International Financial Centres, Office Market Rents and Volatility

Colin Lizieri

Real Estate & Planning Working Papers from Henley Business School, University of Reading

Abstract: Despite continuing developments in information technology and the growing economic significance of the emerging Eastern European, South American and Asian economies, international financial activity remains strongly concentrated in a relatively small number of international financial centres. That concentration of financial activity requires a critical mass of office occupation and creates demand for high specification, high cost space. The demand for that space is increasingly linked to the fortunes of global capital markets. That linkage has been emphasised by developments in real estate markets, notably the development of global real estate investment, innovation in property investment vehicles and the growth of debt securitisation. The resultant interlinking of occupier, asset, debt and development markets within and across global financial centres is a source of potential volatility and risk. The paper sets out a broad conceptual model of the linkages and their implications for systemic market risk and presents preliminary empirical results that provide support for the model proposed.

Keywords: international financial centres; office markets; systemic risk; ownership (search for similar items in EconPapers)
JEL-codes: F36 G01 O18 R33 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2008
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http://www.henley.reading.ac.uk/rep/fulltxt/0308.pdf (application/pdf)

Related works:
Working Paper: INTERNATIONAL FINANCIAL CENTRES, OFFICE MARKET RENTS AND VOLATILITY (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:rdg:repxwp:rep-wp2008-03

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