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Paper eres2004_134:
Corporate Real Estate Ownership Implications. International Performance Evidence

id eres2004_134
authors Eichholtz, Piet; Brounen, Dirk
year 2004
title Corporate Real Estate Ownership Implications. International Performance Evidence
source 11th European Real Estate Society Conference (2-5 June 2004) Milano, Italy
summary In this paper we explore corporate real estate ownership internationally. Based on a sample of 4,636 companies from 18 industries and 9 countries we document distinct patterns and trends in the corporate ownership level of real estate. Real estate ownership appears to be driven by industrial rather than national differences, with corporate real estate ratios ranging between 0.13 for Business Services and 0.63 for the Mining sector. Overall, real estate ownership appears to be decreasing over time, which may be due to the gaining popularity of lease alternatives. When analyzing the stock performance of the companies in our sample, we discover a significantly negative relationship between real estate ownership and a firmís systematic risk. Idiosyncratic risk bears no significant relationship with real estate ownership. With respect to stock returns our results show that returns are lowest among firms with the highest real estate ownership levels in each industry. After controlling for the variation in risks, the remaining return patterns differ strongly across industries, with a significantly negative relationship between stock outperformance and real estate ownership for Communications and Business Services and a positive but not significant relationship for Transportation.
keywords Corporate real estate; Firm performance; Systematic risk
series ERES:conference
discussion No discussions. Post discussion ...
ratings
session Risk Analysis
last changed 2008/12/21 10:41
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