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Paper eres2001_100:
Shareholder Value Implications of Real Estate Finance-A theoretical Analysis for the German Real Estate Market

id eres2001_100
authors Adam, Alexander
year 2001
title Shareholder Value Implications of Real Estate Finance-A theoretical Analysis for the German Real Estate Market
source 8th European Real Estate Society Conference (26-29 June 2001) Alicante, Spain
summary Real Property on average accounts for ten to forty percent of corporate market value. Its relevance for Shareholder value however, has not yet been analyzed satisfactorily and existing studies focus on cash flow aspects. Impact and potential of finance aspects have been neglected. This study analyses the theoretical framework and the applicability of Shareholder Value concepts to Real Estate finance. Potentials result from the difference between actual and theoretically appropriate capital costs due to the portfolio’s risk-return profile. Avoiding those opportunity costs by putting adequate finance in place, is however linked to three conditions. Real Estate performance must be transparent, management has to be independent and investors have to be able to choose their preferred Risk-Return profile. Only after that is accomplished, already calling for major strategic and organizational changes, specific financial instruments for equity and debt can be utilized. Due to their highly innovative character, acceptance in the German capital markets cannot yet be estimated.
series ERES:conference
discussion No discussions. Post discussion ...
ratings
session European real estate finance
last changed 2009/07/10 18:07
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