PRACTICE PAPERS

Estimated realisation price (ERP) by neural networks: forecasting commercial property values
Owen Connellan and Howard James
1. Introduction The progress of applying statistical and neural network methods to residential valuation by the use of comparables has been reported in the academic press for the last five years by Do and Grudnitski (1992), Donnelly (1990), Evans, et al. (1992) and Tay and Ho (1991). The results have shown a cautious success, but there are clearly many aspects of methodology still to be explored and improvements can still be made. For example, it is known that location is a major factor in the value of a property, whilst other influencing factors are the size and quality of the dwelling. All these attributes are considerably interrelated, which presents the analyst with some critical problems of methodology. Nevertheless, the field has been sufficiently well explored as to raise hopes that a combination of statistical and neural network methods may give rise to useful procedures for decision support for the residential valuer: for example see James (1994). The methods of valuation used so far depend on the principle that the price of a property depends on its attributes, such as age, size, quality, condition and location. Various methods are used to determine the extent to which the individual attributes contribute to price, such weights being determined by means of analysis of known prices for similar properties that have been sold within a time period during which the prices have not moved to such an extent as to invalidate the comparison; or some index correction can be made to take account of market movements. We call this kind of analysis cross-sectional. The work described in this paper concerns the estimation of value in the future, and thus the behaviour of value over time is the main objective of the study. Thus by analysing the past behaviour of values, we study the extent to which these values can be extrapolated into the future to obtain a predicted future price. In

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Received November 1996 Revised September 1997

The authors wish to thank Dr Angus McIntosh and his colleagues at Richard Ellis, International Property Consultants, for their kind help and assistance with data, without which this work would not have been possible. We also thank our colleagues at the Centre for the Built Environment at Glamorgan University and the Department of Land and Construction Management at the University of Portsmouth for their support and encouragement.

Journal of Property Valuation & Investment, Vol. 16 No. 1, 1998, pp. 71-86. MCB University Press, 0960-2712

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effect the work is a time series study, and we call this longitudinal analysis, to distinguish the method from the cross-sectional analysis of previous work. However, we are not suggesting that longitudinal methods are a substitute for cross-sectional; they have their special uses and may indeed be used in combination. The field of commercial property appraisal presents more challenges to the analyst. The valuation of both commercial and residential property can require the use of the direct comparison method; the existence of available data relating to residential properties has resulted in the widely reported applications of cross-sectional methods of analysis allied to property attributes. However, commercial investment properties are not heterogeneous products and there is a relative scarcity of data which effectively link values with adequate property attributes. Furthermore, commercial investment property valuations are governed by lease structures and consequently, the methodology inherently depends on future cash flows which have to be discounted at appropriate rates of return over changing periods of time. These complications inhibit crosssectional analysis by neural networks. A much more rewarding opportunity for neural networks requires an increased emphasis on longitudinal (timedependent) data analysis. Thus in this work, our aim was to attempt to show how time series methods can be applied effectively to the problem of analysing commercial property values and to prognosticate future valuation trends in a useful and applicable manner. 2. The rationale for longitudinal as against cross-sectional analysis The achievement of valuation by comparables requires the existence and availability of a sufficiency of transactions within a specified market sector at around the same time, which is a problem in itself. Assuming it were possible, however, to muster sufficient numbers of transactions of suitable commercial investment properties to attempt a cross-sectional comparison by neural network analysis, it would then be necessary to match property attributes to leasing attributes and furthermore to unravel these attributes against the complexities of capitalising anticipated cash flows at appropriate deferment rates. Even if these hurdles could be surmounted, the end product would amount to a valuation estimation process, at todays date, using mathematical methods to weight property and leasing attributes coupled with variable capitalisation factors. However, such procedures would not necessarily give a key to forecasting future trends, whereas the preferred longitudinal analysis that is adopted in this work is geared to examining past patterns to give positive indications for the future. As this accorded with an achievable aim of the research, the longitudinal method was therefore adopted. 3. The principles of neural networks Neural networks are a recently developed type of adaptive computer program which can learn patterns in data, mimicking the action of the human brain. The

data are applied to the program in a process called training, during which the program learns by example the underlying patterns in the data. When the training process is complete, the program acts as a model of the data which can be used to forecast the outcome of new events which conform to the patterns in the training data. Our preference for using neural networks in this investigation was motivated by their increasing use by academic and commercial analysts in the task of recognition of complex patterns in multivariate data. Their ability to identify non-linear underlying patterns as shown by Cybenko (1989), de Groot et al. (1991), Funahashi (1989) and Hornik et al. (1989) is a strong recommendation for their use in the interpretation of commercial property data in which there are numerous and complex interactions of influences and the distinct possibility of the existence of non-linear patterns. If the patterns are indeed non-linear, then neural networks are able to model them. Neural networks are regarded by many authoritative commentators as a useful addition to standard statistical techniques, and are in fact themselves based on statistical principles: see Bishop (1995). 4. Assessment of the available data In order to pursue the research effectively, a fairly large data bank of expert valuations over several years was needed. It is well recognised in valuation research that, because of the paucity of commercial market transactions and the lack of supporting information, it is necessary to rely on valuation expertise rather than the limited empirical evidence of achieved commercial prices. This view is backed by Cullen (1994) of IPD who argued that valuations are much more accurate than has been suggested. We were thus very fortunate to be given access to past valuations from Richard Ellis over some eight years. The properties comprise a range of office investments in the City of London and the West End which are regularly re-valued on a monthly basis. This data source gave a continuum of valuation expertise involving over 90 separate valuations for each property a veritable treasure trove! However, what is more important are the most recent valuations which revealed an over-renting situation running back about three or four years. This clearly was having a major influence on the valuations, and accordingly it was decided to disregard data prior to the overrenting period. Using spreadsheets it was possible to summarise and analyse the Richard Ellis valuations, property by property. This spreadsheet analysis, using iterative techniques to test equivalent and all-risks yields, enabled a checking and consistency programme to operate throughout the recorded life of each property. In discussion with Richard Ellis, a number of issues relating to the valuations were clarified. As a result, the spreadsheets contained complete records of the detailed inputs, month by month, of all the numerical data used to achieve the Richard Ellis valuations of each property. The valuation method adopted by Richard Ellis is a standard practice used with over-rented properties (freehold) of capitalising the estimated rental value in perpetuity at an all-risks yield to which is added the capital value of the amount of over-renting for a

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restricted period, capitalised at a higher rate of return in step with the long-term bond market. Having obtained this spreadsheet format, we next had to focus on the necessary process to find patterns within these data which would support a forecasting role for artificial neural networks. What we were looking for were general economic influences (i.e. outside factors) which could be linked to a valuers interpretation of property market yields and cash flow expectations. In a testing process, the linkage of various external economic factors (i.e. other than property market statistics) such as inflation, equity yields and the bond market were considered. For the period of the valuation data being examined (that is 1991 to 1996) perhaps due to the over-renting nature of many properties, it was apparent that long-dated gilt interest rates had an important influence over the movement of valuations. Such over-renting meant that the capital values were substantially attributable to the covenant of the lessee to pay the rent (a quasi-bond situation) notwithstanding that the market rental value was lower. Hence there was a logical and experimental foundation for the inclusion of long-term gilts as a contributory variable in determining our capital estimates and predictions; a view also proposed by Baum who pointed out (the) wholly rational but poorly recognised lagged relationship between bond yields and yields for property with long-term bond-like cash flows (Baum, 1995), which connection we surmised to apply to the rent overage situation existing under most of the leases. It was possible to show that gilts have an effect on capital valuations by measuring the linear correlation between capital values and current and past gilts. These correlations were significant back to a year before the capital valuations and so we conclude that gilts are a leading indicator of the movement of property valuations. Having accepted the hypothesis that 15 year gilts are indeed a major external influence on valuations, it was decided to model the property valuations as a double time series of the valuations and the 15 year gilts. The outcome of the work was to simulate these previous valuations for the time series using property indices relevant to the locational zones of the properties, a process we have termed backtracking, rather than the Richard Ellis valuations. 5. Preliminary exploratory work The next section of the work was therefore concentrated on examining the effect of gilts on the valuations. The initial work laid the basis for the methods which are described in this paper by showing that for the London commercial properties studied, there were two influences on the development of capital valuations with time: current and lagged 15 year gilts and variables relating to the properties themselves. Particularly important were overage period, rental value and rent received. In view of the fact that capital valuation fluctuations are influenced mainly by external economic factors and variables relating to the individual building and its lease structure, it was decided that these factors and variables would be incorporated by using a double time series of gilts and capital values. The gilt time series encapsulated the economic influences on the

valuation, and the capital valuation time series contained the influence of the variables relating to the individual properties: not only overage, rental value and rent received, but any other variables which were not immediately available as specific numbers but which were embedded in the time series nevertheless (Farmer and Sidorowich, 1988; Takens, 1981). Thus according to the Takens theory, a time series can include the contributory variables (Box et al., 1970; Cottrell, 1995; Moore II et al., 1994). The question may arise as to why forecast property yields and forecast rent indices were not used in addition to gilt returns to project the subject valuation forward. It was considered that the inclusion of such property indices was not necessary because they were all implicit in the time series of the capital values. Thus the expected influences on valuation movements from both economic and property indices were all taken into account by the double time series of lagged gilts and capital valuations. Furthermore, there are distinct advantages in the lagging process, i.e. using past data series as inputs. By using the data in this longitudinal format, any forecast errors would be mitigated by the influence of the lags. Consequently, we felt there would be a good chance of the forecasts of the valuations being within reasonable bounds, a hypothesis which was ultimately supported by the results. In addition, the incorporation of additional time series would have increased the number of inputs to the model so drastically as to make it impossible to find the underlying general patterns which are necessary in order to predict the series into the future. This is known to mathematicians as the curse of dimensionality (Bishop 1995). 6. The backtracking technique: creating a valuation history The actual history of Richard Ellis valuations was certainly a very worthwhile bonus in examining valuation trends in a defined market over a period of time, permitting longitudinal analysis in some depth. However, such a bonus is a rare phenomenon and what was being sought was an all-purpose model for valuation forecasting that would operate independently of such a recorded valuation history. The possibility of creating a simulated history was proposed, taking as a base an actual valuation at the current date, or a transaction that could be analysed into an acceptable valuation format. This simulated history was named backtracking and consisted of creating historical valuations for individual properties by relating variations in valuations back in time to factors specific to the particular property, and to property indices applying to the location and type of investment. Further arguments for using backtracking rather than valuation history, in addition to data availability issues are: An actual valuation history will contain all abrupt changes in valuation brought about by particular unique circumstances applying to the property in the past, e.g. physical changes to the building and tenant lease changes. Such changes, though important, are not necessarily relevant to the future trend of valuations (i.e. short-term forecasts). What are more relevant are the physical state of the property and the tenant

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lease status as revealed by the construction of the valuation (or analysis of the transaction) in the adopted base data (i.e. from todays open market value OMV); A simulated valuation history which is backtracked from todays OMV adopts all the attributes of the current valuation such as the physical state of the property and the tenant lease status, and thus establishes a requisite pattern of valuations in the past derived from the base data. Such a pattern is necessary to enable any forecasting technique such as neural networks to learn underlying patterns in a longitudinal series of valuations, so providing the requisite key to short-term forecasting, as is subsequently described. What is also significant for the verification of the method of backtracking is that when comparing backtracked valuations with actual valuation histories, there is a reasonably close correlation, although the figures are not identical because of various changes to valuations of individual buildings which do not influence the general trend. The process of backtracking is tantamount to valuing with the benefit of hindsight a very exact science! By hitching a current valuation to historic and recognised indices of property yield and rental levels, plus historic 15-year gilt yields, a smoothed pattern of valuations can be produced backwards in time. We began with the premise that at the start of the forecasting period there would be either a sale price (which could be analysed into an acceptable valuation) or a detailed valuation. With this initial input it was possible to backtrack the valuation over a considerable period of time at monthly intervals using Hillier Parker figures for Average Yields and Rent Index (as benchmarks for the valuation series). The gilt prices for any overage situation were historical, as were the rents passing and any previous changes due to rent reviews. The structure of the lease (in each case) is sacrosanct and the rent payable under the lease is a contractual cash flow running through to various termination dates. The method of valuation adopted at the date of valuation (or method of analysis of a current capital transaction) was used to take the valuation backwards in time; thus consistency is achieved whilst the relevant lease parameters obtain. This smoothed valuation trail contains within it all the factors (consistent with hindsight) that go to relate a valuation figure to every incremental point on the time scale. It was then for the neural network to unravel and weight the inherent patterns. The neural network uses lagged valuations from this valuation trail and a lagged economic indicator (15 year gilts) to process the network, and there was little difficulty in obtaining an accurate fit to such a backward time series of valuations. The question of the comparison of the backtracks with the actual historic valuations was examined in the course of the investigation. Over the historical period covered by the investigation, which was 53 months prior to January 1996, the backtracks did actually correspond reasonably well to the actual RE

valuations, except that the backtracks were smoother than the real valuations. Over the period of the work, however, the discrepancy between the two was low, and gave us the confidence that backtracking was a good, smooth approximation to the real past values. The next step was a forward one. The backward time series was then related to the gilts to produce a model which was tested for its prediction ability. However, there was a need to make a forward prediction of the 15 year gilts to support the forecasting method. Notwithstanding the fact that the gilt predictions may introduce certain errors, these errors were not critically important because the main influence on the property values was the combined lags of the known historic gilts, thereby mitigating any discrepancies in the forward gilt predictions. The precise methods are described in the next section. 7. Experimental procedure The methods used for the modelling of time series by neural networks have been widely reported in the literature (Azoff 1994) and in fact are a development of the autoregressive methods well established and reported in the statistical literature, e.g. Kendall and Ord (1990). In essence, a single time series has only one dimension, i.e. the successive values of the series, monthly in this investigation. A higher dimensionality (i.e. number of inputs) is required to enable a model to take into account the various multiple factors that influence the values of the time series. This dimensionality is achieved by considering that a current value of the series depends on previous values, so that the inputs to the model are the past values of the series going back perhaps six to 12 months from the current value. This is known as a time lag window, and this can be moved over the historical data of the series to produce data cases upon which to adjust the parameters of the model. In this case, the parameters of the model are the weights in the neural network. In the case of statistical models, they are the coefficients in the autoregressive series. The prediction procedures described in this paper commenced in January 1996. This was taken as the first base month for the work. At this time, the 15 year gilt values and the Richard Ellis valuations for the properties for January were known. The valuations were used to produce the backtracked capital valuations, going back at least 53 months, to provide sufficient data to enable the neural networks to find patterns in the data. There were two phases in the prediction procedure. The first was to predict the 15 year gilts for six months ahead, based on the time series of the gilts for the preceding months and for this, a neural network was trained on gilts data backwards from, and including, January 1996. The training set used to produce consisted of 40 data cases, each case consisting of 13 consecutive monthly gilt figures. This the first case consisted of the gilt figures for January 1996, December 1995, November 1995 and so on back to January 1995. The second case consisted of the gilt figures for December 1995 back to and including the gilt result for December 1994. Each successive case differed from the previous one by a shift of one month back in time. This set of

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training cases was presented as the training set to the neural network, in order to determine the correct weights for modelling the historic patterns in the data. The neural network consisted of 12 input nodes and one output node; the output was the most recent gilt value window whilst the remaining gilt values for the preceeding months were the 12 inputs. The algorithm used for training was back propagation and the network had two hidden or internal nodes which allow the network to respond to non-linear patterns in the data. The training was carried out for 850 case presentations presented in random order. When training had finished, the neural network was used to predict one month ahead, using as input the January 1996 gilts value and the preceeding 11 months gilt values. Thus the first forecast of the network gave a prediction of the gilt for February 1996. To obtain the forecast for March 1996, the inputs to the trained network model were its own prediction for February 1996 and the remaining 11 months prior to that. The process was repeated until six steps ahead were predicted. This enlarged gilts data set of 40 cases plus six new ones containing the predictions was used as the input set for part of the main predictive network as described next. The gilt forecasts are given in Figures 1 and 2 along with the actual values. Comments on these appear in Section 8. The main predictive neural network for the valuation forecasts consisted of 26 inputs, consisting of 13 consecutive monthly gilt values, the latest being the output month of the neural network. The remaining 13 inputs consisted of consecutive values of the backtracked capital valuations for the subject property, the most recent being the base month for the predictions which is one month behind the gilt series. The output of the neural network was the next
0.088 0.086 0.084 0.082 0.08 0.078 Key Real Values F1 F2 F3 F4 F5 JAN FEB MAR APR 96 96 96 96 Months MAY 96 JUN 96 JUL 96 AUG SEP OCT NOV 96 96 96 96

Figure 1. Forecast of 15 year Gilts. F1 is the January based forecast for February to June, F2 is February based for the March to July forecasts etc.

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Gilt Returns 0.088 0.086 0.084 0.082 0.08 0.078 Key 0.076 0.074 0.072 JAN 96 FEB 96 Months Real Values Median Forecasts

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Figure 2. Medians of 15 year gilt forecasts

month, corresponding to the month of the most recent value in the gilt series because this had already been predicted by the gilt forecasting procedure described above. The neural network was trained for 850 cycles on 40 vectors, using the same parameters that were used for the gilts, including one hidden layer of two nodes. The trained network was then used to predict six steps ahead using predicted values as inputs after the first step ahead prediction. These procedures were repeated for all the 16 properties, as well as a separate network to predict the whole portfolio. The predictive processes as described above were carried out for each month from January to May 1996; thus the January base was used to make predictions for February to July inclusive, the February base for March to August inclusive, and so on, ending with the May base for the June to November predictions. All the predictions were compared with the Richard Ellis valuations for the subject properties as they became known throughout the prediction period. The graphs in Figures 3 to 10 present the Richard Ellis valuations (up to July) and each of the five forecasts made designated F1 to F5 in date sequence. For ease of comparison, the graphs are all expressed as indices with the January 1996 Richard Ellis valuations as 100. All valuation predictions were made in advance without knowledge of the actual subsequent Richard Ellis valuations. On the other hand, our predictions were not made known to the Richard Ellis valuation team a double-blind procedure! 8. Discussion of the results As time moved forward and the base month moved from January 1996 to May 1996, there were clearly some multiple predictions for some months. Where these were available, the medians for these months were considered, rather than the arithmetic mean. The median is a measure of central tendency regardless of

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Figure 3. Forecasts of the totalled 16 portfolio properties

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Figure 4. Neural network forecasts of the total portfolio

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extreme individual values, whereas the mean would include outliers which could distort the forecasting picture (IAAO, 1990). Prior to any property forecasting, it was necessary to predict forward the 15 year gilts. Figure 1 shows the spread of the forecasts whereas Figure 2 matches the median of the forecasts to actual gilt returns. Bearing in mind that gilts are considered to be an efficient market, it is not surprising that there are variations between real and predicted returns, but the lagging principle, i.e. property valuations depend mainly on lagged gilts values, minimises the effects of inaccuracies as previously discussed.

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Figure 6. Medians of the neural network forecasts of the total portfolio

Consider now the forecasting of the whole portfolio which in value terms exceeds 700 million in total and comprises 16 office investment properties in the City and West End of London. The results were obtained in two ways: one by merely totalling the 16 individual property forecasts, and the second by a separate neural network which predicted forward from a base of the sum of all the separate 16 backtracked valuations. The results are given in Figures 3 and 4. They demonstrate a reassuring similarity to each other which gives confidence in the methods. Furthermore, they demonstrate the expected widening of the prediction band with the lengthening of the prediction period.

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Figure 7. Forecasts of capital valuations for a property in the City of London

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Figure 8. Medians of forecasts for City of London property

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As to accuracy compared with the Richard Ellis valuations, forecasts F2 to F5 pick up the impending overall downward trend of the portfolio valuation with a maximum divergence of 1.0 per cent in the very last forecast of F1 in July. Moreover, the close correlation of the forecasts with the Richard Ellis valuations is portrayed particularly well by plotting the median forecast for each month of F1 to F5 inclusive. Indeed, the maximum error is approximately 0.6 per cent around May see Figures 5 and 6.

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Figure 10. Medians of forecasts for a London West End property

We now examine the separate characteristics of the portfolio as represented by some individual City and West End properties. Figure 7 is a typical example of a City property which had no fundamental changes in property status over the forecasting period. Again there is the widening of the prediction band with time and an indication of a continuing downward trend which does not conflict with the latest Richard Ellis valuations showing a maximum divergence in F2 in July of approximately 1.4 per cent. Again, a closer correlation can be demonstrated by plotting the medians of the forecasts for each month (Figure 8) which shows a maximum error of 0.3 per cent from the Richard Ellis valuations in March.

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Figure 9 is a similar example of a West End property which similarly had no fundamental changes in property status over the forecasting period. The widening prediction band however indicates an upward direction, which again is not contradicted by the latest Richard Ellis valuations, with a maximum divergence of approximately 0.7 per cent of F3 in May. The plotting of the medians of the forecasts for each month (Figure 10) demonstrates this trend and shows a maximum error of approximately 0.5 per cent in May compared with the Richard Ellis valuation figures. At the end of this exercise it had to be considered whether the results obtained, in terms of accuracy when compared with the subsequent RE valuations, would be acceptable to a valuer (or perhaps more importantly to the client!). To get an overview, one should regard the figures emerging for the total portfolio and we would hope that the overall mean divergence of approximately 0.6 per cent achieved in this work is something that most valuers and clients could accept. The importance of forecasting is now becoming more relevant to the valuer because of the requirement of the RICS in the new Red Book for the valuer to produce an estimate of realisation price (ERP) when required by a client:
The new definition of estimated realisation price (ERP) moves the marketing period, as assumed in open market value (OMV), from prior to the valuation date to a reasonable period running from it, the duration of the marketing period being determined by the value In most cases, the valuer is likely to assess OMV and then consider what further changes in the market are likely during the marketing period which precedes the exchange of contracts at the resulting price. Indeed, the revisions to ERP now specify some may feel unwisely that the valuer must do this. Changes during this period may be in external factors such as yields, interest rates, the quality of the location, reduction in void properties in the locality, and/or changes in the subject property, such as the outcome of rent reviews (Lovell and French, 1995).

In view of the new Red Book requirements we suggest that our techniques could be used as a decision-support aid for the valuer, particularly in the circumstances envisaged by Crosby et al. (1993). Whilst we are cautiously encouraged with the level of correlation between our predictions and the actual Richard Ellis valuations, further work is being pursued aimed at developing our techniques and researching the various influences on capital valuation movements over time. 9. Conclusions The work concludes that it is possible to find underlying patterns in historical or backtracked capital valuations, and that the patterns are inter-related to 15 year gilts in the market under examination, working over monthly incremental time periods in the case of over-rented properties. It is then possible to model the underlying patterns in neural networks using a double time series (lagged) of capital valuations and 15 year gilts, and then to project these values forward in time for a period of five months with reasonable accuracy. These forecasts may be useful as a decision-support tool for assessing Estimated Realisation Price (ERP) and also in consideration of the new definition of Forecast of Value

recently introduced by an amendment to the RICS Appraisal and Valuation Manual (The Red Book) (1995). 10. Epilogue: quo vadis? Prediction is a dangerous practice. Never prophesy, particularly about the future (Sam Goldwyn attrib.) Subsequent shocks in the market can upset all the best laid schemes of analysts and valuers. At the moment, our research suggests that there is an overall downward trend in the London office market (at least as revealed by this important portfolio) which conflicts with the anticipated recovery reported in the Chartered Surveyor Monthly (CSM) January 1996 Despite recent indications of limited confidence in the occupational commercial property market, capital values are forecast to increase by 6 per cent in 1996 and 7 per cent in 1997, according to the latest commercial property model forecast by the RICS and London Business School. However, as the Director of Research Consultancy in Richard Ellis (McIntosh, 1995) states Although long-dated UK government yields have fallen in the last six months from around 8.5 per cent to almost 7.5 per cent, we predict that property investment yields are unlikely to fall substantially during 1996. Time will tell and our research continues!
References Azoff, E.M. (1994), Neural Network Time Series Forecasting of Financial Markets, John Wiley, Chichester. Baum, A. (1995), Can foreign real estate investment be successful?, Real Estate Finance, pp. 819. Bishop, C.M. (1995), Neural Networks for Pattern Recognition, Clarendon Press, Oxford. Box, G.E.P. and Jenkins, G.M. (1970), Time Series Analysis, Forecasting and Control, Holden-Day, San Francisco, CA. Cottrell, M., Girard, B., Girard, Y., Mangeas, M. and Muller, C. (1995), Neural modeling for time series: a statistical stepwise method for weight elimination, IEEE Transactions on Neural Networks, Vol. 6 No. 6, pp. 1355-64. Crosby, N., Ward, C. and French, N. (1993), Valuation accuracy: a self-fulfilling prophecy?, RICS Cutting Edge Conference Proceedings, London, pp. 67-75. Cullen, I. (1994), The investment property databank: the accuracy of valuations re-visited, RICS Cutting Edge Conference Proceedings, London, pp. 91-102. Cybenko, G. (1989), Approximation by superposition of a sigmoidal function, Math. Contr. Signal Syst., Vol. 2, pp. 304-14. de Groot, C. and Wurtz, D. (1991), Analysis of univariate time series with connectionist nets: a case study of two classical examples, Neurocomputing, Vol. 3, pp. 177-92. Do, A.Q. and Grudnitski, G.A. (1992), Neural network approach to residential property appraisal, The Real Estate Appraiser, December, pp. 38-45. Donnelly, W.A. (1990), Nonlinear multiple regression: conjectures and considerations, Journal of Property Valuation & Investment. Vol. 8, pp. 350-61. Evans, A., James, H. and Collins, A. (1992), Artificial neural networks: an application to residential valuation in the UK, Journal of Property Valuation & Investment, Vol. 11, pp. 195-204.

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