REAL ESTATE PORTFOLIO OPTIMAL DEBT STRUCTURE: A PAN-EUROPEAN APPROACH

2010 ◽  
Keyword(s):  
Real Estate ◽  
Debt Structure ◽  
European Approach

A Study on Optimal Capital Structure of Vietnamese Real Estate Listed Firms

2018 ◽  
pp. 45-70
Author(s):  
Binh Thi Thanh Dao ◽  
Phuong Hoai Lai
Keyword(s):  
Real Estate ◽  
Capital Structure ◽  
Stock Returns ◽  
Secondary Data ◽  
Debt Structure ◽  
Theoretical Frameworks ◽  
Equity Prices ◽  
Listed Firms ◽  
Endogenous Default ◽  
Primary Focus

This paper focuses on those structural models with an endogenous default barrier where firms optimally choose a default boundary so as to maximize the equity value. The analysis commences to cover avowedly theoretical frameworks from pioneering works by Black-Scholes (1973) and Merton (1974) on zero-coupon debts to later extensions of those models for a more complex debt structure to include coupon perpetual bonds (Leland, 1994) and of arbitrage maturity or rolledover debts (Leland and Toft, 1996). Furthermore, this paper studies the empirical performance of capital structure models by testing the optimized gearing levels computed from those models with different assumptions. Parameters of these models are estimated from the firms’ equity prices. The novelty of this paper lies in the fact that it is not merely a summary of static theories on capital structure but it is the first of its kind to empirically study the capital structure choices of Vietnamese real estate firms, with primary focus on static models. This research follows secondary data analysis to investigate market information of stock returns and attempts to examine the potential dissimilarity in actual and proposed optimal gearing levels for the two years 2014 and 2016.

scholarly journals Debt diversification and investments of European listed real estate companies

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Alexey Zhukovskiy ◽  
Heidi Falkenbach ◽  
Ranoua Bouchouicha
Keyword(s):  
Real Estate ◽  
Public Debt ◽  
Bank Lending ◽  
Bank Loan ◽  
Negative Effects ◽  
Debt Structure ◽  
Investment Activity ◽  
Content Type ◽  
Investment Rates ◽  
The Relationship

Purpose This paper aims to examine the relationship between the use of public debt and investment activity of European listed real estate companies. Design/methodology/approach Using a hand-collected sample of debt structures of 102 European public real estate companies, and using European Central Bank lending standards survey as a proxy for bank credit availability, the authors test a conditional hypothesis on the relationship between investment rates and the use of public debt during period of constrained bank lending environment in Europe. Findings The results show that ex ante diversification of debt allows retaining higher investment rates when the main source of debt, bank lending, is shrinking. The effect is statistically and economically significant and increases during times of tight bank lending constraints. The authors find no support to debt capacity explanation of the effect. They neither find support of the higher investment rates to be indicative of overinvestment problem. The results are robust to alternative model specifications and estimators. Research limitations/implications The empirical analysis is limited to Europe. Practical implications Investments and the growth of real estate companies depend on their ability to seize value-increasing opportunities that arise in the competitive markets. This paper evaluates the role of a diversified debt structure in this context. The results suggest that debt structure can have material importance for the investment activity of European listed real estate companies and issuance of public debt can help companies to counterbalance the negative effects of restricted bank loan supply on the investment levels. Originality/value The paper extends the literature on debt structures of listed real estate firms by considering the effect of debt diversification on investments.

Real Estate Fraud

2008 ◽  
Author(s):  
Daniel Bradley
Keyword(s):  
Real Estate
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