Suchergebnisse

PurposeRetail properties are a perfect example of a property class where revenues determine the rent for the property owners. Estimating the value of new retail developments is challenging, as the initial revenues can have a significant variance from the long-term revenue levels. Owners and tenants try to manage this problem by introducing different kind of options, such as overage rent and extension rights, to the lease contracts. The purpose of this paper is to value these options through time for different types of retailers, using real-life data with a method that can be easily applied in practice.Design/methodology/approachThis paper builds upon the existing papers on real option studies but has a strong practical focus, which has been identified as a challenge in the field. The paper presents simple mathematical equations for valuing overage rent and extension options. The equations capture the value related to uncertainty (volatility) that is missed by standard valuation practices.FindingsThe results indicate that overage and extension options can represent a significant proportion of retail lease contract's value and their value is heavily time-dependent. The option values differ greatly between tenants, as the volatilities can have a large spread across tenants. The paper suggests that the applicability of option pricing theory and calculus should not be considered as an insurmountable barrier any more, rather a greater challenge for the practical adaptability of the method can be the availability of real-life data that is a common problem in real option analysis.Practical implicationsThe value of extension and overage options varies greatly between tenants. In general, the property owner can try balance the positive effects from the overage rents to the negative effects of tenant extensions. However, this study tries to highlight that, as usual, using the "law of averages" can result into poor valuation in this context as well. Even the data used in this study provide valuable findings for the property owner as an analytical deduction can be made that certain types of tenants have higher volatilities and this should be acknowledged when valuing options within lease contracts.Originality/valuePrevious literature in this topic often takes the input data for the option valuation as granted rather than trying to identify the real-life data available for the calculation. This is a common problem in real options valuation and it seems to be one of the reasons why option valuation has not been used widely in practice. This study has used real-life data to assess the problem and more importantly assessed the data across different types of tenants. The volatility spread between different types of tenants has not been discussed previously, even though it has a significant importance when using option pricing in practice.

European Union climate goals aim to increase waste incineration instead of landfills. Incineration of waste increases the mismatch between heat production and consumption since waste is generated constantly but energy demand varies significantly between seasons. Seasonal energy storage is suggested to alleviate this mismatch. However, traditional seasonal storage options have not been cost-effective investments for energy companies. This paper explores the feasibility of a large cavern thermal energy storage in a large district heating system with waste incineration. First, 62 one-year optimisations for seasonal storage with varying size and power were conducted to determine the economic performance of the system. Second, the annual system emissions were estimated. The results show that even small capacity seasonal storage reduces system emissions significantly. Return on investment for the most profitable storage with a capacity of 90 GWh and power of 200 MW range between 3.6% and 9.4%, and the investment varies between EUR 43–112 M depending on costs. Seasonal energy storages are still not as profitable as traditional energy investments. This might change due to growing waste heat recovery and the rising cost of carbon emissions. Further research is needed into new business models for implementing large seasonal storages. ; Peer reviewed

Sustainable development and climate change mitigation have become guiding policy principles in many welfare states. However, the traditional role of a welfare state is to guarantee the economic stability, jobs and welfare for its citizens. Sustainable development leans on the idea that we can have economic, social and environmental sustainability at the same time. This would require decoupling of economic growth from environmental degradation. Decoupling should be studied globally, because within nations, the economy can grow while local environmental impacts decrease, but at the same time, global environmental impacts may increase due to international trade. In this study, we examine the consumption-based carbon and material footprints of a Nordic welfare state, Finland. We focus on the environmental impacts of public spending, which has received little attention previously. In welfare states, the reallocation of public funds to services and individuals are at its core. In the study, we examine how this affects the carbon and material footprints of various income groups and household types. We find that the share of public services and investments is 19% of the carbon footprint and 38% of the material footprint per capita. Building of infrastructure plays a major role in composing the material footprint. We also find that the welfare state has important features that improve the carbon equity between the citizens. To achieve absolute decoupling, required to reduce environmental impacts caused by economic activities, we suggest policies promoting public and private green investments. In addition, increased carbon pricing would enhance green investments and drive environmental innovation. ; We would like to thank the following organizations for making the study possible: Aalto University School of Engineering and the University of Iceland's Faculty of Civil and Environmental Engineering. The views expressed by the authors do not necessarily reflect those of the funders. ; Peer Reviewed

Sustainable development and climate change mitigation have become guiding policy principles in many welfare states. However, the traditional role of a welfare state is to guarantee the economic stability, jobs and welfare for its citizens. Sustainable development leans on the idea that we can have economic, social and environmental sustainability at the same time. This would require decoupling of economic growth from environmental degradation. Decoupling should be studied globally, because within nations, the economy can grow while local environmental impacts decrease, but at the same time, global environmental impacts may increase due to international trade. In this study, we examine the consumption-based carbon and material footprints of a Nordic welfare state, Finland. We focus on the environmental impacts of public spending, which has received little attention previously. In welfare states, the reallocation of public funds to services and individuals are at its core. In the study, we examine how this affects the carbon and material footprints of various income groups and household types. We find that the share of public services and investments is 19% of the carbon footprint and 38% of the material footprint per capita. Building of infrastructure plays a major role in composing the material footprint. We also find that the welfare state has important features that improve the carbon equity between the citizens. To achieve absolute decoupling, required to reduce environmental impacts caused by economic activities, we suggest policies promoting public and private green investments. In addition, increased carbon pricing would enhance green investments and drive environmental innovation. ; Peer reviewed

Environmental assessments have been developed with increasing emphasis since the wide-scale emergence of environmental concerns in the 1970s. However, after decades there is still plenty of room left for development. These assessments are also rapidly becoming more and more crucial as we seem to be reaching the boundaries of the carrying capacity of our planet. Assessments of the emissions from the built environment and especially of the interactions between human communities and emissions are in a very central role in the quest to solve the great problem of sustainable living. Policy- makers and professionals in various fields urgently need reliable data on the current conditions and realistic future projections, as well as robust and scientifically defensible models for decision making. This recognition was the main motivation to call for this Focus Issue, and the published contributions truly highlight the same point. This editorial provides brief summaries and discussions on the 16 articles of the Focus Issue, depicting the several interesting perspectives they offer to advance the state of the art. Now we encourage academics, practitioners, government, industry, individual consumers, and other decision makers to utilize the available findings and develop the domain of environmental assessment of the built environment further. Indeed, we hope that this Focus Issue is merely a kernel of a significantly large future body of literature. ; Peer reviewed

The low-energy and the nearly zero-energy buildings trend is calling for radical new innovations from the construction industry. This study uses path creation theory to examine two innovation concepts for low-energy housing in Northern Europe with contrasting outcomes—with one being an apparent market success and the other a disappointment. The results highlight two issues behind the success, one of a systemic nature and the other concerning innovation management. First, the development of energy efficiency regulations and the dominant technological trajectory regarding low-energy houses are interdependent. However, it seems that while supporting the trajectory of the innovation developed in the first case, regulators created virtually insurmountable cognitive and normative obstacles to finding alternative technological pathways. Second, the significance of proof of concepts for new innovations cannot be underestimated. The importance of a pilot project rests not only on showcasing and testing the technology,but also on its ability to increase political support, investments, and public awareness. The study implies that low-energy construction seems to be the next great challenge, one where genuine co-operation between the industry, public authorities and academia is a prerequisite for success ; Peer reviewed

While buildings are often credited as accounting for some 40% of the global greenhouse gas (GHG) emissions, the construction phase is typically assumed to account for only around one tenth of the overall emissions. However, the relative importance of construction phase emissions is quickly increasing as the energy efficiency of buildings increases. In addition, the significance of construction may actually be much higher when the temporal perspective of the emissions is taken into account. The construction phase carbon spike, i.e. high GHG emissions in a short time associated with the beginning of the building's life cycle, may be high enough to question whether new construction, no matter how energy efficient the buildings are, can contribute to reaching the greenhouse gas mitigation goals of the near future. Furthermore, the construction of energy efficient buildings causes more GHG emissions than the construction of conventional buildings. On the other hand, renovating the current building stock together with making energy efficiency improvements might lead to a smaller construction phase carbon spike and still to the same reduced energy consumption in the use phase as the new energy efficient buildings. The study uses a new residential development project in Northern Europe to assess the overall life cycle GHG emissions of a new residential area and to evaluate the influence of including the temporal allocation of the life cycle GHG emissions in the assessment. In the study, buildings with different energy efficiency levels are compared with a similar hypothetical area of buildings of the average existing building stock, as well as with a renovation of an area with average buildings from the 1960s. The GHG emissions are modeled with a hybrid life cycle assessment. The study suggests that the carbon payback time of constructing new residential areas is several decades long even when using very energy efficient buildings compared to utilizing the current building stock. Thus, while increasing the overall energyefficiency is important in the long term, the construction of new energy efficient buildings cannot be used as a means to achieve the short term and medium term climate change mitigation goals as cities and governments often suggest. Furthermore, given the magnitude of the carbon spike from construction and its implications, the climate change mitigation strategies should set reduction targets for the construction phase emissions alongside the ones for the use phase, which currently receives almost all of the attention from policy-makers. ; Peer reviewed

Human economic activities and following carbon emissions have been recognized to be a real threat to the environment. The current levels of consumption-based carbon footprints in all developed economies grossly exceed the sustainable level. Scientists have concluded that in addition to technological solutions, downscaling of consumption and far-reaching changes in lifestyles will be needed to achieve environmental sustainability. In this study, we provide a tangible real-world example that reveals the scale of the needed change from a perspective of a European welfare state citizen. Universal basic income (UBI) represents an income that is just enough to fulfil basic needs, such as food, shelter, and medication. In our case country, Finland, UBI is in practice at the same level as the income of the lowest income decile. The purpose of this study is to present and analyse the carbon footprints at a consumption level that corresponds to UBI. We compare the carbon footprints at this low-income level to average Finnish carbon footprints and discuss their sustainability in the light of global carbon budgets. We use an input-output approach based on the Finnish ENVIMAT model. The average carbon footprint at the UBI level is 4.8 tCO2-eq and it focuses on necessities. It's significantly lower than the average carbon footprint in Finland, 9.4 tCO2-eq, but still far from the level compatible with the current climate change mitigation targets. The results emphasize how challenging it is to find true low-carbon solutions for living in affluent countries. Lifestyle changes and technological leaps need to be combined and fostered by legislation. ; Peer reviewed

The European Union (EU) is reforming its public services and suggesting Public‐Private Partnerships (PPPs) as a solution for producing high quality and cost effective real estate service delivery. However, the use of PPP approach in real estate industries has been found to have significant constraints related to the end‐users' (general public's) perspective. The purpose of the paper is to show how PPP projects have failed to produce desirable characteristics expressed in purchasing processes and fulfilment of the end‐user expectations. While the customer‐oriented development of public services and the needs of the end‐users were noted to be crucial points in all five major Finnish PPP projects studied, the case studies pointed out a fundamental lack of understanding and maintaining the end‐user perspective through the tendering and evaluation processes. Especially, in the final stage of evaluation, and evaluation criteria used to decision making, the disappearance of the end‐users' perspective was evident. The findings are further used to develop a new suggested Public‐Private‐People Partnership (4P) model. The results can be useful to the public sector's purchasers and to the private sector's providers to understand the limitations of current PPP practices and to further develop their practices towards more customer‐oriented service production. Santrauka Europos Sąjunga (ES) vykdo viešųjų paslaugų reformą ir viešąsias bei privačiąsias partnerystes (VPP) siūlo kaip sprendimą teikti pigias ir kokybiškas nekilnojamojo turto paslaugas. Tačiau pastebėta, kad nekilnojamojo turto sektoriuose VPP požiūris susiduria su reikšmingais suvaržymais, kurie yra susiję su galutinių vartotojų (plačiosios visuomenės) perspektyva. Šiame darbe siekiama pademonstruoti, kaip VPP projektams nepavyko pasiekti pirkimo procesuose numatytų pageidaujamų charakteristikų ir patenkinti galutinio vartotojo lūkesčius. Nors visi penki pagrindiniai Suomijos VPP projektai, kurie yra nagrinėjami darbe, į klientą orientuotą viešųjų paslaugų plėtrą ir galutinių vartotojų poreikius nurodo kaip svarbiausius punktus, atvejo tyrimai parodė, kad gebėjimo suprasti bei išlaikyti galutinio vartotojo perspektyvą iš esmės trūko ir organizuojant konkursus, ir vertinant. Galutinio vartotojo perspektyvos išnykimas ypač akivaizdžiai išreiškia galutinis vertinimo etapas ir vertinimo kriterijai, kuriais grindžiami sprendimai. Išvados pritaikytos plėtojant naują siūlomą viešosios bei privačiosios žmonių partnerystės (VPŽP) modelį. Rezultatai naudos gali duoti viešojo sektoriaus pirkėjams ir privačiojo sektoriaus tiekėjams, siekiant suprasti esamų VPP praktikų ribotumą ir toliau plėtojant savo praktikas, kad teikiamos paslaugos būtų labiau orientuotos į klientą. First published online: 18 Oct 2010