Alain Coën , Raphaël Languillon, Arnaud Simon, Saadallah Zaiter (p)

Arnaud Simon

The aim of this paper is to investigate if financialization and metropolization are two converging dynamics. We aim to verify if the most financialized European public property companies are also the main actors in the metropolization process through their portfolio arbitrages of their building stocks. In 2002, the properties held by our sample companies represented a total surface area of around 60 million square meters. The total surface area increased to 70 million square meters in 2016. We find that, between 2002 and 2016, the financialized European public property companies (F-companies) and the non-financialized European public property companies (NF-companies) exhibit a tendency to disinvest the non-urban spaces, to reinvest in the Hinterlands for the NF-companies, to reinvest in the Core for the F-companies, at least in relative terms. We also find that, in relative terms, the F-companies reallocated their portfolio toward the Large metropoles, in particular in Germany, France and Switzerland while the non-financialized companies shifted their portfolio toward the others segments (exclusively toward the Metropoles segment for Sweden). Belgium is exception, with a reversed evolution. In order to analyze the differences in the behavior of F-companies and NF-companies, we introduce a new score transparency index. Our results suggest that F-companies are more transparent than NF-companies. They are larger in size, less dominated by insiders, are followed by more analysts and they have greater institutional ownership. The results of a logistic regression also show that F-companies have higher liquidity than NF-companies.

Jean-Baptiste Coulomb (p)

Arnaud Simon

Geography of the wealth, time preference and commercialization of the Viager product

Jean-Baptiste COULOMB*
*PSL Research University, Paris Dauphine University, DRM Finance
Keywords: Viager, Housing stock, Lifetime annuity, Ageing

Abstract

A Viager real estate transaction, which can also be called a « lifetime annuity real estate » transaction, consists in selling a property in return for a down payment and a lifetime annuity that the buyer has to pay until the seller dies. This paper presents a quantitative analysis of the geography of the wealth, of the time preference and the commercialization of the viager product. The analysis is based on 2 678 transactions from 2010 to 2018. It explores in particular the preference between a lifetime annuity and a down payment.

In our paper, we analyze French data by departments. Firstly, the potential viager wealth, estimated at 1 059 billion euros in France, appears less concentrated across the departments compared to the total residential real estate wealth. This potential can vary between 8,6% and 33,5% of the total. The lower cases correspond to very urban and metropolitan departments. The higher cases correspond to a mix between departments confronted to a desertification process and littoral departments very attractive for retired people.

Secondly, the analysis of the time preference (down-payment versus annuities) indicates that the distance between buyers and sellers is not significant despite the existence of a local bias (buyers and sellers often live in the same municipality). Results also show that when sellers are older or when the ownership rate is higher in the municipality, annuity is preferred to down-payment. On the contrary, richer sellers prefer down payment.

Thirdly, the study of the time-on-market shows that the higher the time of commercialization, the lower the final economic value is for the seller. The joint life expectancy also has an impact on the commercialization process: younger sellers have a lower economic value as their right of use and habitation are higher.

Paul Andriot (p)

Arnaud Simon

The objective of this article is to analyze the spatial structure of the perceived quality for the Parisian office buildings stock. Using a detailed grid that describes a building, a panel of market participants was questioned in order to reveal their quality judgments on each elements of the grid. On that basis, we elaborated a global quality score that can be applied to real buildings. This score can be split between a location quality sub-score and a building sub-score.
In the literature, the notion of Central Business District (CBD) points out a central place in the city, where the prices are maximal. In this article, we want to question the notion of centrality under the prism of the perceived quality, for the Parisian office buildings stock. We consider two urban morphology paradigms: the monocentric and the polycentric hypotheses. The first one assumes that it exists a central place around which the city develops. The second one considers several centers of attractiveness within a city. The questions we address are the following. Is the global perceived quality score monocentric or polycentric? In the first case, can we consider the CBD as the place of the maximal quality? Regarding the components of the global score, we expect a monocentric spatial structure for the location quality sub-score. As for the building quality sub-score, the maximal quality might be reached for the first ring of the Parisian metropolis, in relation with the ‘Grand Paris’ urban project.
In a first step we will describe our theoretical and methodological background for measuring the quality of buildings, then we will describe our sample of datas and finally we will ask the centrality of Paris CBD.

Raphael Languillon (p), Yasmine Essafi

Arnaud Simon

Assuming a life cycle economy perspective and using the link between demography and house prices, this article proposes a methodology to analyze the spatial reshaping of housing wealth caused by the elder-boom. The modification in housing wealth circulation across generations is also a spatial modification that carries consequences for local territories. While the losses are amplified for some departments, others benefit from this reorganization. Metropolization is insurance against important wealth losses, whereas for the nonmetropolitan departments, a combination of second-order factors is required to avoid housing wealth decline. Our results suggest that these evolutions are mainly structural and that the cyclical variables are of secondary importance. Compensation, by positive cyclical trend, for structural decline is not a circumstance that currently obtains in French case. Gentrification also appears to be strongly related to this change, in which various macrostructural inequalities are reinforced. As for the unemployment rate, this indicator poorly reflects the shift and can be misleading.