International Real Estate Review

2015 ◽  
Vol 18 (1) ◽  
pp. 01-43
Author(s):  
Alain Chaney ◽  
◽  
Martin Hoesli ◽  
Keyword(s):  
Real Estate ◽  
Opportunity Cost ◽  
Cost Of Capital ◽  
Individual Property ◽  
Percentage Points ◽  
Capitalization Rate ◽  
The Individual ◽  
The Cost ◽  
New Evidence ◽  
Appraisal Smoothing

This paper contributes to the debate about capitalization rate determinants by comparing the driving factors of appraisal-based cap rates with those of transaction-based cap rates. By using a rich database of real estate transactions in Switzerland for the period of 1985¡V2010, we identify several property-specific variables that have not been used in prior research and that increase the explained portion of the cap rate variance by as much as 10 percentage points. The results show that compared to investors, appraisers overweight factors that they can easily observe when they appraise a property, at the cost of variables related to growth expectations and the opportunity cost of capital. This has two implications. First, as the easily observable factors hardly change over time, while the latter variables change frequently and significantly, it provides new evidence that may add to the appraisal-smoothing discussion. Second, investors put less emphasis on factors that are diversifiable, which suggests that they favor a portfolio perspective, whereas the focus of the appraisers is more on the individual property level.

Better risk pricing can unlock billions in investment

2018 ◽  
Keyword(s):  
Direct Investment ◽  
Cost Of Capital ◽  
Political Risk ◽  
Investment Decisions ◽  
Content Type ◽  
Cross Border ◽  
Percentage Points ◽  
Risk Pricing ◽  
The Cost

Subject Pricing political risk. Significance The mis-measurement of political risk is resulting in the cost of capital being valued 2-4 percentage points higher than it should be in assessments ahead of cross-border investment decisions. Research suggests that in 2016 this could have increased net foreign direct investment (FDI) to non-advanced countries by more than 10%. Impacts Political risk measurement is set for a renaissance, with interest from practitioners and end-users likely to proliferate. Frontier markets that are on the edge of inclusion in 'emerging' portfolio allocations could see an uptick in investment inflows. Returns to long-term capital managers, from insurers to pension funds, will rise as cost-of-capital calculations grow in sophistication.

scholarly journals Pengaruh Disclosure dan Manajemen Laba terhadap Cost of Capital

2020 ◽  
Vol 10 (1) ◽  
pp. 56
Author(s):  
Tri Kurniawati ◽  
Nadia Ayu Rifani Putri
Keyword(s):  
Real Estate ◽  
Earnings Management ◽  
Multiple Regression ◽  
Significant Influence ◽  
Cost Of Capital ◽  
Stock Exchange ◽  
The Real ◽  
Purposive Sampling ◽  
The Real Estate ◽  
The Cost

This study is aimed to analyze the influence of disclosure and earnings management on cost of capital. The population of this study is the real estate companies which is listed at the Indonesia Stock Exchange (IDX) and the sample is determined by purposive sampling. The samples consist of 28 companies in 2013-2015. Disclosure is measured by Disclosure Index, earnings management is measured by discretionary accrualls and cost of capital is estimated by EBO model. The research hypotheses are tested by using multiple regression. The results of this research indicate that (1) disclosure has no significant influence on the cost of capital, and (2) earnings management has positive and significant influence on cost of capital.

scholarly journals HOTEL PROPERTY VALUATION IN A PANDEMIC ECONOMY: A STRATEGIC STUDY OF IMO CONCORDE HOTEL OWERRI IN 2020

2021 ◽  
Vol 2 (1) ◽  
pp. 22-31
Author(s):  
Chikezie Okoronkwo ◽  
◽  
Esther Oladejo ◽  
Okoronkwo Henry ◽  
◽  
...  
Keyword(s):  
Real Estate ◽  
Financial Statements ◽  
Cash Flows ◽  
Operating Income ◽  
Property Valuation ◽  
A Value ◽  
Capitalization Rate ◽  
Strategic Study ◽  
The Cost

Of all classes of real estate, the hotel property is so unique in character and structure that assigning a value becomes the most intriguing aspect of the profession of Estate Surveying and Valuation. The uniqueness of the property rests partly on its distinctive outlay as against the business potential. Incidentally, most valuations of this property rely on the propensity of the property to produce acceptable returns to pay off the cost of investment and the management. Being that as it may, the quantum of externalities that play varying roles in shaping the final value of a hotel property is such that any professional must be careful not to circumvent even the minutest of considerations. It is all too known that the value of real estate rises and falls with the character of the neighbourhood and region where it is located. Hotels values are not different and in addition rise and fall with the whim of fashion and the fortunes of the region of location. This study examined not just the different methods and approaches to the valuation of a hotel property but also explored the benefits of other micro economic parameters that play significant roles in establishing the basis of any monetary index that could be referred to as value by conducting a comprehensive review of the hotel itself in comparison with its competitive market to confirm whether the hotel is under- or over performing against its competitors the intention being to have a grasp of the income-generating ability of the property upon which the application of a capitalization rate will convert the estimated cash flows into an estimated value. Though a 5 star hotel was used as case study, the outcome is applicable to all hotels carrying on business in Nigeria and other parts of the world. The study recommends among others that Estate Surveyors and Valuers involved in the valuation of hotels need to be skilled in reading financial statements and translating them into stabilized net-operating income because as much as hotel properties are physically different, in different locations, and with different management; volatility of the hospitality market and the external factors are bound to affect value. The study revealed that in so much as the travel patterns of lodgers were affected by the Covid 19 pandemic bringing with it a crash in the income-generating potential, the value of hotels was not so affected especially with relation to furniture, fittings and equipment.

scholarly journals PROBLEMS OF TAXATION OF INDIVIDUAL PROPERTY IN THE UDMURT REPUBLIC

2020 ◽  
Vol 30 (1) ◽  
pp. 72-77
Author(s):  
I.G. Shcherbakova ◽  
G.A. Khripko
Keyword(s):  
Real Estate ◽  
Income Tax ◽  
Property Tax ◽  
Property Taxes ◽  
Tax Base ◽  
Individual Property ◽  
Local Taxes ◽  
Udmurt Republic ◽  
The Russian Federation ◽  
The Individual

The tax on individual property is one of the local taxes of the tax system of the Russian Federation, which is established by regulatory legal acts of representative bodies of municipalities and is a source of income for local budgets. The share of property taxes received by local budgets is not more than 20 %, of which 17.5 % are income from land tax and 2.5 % are income from property tax of individuals. A feature of this tax is that its collection is determined solely by the characteristics of the property, regardless of the individual solvency of the taxpayer. From January 1, 2015 in the Udmurt Republic, the tax base for the tax on property of individuals is the cadastral value of real estate, before that the tax was calculated on the basis of the inventory value. In connection with the involvement of new real estate in the tax turnover and as a result of the cadastral valuation of real estate in the Udmurt Republic, there is an increase in the tax base and income tax on property of individuals. Despite this, the analysis of the property tax of individuals based on the cadastral value made it possible to identify a number of problems of its application in the Udmurt Republic, as well as identify possible solutions.

International Real Estate Review

2015 ◽  
Vol 18 (3) ◽  
pp. 331-364
Author(s):  
George D. Cashman ◽  
◽  
David M. Harrison ◽  
Hainan Sheng ◽  
◽  
...  
Keyword(s):  
Real Estate ◽  
Cost Of Capital ◽  
Political Risk ◽  
Weighted Average ◽  
Asia Pacific ◽  
Cost Of Debt ◽  
Political Rights ◽  
Equity Financing ◽  
The Cost ◽  
The Impact

This study investigates the impact of political risk on the cost of capital for publicly traded real estate firms. More specifically, by using a sample of 102 REITs and listed property trusts, which hold nearly 6,000 distinct investment properties across the Asia-Pacific region, we find strong empirical evidence that increased exposure to political risk increases both the cost of equity financing of a firm and its weighted average cost of capital. Interestingly, no such linkages are apparent between political risk and the cost of debt of a firm. These empirical results are robust to a variety of alternative measures of political risk, including a: 1) political rights index, 2) political change index, and 3) corruption perceptions index.

scholarly journals The Impact of Investment Incentives: Evidence from UK Corporation Tax Returns

2019 ◽  
Vol 11 (3) ◽  
pp. 361-389 ◽  
Author(s):  
Giorgia Maffini ◽  
Jing Xing ◽  
Michael P. Devereux
Keyword(s):  
Cost Of Capital ◽  
First Year ◽  
Investment Incentives ◽  
Corporation Tax ◽  
Percentage Points ◽  
Accelerated Depreciation ◽  
Tax Returns ◽  
Tax Payments ◽  
The Cost ◽  
The Impact

Using UK corporation tax returns, we provide evidence on the effects of accelerated depreciation allowances on investment, exploiting exogenous changes in the qualifying thresholds for first-year depreciation allowances (FYAs) in 2004. The investment rate of qualifying companies increased by 2.1–2.5 percentage points relative to those that did not qualify. We exploit variation in the timing of tax payments to show that this effect is primarily due to the change in the cost of capital, rather than a relaxation of financial constraints. Discontinuity at notches in the cost of capital at the qualifying thresholds does not affect our results. (JEL D25, G31, H25, H32)

scholarly journals The relationship between labour unions’ bargaining power and firms’ operating flexibility: New evidence from emerging markets

2015 ◽  
Vol 46 (4) ◽  
pp. 65-76 ◽  
Author(s):  
I. G. Choi ◽  
P. Sohn ◽  
J-Y. Seo
Keyword(s):  
Bargaining Power ◽  
Cost Of Capital ◽  
Stock Exchange ◽  
Firm Level ◽  
Labour Unions ◽  
Capital Costs ◽  
Financial Firms ◽  
Union Coverage ◽  
The Cost ◽  
New Evidence

This study analyses the relevance between the bargaining power of labour unions and the operating flexibility on firms’ capital costs by using non-financial firms listed on the Korean stock exchange from 1999 to 2013. Under the assumption that constraints in business activities attributed to the collective bargaining power of labour unions lead to reduced operating flexibility and increased capital costs, we test this notion empirically; the main test results are as follows: First, we find from portfolio analysis that the cost of capital is higher for firms in more unionized industries. Second, we find that union coverage positively affects the cost of capital at a significant level. Third, we confirm through robustness tests that the industry adjusted union coverage (IAUC) also has a positive effect on the cost of capital at a significant level. As a result, the effect holds after controlling for a host of industry- and firm-level characteristics, and is stronger when unions have more favourable bargaining power. Thus, our findings are consistent with the hypothesis that the increase of labour unions’ bargaining power leads to raise firms’ capital costs by decreasing operating flexibility in the Korean firms.

Sign in / Sign up

Export Citation Format

Share Document