EVALUACIÓN

The research presented in this report has provided:

• a detailed literature review and background to depreciation;

• a national study of rental depreciation for the main sectors for 1984-95; • an examination of data quality issues

• a detailed examination of the late I 980s boom and early 1990s slump;

• evidence to show that town type is more important than age and prime/non-prime in determining depreciation rate;

• an examination of locational quality change; and • age/depreciation profiles for the office sector.

Further analysis into refurbishment is needed, however, to develop the general conclusions of this study:

• in the short-term, and within market state, can depreciation be offset by refurbishment? and, • in the medium to long term is depreciation systematically higher in refurbished or original

properties?

A key problem in such research is that if the focus is on isolating refurbishments within a particular market state, then, even if only two years’ data is used, pre- and post- refurbishment, unless the refurbishment occurs midway through the market state, it may be impossible to calculate relevant rates.

It was also found that ADRs were quite volatile, and in the absence of detailed information on refurbishment duration, it was assumed that the ERV:HP factor in the year of refurbishment was not part of the ‘pre- and post-’ calculations.

Any further research in this field should look at a small number of pre-defined locations, which would mean it would be much easier to control for other factors, and could also shed further light on the whole issue of building quality.

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Appendices Appendix A Statistical Methodology

1.0 Introduction

This section describes the statistical methodology and its rationale in detail. The methodology was tested initially on a small sample of 52 regional offices and then replicated for other property sectors. Section 4.0 therefore describes the methodology used for the pilot sample and Section 5.0, the variations in detail from this for the other sectors analysed.