Page 449 - Invited Paper Session (IPS) - Volume 1

IPS176 Thomas A. K.
broadest sense (Eurostat, 2017). On the other hand, for classification, it can
further make a difference whether dwellings rented out to tenants are owned
by enterprises or private households. In the residential-commercial
delineation proposed by the European Systemic Risk Board (ESRB, 2016), the
latter, labelled buy-to-let property, is considered residential property
because, from a macroprudential point of view, it resembles more owner-
occupied housing than other commercial property in terms of credit risks. In
Fig. 1, the residential-commercial splits underlying several definitions in use
are displayed.
Fig. 1 Residential-commercial split according to several definitions in use
definition houses and apartments multi-family office retail
dwellings
owned by owned by private owned owned by
enterprises households by enter-
private prises
rented owner-
out occupied house-
holds

Credit Requirements residential commercial
Regulation (CRR)
ESRB
recommendation commercial residential commercial
on closing real estate
data gaps
Broadest definition of
commercial real estate commercial commercial
in Eurostat (2017) residential

This illustration does not cover the complete stock of real estate properties. For instance, social
housing as well as industrial and logistics properties are excluded. The illustration also abstracts
from buildings under construction.
While the CRR definition of commercial real estate enables to base CPPI
weights on both stock and take-up of space, it is impossible to implement a
transaction weighting for the ESRB delineation and the broadest-level
concept without making arbitrary choices regarding the assignment of
transactions from enterprises to private households and vice versa. In
addition, transactions in commercial real estate markets are only incompletely
available. By contrast, the real estate stock in Germany is – at least to the
extent needed for the CPPI compilation intended here – recorded to a
sufficient degree. In particular, the dwellings stock was completely registered
by a census in 2011, making it possible to identify and extract rental housing.
Data on office floor space in towns and cities is provided by bulwiengesa and,
for retail space, there is official information on county level which can be used
to perform estimates for towns and cities.

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