Cap Rate as the Interpretative Variable of the Urban Real Estate Capital Asset: A Comparison of Different Sub‐Market Definitions in Palermo, Italy

Grazia Napoli, Alberto Valenti, Maria Rosa Trovato, Salvatore Giuffrida

Risultato della ricerca: Articlepeer review

26 Citazioni (Scopus)

Abstract

Real estate capital is in constant competition with other capital assets due to its differentand complementary economic functions such as direct use, productive investment, and speculativeinvestment. These features and the resulting opportunities cannot be easily deduced from directobservation of the real estate markets, so some further insights need to be carried out in order tohighlight the relationship between prices, rents and performances. This study aims at providing amultifaceted perspective of a specific urban real estate market to overcome the difficulties arisingfrom opacities and informative asymmetries that hinder the decision of investors, by facilitating thecomparison of different options such as capital value, income and performance. Within the massappraisal approach, the study proposes a methodology for the analysis of the cap rate, intended asthe expression of profitability and liquidity of the urban real estate capital asset. The methodologyis based on a detailed survey of a sample of the housing market data, collected within a structureddatabase, supported by statistical and territorial analyses of the sample, in order to display the rangeof cap rates featuring each sub‐market, and the related distributions. The methodology is appliedto a case study of nearly 1000 properties distributed in a vast urban area of the municipality ofPalermo, Italy. The consistency of the relationships between the three variables has been tested withreference to two hypotheses about the sub‐market definition, which has been carried out by clusterand by neighbourhood.
Lingua originaleEnglish
pagine (da-a)1-25
Numero di pagine25
RivistaBuildings
Volume7(3)
Stato di pubblicazionePublished - 2017

All Science Journal Classification (ASJC) codes

  • Architecture
  • Civil and Structural Engineering
  • Building and Construction

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