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Published online 8 Feb 2016
Jointly Owned Forests and Forest Land Consolidation – Increasing the Stand Size in Fragmented Areas
Private ownership has traditionally been considered superior to joint ownership. The creation of new jointly owned forests is, nevertheless, regarded as an integral part of Finnish forest land consolidation projects. The aim of these projects is to solve the challenge of increasingly small forest properties, which lead to higher harvest and maintenance costs, and lower incentives to manage the forests. In this article, a case study was carried out on the size of forest stands (compartments) before and a decade after the Pahkakoski land consolidation project. The stand sizes before and after land consolidation are compared both for areas that only underwent land consolidation and for areas that were merged into a jointly owned forest. The results indicate that land consolidation increases the stand sizes, especially for younger stands. For jointly owned forests, this increase is larger: in terms of forest land, the average stand size increased with between 1 and 1.8 hectares depending on the development class of the forest stand. While the results demonstrate that land consolidation on its own can increase the stand size, leading to lower management costs, jointly owned forests increase this effect considerably. As such, the creation of jointly owned forests presents clear benefits compared with pure land consolidation through economies of scale.
Keywords: Land fragmentation, rural development, land tenure, forestry, private property, common property
Lessor’s Status in Land Consolidation in Finland
Kimmo Sulonen and Seija Kotilainen
Keywords: Lessor, landowner, leaseholder, land consolidation, survey study
Land Consolidation and the Value of Rural Cultural Landscape
Saija Ettanen and Arvo Vitikainen
The formation of rural cultural landscape can be studied as an entity comprising the visible elements, the background processes which have formed and are forming these visible elements, and the values that are given to the landscape. The value of rural cultural landscape can be based, for example, on well-kept cultivated landscape, buildings, and diverse culturally affected nature. Changes in real estate and property structure have had a major influence on rural cultural landscape. Earlier forms of land use are layered in the current landscape affecting the values of the landscape at the same time. The consideration of landscape change is a pressing issue as the current scattered property structure is being enhanced by implementing land consolidations. In order to preserve the values of cultural landscape, the process of land consolidation should include a separate landscape analysis.
Keywords: Cultural landscape, land consolidation, land division, landscape analysis, value of cultural landscape
Does Independent Appraisal Provide Added Value?
It has been suggested that one of the reasons for the persistence of the NAV discount phenomenon is that investors simply do not trust the disclosed property values of listed real estate companies. The purpose of the study is to find out whether investors trust reported fair values of investment properties more when the valuations have been provided by third party appraisers and not by the management of the company. A sample of 97 European publicly listed real estate companies is used to conduct the empirical study. The study is based on a regression model which analyses the relationships between the disclosed amount of investment properties and the market value of equity. Data on the amount of investment properties held by the sample companies is collected from annual reports for fiscal year 2012. The study utilizes disclosures mandated by International Financial Reporting Standard IAS 40 which requires companies to disclose the methodology used to value investment properties. Additional data needed for the regression model is collected from the Thomson Datastream and Thomson Worldscope databases. Results of the empirical study support the research hypothesis, i.e. that investment properties that are valued by third party appraisers are perceived by financial markets as more value relevant than properties which have been valued internally by the company
Keywords: Investment property, property appraisal, fair value, IAS 40, REIT, real estate investment trust, NAV discount, net asset value discount, external appraisal, value relevance