New Business Practices and the Corporate Real Estate Portfolio: How Responsive is the UK Property Market?

1998 ◽  
Keyword(s):  
Real Estate ◽  
Business Practices ◽  
Property Market ◽  
Corporate Real Estate ◽  
New Business ◽  
The Uk

scholarly journals THE IMPACT OF STRUCTURAL CHANGES ON CORPORATE REAL ESTATE OWNERSHIP: EVIDENCE FROM GERMANY

2020 ◽  
Vol 0 (0) ◽  
pp. 1-16
Author(s):  
Julian Seger ◽  
Andreas Pfnür
Keyword(s):  
Structural Change ◽  
Real Estate ◽  
Structural Changes ◽  
Ownership Strategy ◽  
Requirements Change ◽  
Corporate Real Estate ◽  
New Business ◽  
Company Survey ◽  
Business Requirements ◽  
The Impact

Although real estate resources represent a high percentage of the corporate assets of non-property companies, their future role is unclear. Longevity and difficulty in revising property-related decisions clash under dynamically changing environmental conditions. This makes it necessary to consider the ownership strategy and its altering role in order to avoid inefficiencies and not to hinder companies in mastering structural change successfully. In a first step, data from a telephone company survey (CATI) among 69 corporate real estate managers of German companies are grouped by performing a two-step cluster analysis according to the degree to which they are affected by structural change. The resulting clusters are then tested regarding differences in their ownership strategy. The empirical analysis shows that firms highly affected by structural change exhibit a higher willingness to decrease the proportion of ownership. The decline in real estate assets is particularly evident in the office segment and in increased acceptance of sale-and-rent-back solutions. First hints show that structural change and associated new business requirements change the relevance of CRE ownership. To avoid competitive disadvantages, especially European firms should scrutinize their high ownership ratios.

scholarly journals ADJUSTMENT OF CORPORATE REAL ESTATE DURING A PERIOD OF SIGNIFICANT BUSINESS CHANGE

2019 ◽  
Vol 23 (3) ◽  
pp. 171-186 ◽  
Author(s):  
Howard Cooke ◽  
Rianne Appel-Meulenbroek ◽  
Theo Arentze
Keyword(s):  
Real Estate ◽  
Business Strategy ◽  
Time Lag ◽  
Business Environment ◽  
Business Strategies ◽  
Business Change ◽  
Flexible Resources ◽  
Corporate Real Estate ◽  
New Business ◽  
Dynamic Alignment

This paper seeks to understand whether the alignment process between business strategy and Corporate Real Estate (CRE) between 2007 and 2014 was dynamic. It investigated the financial data of 230 UK companies by means of a distributed time lag auto-regression model. The results show an increased commitment to CRE suggesting a reduced ability to dynamically align the portfolio. Evidence is found that CRE adjusts as turnover, profitability and employment numbers alter. However, measures of efficiency, effectiveness and productivity are not improving. The new business strategies of transient competitive advantage and blue oceans strategy require flexible resources, which require CRE to be capable of dynamic alignment. This study shows such flexibility does not yet exist in practice. Current theories of alignment should be reconsidered in light of the changing business environment. Without a dynamic alignment capability of CRE a company’s financial performance will be impaired.

The pricing of corporate real estate holdings on the UK capital market

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Julian Seger ◽  
Kristina Stoner ◽  
Andreas Pfnuer
Keyword(s):  
Real Estate ◽  
Capital Market ◽  
Service Industries ◽  
Content Type ◽  
Balance Sheets ◽  
Corporate Real Estate ◽  
The Uk ◽  
Real Estate Assets ◽  
Estate Ownership ◽  
The Capital Market

Purpose The purpose of this study is to find out if corporate real estate ownership is priced into the capital market performance of non-property companies in the UK. This is of particular interest because ownership still represents a significant weight on the balance sheets and is predominantly considered unfavourable due to its bulkiness and difficult revisability in the event of changes in space demand. This draws attention to the UK as one of the most important European economies that have been exposed to strong uncertainties and dynamics, for example, due to the withdrawal voting of the United Kingdom from the European Union (BREXIT). Design/methodology/approach A first look at the real estate assets reported in balance sheets provides insight into possible changes in ownership strategy. This serves as a basis for subdividing companies based on their real estate assets using a portfolio-based approach and that are then analysed using the Fama and French multi-factor model with regard to their influence on capital market returns. Findings In general, the share of real estate assets has fallen over the past 10 years, although coinciding with BREXIT voting, some industries such as manufacturing show a turnaround. At the same time, ownership is priced in as a factor on the capital market, which applies to a sample across industries, as well as to separately considered sectors in the manufacturing and service industries. The pricing also shows a counter-cyclical pattern. Practical implications Corporate real estate management should be aware of the negative influence of ownership, especially against the background of economic fluctuations. The reduction of ownership can reduce the associated cost of capital and increase company success. Originality/value Previous UK-related studies mostly refer to a period before the global economic crisis in 2008, and therefore, are too old to reflect a changed view on corporate real estate ownership because of new corporate environmental conditions, based on inaccurate proxies or mainly refer to the retail segment. This research gap is closed.

Lease versus buy decision for corporate real estate in the UK

2011 ◽  
Vol 13 (3) ◽  
pp. 157-168 ◽  
Author(s):  
Richard Barkham ◽  
Abraham U. Park
Keyword(s):  
Real Estate ◽  
Corporate Real Estate ◽  
The Uk

Is corporate real estate at a crossroads?

2014 ◽  
Vol 16 (4) ◽  
pp. 275-289 ◽  
Author(s):  
Rob Harris ◽  
Howard Cooke
Keyword(s):  
Real Estate ◽  
Design Methodology ◽  
Business World ◽  
Workplace Environment ◽  
Content Type ◽  
Corporate Real Estate ◽  
The Uk ◽  
New Research ◽  
The Way

Purpose – The purpose of this article is to provide an overview of the way that corporate real estate (CRE) has developed in the UK since the early 1990s. Design/methodology/approach – Review of how various professional bodies, occupiers and landlords have responded to the changing business and workplace environment. Findings – CRE managers and the professional bodies that represent them are at a crossroads. Whilst the business world has evolved since 1990, the CRE sector has not and faces the prospect becoming purely a technical rather than a strategic subject. Originality/value – A review of what has happened and not new research.

Corporate real estate outsourcing contracts and their embedded flexibility

2005 ◽  
Vol 7 (4) ◽  
pp. 306-325 ◽  
Author(s):  
Fernando de Zúñiga
Keyword(s):  
Real Estate ◽  
Case Studies ◽  
Design Methodology ◽  
Corporate Real Estate ◽  
The Uk ◽  
Outsourcing Contracts ◽  
Portfolio Design

Purpose – This paper intends to respond the question that comes up to CRE managers when they consider the outsourcing technique for their CRE management and portfolio. The question, if it is possible to capture in the outsourcing contract sufficient flexibility to meet the changing needs of the business and add value, addresses the existing debate on flexibility arguing the suitability of the outsourcing structures for corporates portfolio. Design/methodology/approach – The paper undertakes a methodological analysis, considering the main outsourcing deals in the UK and continental Europe and discussing the main theories on management outsourcing. Theories of flexibility of CRE portfolios are considered and the main characteristics of the new REPs discussed. Findings – The paper finds that it is possible to capture in the outsourcing contract sufficient flexibility to meet the changing needs of the business and add value because a contract can capture all the flexibility desired and iit would add value as the properties would be used efficiently. Two outsourcing contracts in the UK are explained in two case studies, which support this. Originality/value – The paper suggests methods to outsource CRE portfolios and obtain adequate flexibility to add value to shareholders.

scholarly journals Corporate real estate strategy in the UK and Malaysia

2006 ◽  
Vol 8 (4) ◽  
pp. 168-177 ◽  
Author(s):  
Zaiton Ali ◽  
Stanley McGreal ◽  
Alastair Adair ◽  
James R. Webb
Keyword(s):  
Real Estate ◽  
Corporate Real Estate ◽  
The Uk

scholarly journals Student residences: time for a partnership approach?

2020 ◽  
Vol 38 (2) ◽  
pp. 128-146
Author(s):  
Laura McCann ◽  
Norman Hutchison ◽  
Alastair Adair
Keyword(s):  
Higher Education ◽  
Real Estate ◽  
Private Sector ◽  
Critical Role ◽  
Well Being ◽  
Education Sector ◽  
Content Type ◽  
Corporate Real Estate ◽  
The Uk ◽  
Uk Higher Education

PurposeRecent years have witnessed significant increases in the number of undergraduate students entering UK higher education. This increase is a result of the removal of the sector-wide cap on student numbers in England and Wales, along with a growth in overseas students attracted by the reputation of UK universities and the weakening of the value of Sterling. Adopting a corporate real estate perspective, the aim of this paper is to understand how the UK student residence market is structured and financed, and to identify the motivations that are driving the strategies adopted by the universities, private sector providers and investors in this market. In doing so, this research seeks to test the appropriateness of the Gibler and Lindholm (2012) model of corporate real estate strategy in the UK higher education sector.Design/methodology/approachData was gathered from a survey of UK university secretaries, combined with interviews of private sector providers, bank lenders and the analysis of secondary data on investment flows into purpose built residential accommodation (PBSA).FindingsUK university real estate strategy is mainly one of outsourcing student accommodation to reduce costs as well as employing modern purpose-built student housing as a marketing tool and brand enhancer. This strategy is also used as a risk mitigatory tool enabling universities to adjust to changing student demands. Revisions to the Gibler and Lindholm (2012) model are proposed to reflect the reality of the real estate strategy adopted by the universities. Private sector providers view the sector favourably and are set to be the main providers of new supply over the next decade, entering into strong partnerships with the universities. While there is evidence of some oversupply of bed spaces in certain cities, well-located developments are viewed as an attractive lending opportunity. Since 2013 there has been significant growth in institutional investment into UK student accommodation, albeit sentiment is currently tempered by political uncertainty.Practical implicationsThe role of PBSA designed to meet modern student requirements is playing a critical role not only in attracting, recruiting and retaining students but also enhancing the overall higher education experience promoting student welfare and well-being.Originality/valueThe corporate real estate strategy adopted by the UK higher education sector is an under researched area. This paper focuses on the strategy surrounding student accommodation provision and reports on the findings of an extensive survey of the key players in this sector. The results are of value to all stakeholders including government and regulators, at a time when higher education is facing substantial challenges. The evidence of a growing partnership between universities and the private sector is viewed as a logical solution, both for the present and the foreseeable future.

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