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Familiarity and the Determination of Yields for Regional Office Property Investments in the UK

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  • John Henneberry
  • Fotis Mouzakis

Abstract

Henneberry J. and Mouzakis F. Familiarity and the determination of yields for regional office property investments in the UK, Regional Studies . This paper examines how effectively investment yields incorporate spatial variations in risks and returns into property prices. It is hypothesized that the pricing of property investments in non-core UK regions is affected by a pure familiarity heuristic adopted by investors based in London. Consequently, the determination of office yields is based not on the intrinsic investment characteristics of regional markets, but on a core market benchmark combined with a regional premium. This results in very long-term mispricing patterns with implications not just for the office property investment market, but also for the regions, especially those outside the core.

Suggested Citation

  • John Henneberry & Fotis Mouzakis, 2014. "Familiarity and the Determination of Yields for Regional Office Property Investments in the UK," Regional Studies, Taylor & Francis Journals, vol. 48(3), pages 530-546, March.
    • Handle: RePEc:taf:regstd:v:48:y:2014:i:3:p:530-546
    DOI: 10.1080/00343404.2013.765556
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    References listed on IDEAS

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    1. Clark, Gordon, 2000. "Pension Fund Capitalism," OUP Catalogue, Oxford University Press, number 9780199240487.
    2. Neil Crosby & Patrick McAllister, 2004. "Liquidity In Commercial Property Markets: Deconstructing The Transaction Process," Real Estate & Planning Working Papers rep-wp2004-07, Henley Business School, University of Reading.
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    Cited by:

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