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European Real Estate Society
20th Annual Conference
Vienna, Austria. 3-6 July 2013
Within the framework of the project:
The concept of the Latvian
industrial property market
development model in a context of
the strategic planning
Tatjana Staub, PhD candidate, Mg.oec.,
Ineta Geipele, Prof. Dr.oec.
Institute of Civil Construction and Real Estate Economics,
FEEM, RTU, Latvia
RESEARCH SUBJECT AND OBJECT
Subject of the research :
modelling of the A class industrial property
market development in a long-term perspective.
Object of the research:
the industrial property market.
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Territory’s cooperation and impact
radiuses of Latvia
R2
(LV)
RUSSIA
R1
(LV)
First radius (R1 (LV)) indicated for Latvia includes the border states:
Lithuania, Estonia, Russia and Belarus.
The second radius (R2 (LV)) accumulates the investments assets from the
closest countries of the Baltic Sea region: Finland, Sweden, and Norway
and next to the neighboring overland partners Ukraine and Poland.
Tasks and Purpose
THESIS STATEMENT:
 in a process of spatial economic allocation
in compliance with considerations of the
climate change, a permanent development
of the entrepreneurial activities of commercial
real estate market in the Baltic Sea Region
is facilitated thus preventing the short-term
current imbalance in the local commercial
real estate market.
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PRACTICAL IMPORTANCE
 the identified issues, assessment of the
developed models’ creation and provided
scientific solutions to determine the content of
spatial economics in the context of development
of the Baltic Sea Region, enhance the relevance
of the concept of the use of spatial economic
allocation in the Latvian commercial real estate
market development.
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SCIENTIFIC NOVELTIES,
FORMAL SCIENTIFIC IMPLICATION
AND MAIN CONCLUSIONS
THE LAYER MODEL OF THE ALLOCATION OF SPATIAL
ECONOMIC OBJECTS IN A SYSTEM OF THE ENTREPRENEURIAL
ACTIVITIES
Global economy   Climate change
Globalization of manufacturing of goods and services
Financial globalization
MNE

State
Local economy,
National economy
Technologies
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SCIENTIFIC NOVELTIES
THE ALGORITHM MODEL OF THE FORECASTING A
SUPPLY OF THE SPATIAL ECONOMIC OBJECTS
Indications
A.Modeling
of the climate change
projections
Step 1
Step 2
Step 3
B.Making a forecast on
the high-class (modern)
industrial property stock
and manufacturing capacity
Step 4
Conclusions
The climate change research
data
(comparison of the historical
data and long-term forecasts)
Discuss
ion:
Factors
impact
Determination
of the focus countries
Statistical data
allowance for the stock
of the focus countries’
modern industrial real
estate property
Manufacturing
(and agriculture if compare
the land-use)
development dynamics
assessment for the
selected countries
Manufacturing capacity
measured for the focus
countries in euro per
modern industrial real
estate property’s square
meter
The assessment of the average
annual growth rate of
manufacturing
(and agriculture if compare the landuse) for the selected countries
Generation
Generation
of three
of three
scenarios
scenarioson
onthe
theforecast
forecast
ofofthe
thelocal
localmarket
marketstock
stock
potential
potential
of the
of target
the target
countries countries
Generation
Generation
of of
three
three
scenarios
scenarios
onon
gross value
grossadded
value on
added on
manufacturing
manufacturing
(and
(and
agriculture
agriculture
if if
compare
comparethe
theland-use)
land-use)for
forthe
thetarget
target
countries
countries
Conclusions
Conclusions
on on
thethe
sustainable
sustainable
development
development
of theofmodern
the modern
industrial
industrialreal
realestate
estateproperty’s
property’s for
for
the the
target
target
countries
countries
(complying
(complying
existing
existing
demand,
demand,
and possibly
and possibly
insufficient
insufficient
use of
use
theofterritory’s
the territory’s
potential
potentialand
and
imbalance
imbalance
of of
thethe
local
local
market)
market)
SCIENTIFIC NOVELTIES
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ALGORITHM MODEL OF THE FORECASTING A SUPPLY OF THE
SPATIAL ECONOMIC OBJECTS:
practical solutions (I)
Riga’s forecasted versus
comparative climate intervals, °C
Country selection/ season,
rate
summer
winter
Latvia (Riga), in 2035
-1
-2.1
-0.3
6.5
Czech Republic (Prague)
-0.2
0.5
Estonia (Tallinn)
-1.6
-2.4
Lithuania (Vilnius)
-0.6
-2.7
0.3
0.6
Sweden (Stockholm)
-0.5
-0.5
United Kingdom (London)
-0.5
6.5
Belgium (Brussels)
1.
Poland (Warsaw)
2.
increase of a number of dryness
periods in summer;
high temperatures in winter;
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SCIENTIFIC NOVELTIES
ALGORITHM MODEL OF THE FORECASTING A SUPPLY OF THE
SPATIAL ECONOMIC OBJECTS: practical solutions (II)
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SCIENTIFIC NOVELTIES
ALGORITHM MODEL OF THE FORECASTING A SUPPLY OF THE
SPATIAL ECONOMIC OBJECTS: practical solutions (III)
1
2
3
Agriculture gross value added
0.43
0.78
0.60
Manufacturing gross value added
1.3
0.86
1.09
Manufacturing Gross value added percent from
GDP in 2020
0.73
0.70
0.71
Productivity per 1 inhabitant
1.64
1.07
1.36
High class industrial property stock
0.53
2.91
1.72
Ratio/ Country’s Scenario
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SCIENTIFIC NOVELTIES
THE REGIONAL SPECIALIZATION RATE OF THE MAIN
ENTREPRENEURIAL ACTIVITIES IN LATVIA AND BALTICS (I)
 Gini coefficient for regional specialization

 2
s
Gini j  
_
2
n R
j

 n
_


  i Ri  R j 

  i 1

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SCIENTIFIC NOVELTIES
THE REGIONAL SPECIALIZATION RATE OF THE MAIN
ENTREPRENEURIAL ACTIVITIES IN LATVIA AND BALTICS (II)
1.15
0.38
0.66
0.04
0.51
0.13
Specialization in
manufacturing and agriculture
Overall specialization,
A-N coding in NACE rev.2
According to NACE rev.2 structure coding:
Separate: manufacturing (C), agriculture of crop and animal production, hunting and related service activities (A01)
General: agriculture (A), industries (B - E codes), construction (F), trade and accommodation (G, I codes), services and transport (H, J-N codes)
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SCIENTIFIC NOVELTIES
Levels of planning
INTERACTIVE INTEGRATED PLANNING MODEL
MACRO LEVEL
MESO LEVEL
Regional
Economic
Planning
Strategic
Development/
City Plan
Construction
and Real estate MARKET
MICRO LEVEL
Commercial,
Strategic and Public use OBJECTS
Industrial
Offices Residential Retail
and warehouse
Hotel
Public InfrastructureStrategic
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SCIENTIFIC NOVELTIES
MAIN CONCLUSIONS and PROPOSALS (I)
1. Very serious attention is paid to the climate change processes in the world.
Climate change may be the result of natural processes as well as human
activity. Changes in climatic conditions may change the country's economic
development priorities. Objects of industrial significance are among theose
commercial real estate market facilities, the operation of which even a short
period of time can affect changes in the composition of the air, water and
land.
2. The concept of the manufacturing development and the industrial property
forecasts considering the Latvian economy potential for the development
in a context of climate change. The industrial property market capacity
might consider the existing schemes of the industrial development and the
balanced land-use that would require the polycentric business activities.
3. Making calculations in comparable prices, According to the Czech scenario
considered as impetuous development the current manufacturing capacities
correspond to 53% of the current Latvian stock of the industrial real
estate market properties demanded in Europe.
4. The Article states the problem of loosing the regional specialization
might be analyzed through all the economy levels, considering
controlled and targeted development without explosive growth and falls.
Also a weakness of the local companies that is a lack of the strategic
planning. In term of the taken the climate change topic it might be
reconsidered to a continuous careful analysis from the foreign enterprises
experience.
MAIN CONCLUSIONS and PROPOSALS (II)
5.
The authors propose the academicians and professionals to use the following
developed novelties to supplement the theoretical basis in the field of spatial
economics.
6.
Placement and location of the commercial real estate objects of the industrial purpose
is closely related to the national priorities and economic development, therefore,
according to the developed the algorithm model of the forecasting a supply of the
spatial economic objects created according to the potential climate change and
economic development, the author provides the recommendations to the Ministry of
Economics and the Ministry of Environmental Protection and Regional Development
to use the climate change instrument to make the forecasting for the
economics and regional development.
7.
The authors recommend using that time and holding back the supplementation of
legislation focus efforts on matter of supporting the entrepreneurial activities in
the middle term by tax policy, creation of the transport and utilities
infrastructure. Educating the society, efficient resource relocation and use of
the monetary sources might enhance the activity of the business activities in
the territory of Latvia.
8.
In addition, the authors would argue that educating the local inhabitants in a field of
specialization, developing transport infrastructure, careful analysis on potential
demand from the neighbouring countries, including dynamics in outward and inward
FDI flows might be the driving forces in attracting foreign capital and stimulation of the
increase of the industrial specialization in Latvia
Ich danke Ihnen!
Thank you! Questions?
Tatjana Staub, Mg.oec.
e-mail: [email protected],
GSM: +371 2 6510750
This work has been supported by the European Social Fund within the project «Support for the
implementation of doctoral studies at Riga Technical University».
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