Real Estate Concepts: A Handbook

Citation

Clive M.J. Warren (2015), "Real Estate Concepts: A Handbook", Property Management, Vol. 33 No. 4, pp. 405-406. https://doi.org/10.1108/PM-05-2015-0021

This text is edited by Professor Ernie Jowsey, Professor of Real Estate at Northumbria University in the UK. He has authored a number of real estate texts, including Real Estate Economics, and is co-author of Modern Economics with Jack Harvey. This book is an edited edition with chapters contributed by staff at Northumbria University. The book is intended as a student text and is somewhat unusual in that it covers a range of professional practice. While titled Real Estate Concepts, the text provides 18 separate chapters that span subject areas including:

• planning;

• building surveying;

• valuation;

• law;

• economics, investment and finance;

• quantity surveying;

• construction and regeneration;

• sustainability; and

• property management.

This wide range of subject areas incorporates many of the built environment disciplines and at least four of the RICS professional practice areas from which the book draws many of its references. It would, therefore, be of use to students studying degree programmes in planning, building surveying, quantity surveying and real estate among others. This very wide scope does draw into question the books ability in just 18 chapters and 520 pages to deal with such a diverse and vast range of material.

Rather than seek to review the entire book, I intend to focus on those areas that would be of particular interest to readers of Property Management. Chapter 12 is “Property asset management” and the contributing authors are Cheryl Williamson, Dom Fearon and Kenneth Kelly, who are lecturers in real estate at Northumbria University. This chapter commences with a broad overview of the role of property management as a value adding function of portfolio management. It then provides a series of sub-sections in which the major lease clauses are analysed; these include the term, rent, repairing clauses, rent reviews and aspects of the UK Landlord and Tenant Act 1954. These lease analysis sections provide a brief précis of the relevant law but, by virtue of the space dedicated to each section, are inevitably very board brush with only limited reference to supporting case law. Each section does, however, point the reader in the direction of further reading resources.

The “Property management” chapter concludes with sections on Health and Safety and Insolvency. These sections focus on the relative legislation in the UK and once again, prove to be quite brief. They give an outline of the UK situation and may provide a basic understanding for those in other regions, but it is difficult to do justice to the entire property management profession in only 22 pages.

Chapter 18 is “Valuation” and authored by Lynn Johnson and Becky Thomson, both of whom are lecturers at Northumbria University and also have professional practice experience with DTZ and Colliers, respectively. This chapter jumps straight into the valuation of income producing property, using term and reversion and hardcore/layer methods. There is also some useful discussion on the use of the all risk yield in these valuation methods. The approach is well structured, but once again lacks much in terms of depth of analysis. Similarly the section on Discounted Cash Flow provides the basic principles behind the methodology but proffers little discussion regarding which method is preferable and why. Unfortunately there is no real justification provided as to the discount rate used in the example valuations. The chapter concludes with brief sections outlining the depreciated replacement cost valuation method and the valuation of leasehold interests. Limited by space, all sections are necessarily brief. At the end of each section, however, references are given to further readings. Disappointingly some of these further references are somewhat vague; for example in the “Property management” chapter, after the sections on rent or the Landlord and Tenant Act, readers are pointed to www.rics.org and www.isurv.com but are given no further guidance. The reader is left to search through the entire of these web sites to find the relevant material, rather than being directed to specific, useful content.

The intention of this book is sound in that it endeavours to provide a comprehensive discussion of all concepts that affect the built environment and may thus be encountered by a student commencing their study. The difficulty, in my view, is that the very wide scope covering all aspects of the built environment professions has resulted in a text providing only a very brief overview of the professional area. Certainly in terms of the chapters relating to property management and valuation, the content is somewhat limited and would not be sufficient for students to gain a detailed knowledge of the area of practice. That said the wide range of subjects covered might well be of use to someone considering a career in the built environment but undecided about which area of professional practice to pursue.