Week 3 - Market areas ch4 Flashcards
what is plot ratio
> floor area ratio
PR is defined as the gross floor area of all buildings on a site divided by the area of the site, but excluding the area of stairs, loading bays, access ways or car parking areas, or any area occupied by the machinery required for air conditioning, heating, power supply or lifts. (Melbourne Planning Scheme Ordinance)
Grandfathering: Buildings built before the introduction of zoning regulation (height and/or plot ratio) can maintain overbuilt space
types of ownership
Ownership in severalty Joint Tenancy Tenancy by the Entirety TIC (Tenancy in Common) Partnership REIT
characteristics of efficient markets
large number of buyers and sellers
homogenous products
buyers and sellers act with knowledge and information
supply and demand never far out of balance (equilibrium)
market mechanism
what are the 4 property cycles
expansion = sustained growth in demand, increasing construction
Decline = positive but falling demand and increasing vacancy
Recession = Falling demand, decreasing vacancy
Recovery = Increasing demand, decreasing vacancy
define submarket
division of total market that reflects preferences of particular buyer or seller
define market segmentation
process by which submarkets within larger markets are identified and analysed
Define disaggregation
Grouping properties together based on similar attributes
market delineation process
identify property type identify property features (including occupancy and customer base) market area available substitute properties complimentary properties
define market area
geographic delineation of the market for a specific category of real estate - the area in which alternative, similar properties effectively compete with the subject property
Can encompass one or more sub-markets
Market for a specific category of RE
Area where alternative, similar properties compete
define neighbourhood
a group of complementary land users: grouping buildings businesses or enterprises
The immediate environment / vicinity / surroundings
define suburb / district
type of market area defined by homogenous land use e.g. apartments, houses, commercial, industrial
market areas 4 stages
growth - gains public favour + acceptance
stability - market experiences equilibrium without marked gains or losses
Decline - stage of diminishing demand in a market area’s life cycle
Revitalisation - epitomised by renewal, redevelopment, modernisation and increasing demand
explain gentrification
Gentrificationis a process of renovation and revival of deteriorated urban neighbourhoods by means of influx of more affluent residents, which results in increased property values and the displacing of lower-income families and small businesses.
Residents who lived in the gentrified area are likely to be displaced by the influx of more affluent residents
main types of sub markets
Residential Commercial Industrial Retail Agricultural
explain single family sub market
Predominance of owner-occupied homes, low density areas
Categories Detached houses Custom-built subdivisions Senior housing Rural housing
Value influences Transportation services Access to workplace, shopping centres Quality of local schools Reputation of area Supply of vacant land likely to be developed
explain multi family residential sub markets (apartments)
Predominance of rented occupancy
Higher density than single-family residential sub-markets
Categories
Multistorey/high-rise buildings
Townhouses
Condominiums
Proximity to employment
Proximity to open spaces, parks, lakes, or other natural features
Parking for tenants and guests (outdoor vs. indoor and snow…)
Vacancy rates
explain office sub markets + ratings
Buildings used as office premises
Leased or owner-occupied
Sale & Leaseback (not limited to office)
Categories – Premium, A, B, C or D Grade
Criteria used:
Size, design, configuration, environmental performance, location, communications, security, lifts, air-conditioning, mechanical, and other services and amenities.
explain premium grade offices
Excellent location and accessibility, high-quality building and management, over 20,000 m2
explain A grade offices
Good location and accessibility, high-quality building and management, over 10,000 m2
explain B grade offices
Good location and access, structure showing minimal obsolescence, minimum size 5,000m2
high-quality buildings that don’t have certain amenities or lack the “wow” factor
explain C grade offices
reasonable standard of finish & maintenance, but may have some functional obsolescence or be in less-desirable locations
Explain D grade offices
lower or poor quality finish, lack basic functionality, or are in very undesirable locations
value influences of office sub market
Location - time and distance from potential labour force e.g. access, highway
Physical characteristics
Environmental sustainability
Direction of observable growth in the submarket
Availability of land for expansion
pedestrian and vehicle traffic flow
define retail sub markets and there categories
Concentration of retail locations often along major street
Categories: Shopping centres Department stores Regional shopping centres Major regional shopping centres
Explain shopping centre sub market
Typical size
Usually < 10,000m2
Typical catchment area
Immediate neighbourhood
Radius of 2 KM
Typical tenants
1-2 small supermarkets along with food and non-food specialty shops and services
explain department store submarket
Typical size
Approx. 20,000 m2
Typical catchment area
Radius of 2 to 4 KM
Typical tenants
A supermarket, and specialty shops; may also offer professional, financial services and recreational facilities
explain regional shopping centre submarket
Typical size
30,000 to 50,000 m2
Typical catchment area
May include several neighbourhood centres
Radius of 5 KM
Typical tenants
Full department stores plus banks, service establishments, recreational facilities, general merchandise
explain major regional shopping centre submarket
Typical size
50,000 to 85,000 m2
Typical catchment area
Includes multiple neighbourhood centres
Radius of 10 KM
Typical tenants
Multiple full scale department stores supported by a wide range of other retail facilities
Value influences of retail submarkets
Value influences
Purchasing power of people likely to patronise
Location, time-distance from customers
Accessibility
Physical characteristics of property
Availability of customer parking and future expansion space
define industrial sub markets + explain
Defining characteristic – Cluster of industrial concerns,
e.g. a manufacturer and its suppliers
Industrial properties include
Manufacturing spaces
Warehouses and distribution
Transport and distribution facilities
Availability of labour
Availability of raw materials
Effect of environmental controls
define + explain agricultural submarkets
Underdeveloped land used for production of foodstuffs, timber, oil and other agricultural products
Categories Dairies Grain farms Timber logging Land used for oil/mineral extraction
Value influences
Climate Topography Soil types Transportation Availability of labour Land size
