects are still effective in the full‐sample model. However, in the stage of rapid economic development (2007–2012), the interaction term coefficient between industrial land scale and price is –0.026 and is significant at 5% level. This result suggests that the low‐price and large‐scale industrial land allocation strategies of local governments have a significant impact on the tax. For every 1% decrease in industrial land price, the regional employment growth is 0.071%. In the structure transformation stage (2013–2019), the industrial land scale can influence increasing local taxation. The effectiveness of local government industrial land allocation strategy on regional employment is weakened.

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