Corporate real estate and stock performance in the international retail sector

Dirk Brounen (RSM Erasmus University, Department of Financial Management Room F‐4.30, P.O. Box 1738, 3000 DR, Rotterdam, The Netherlands, E‐mail:, Tel. +31 104082371, Fax. +31 104089017.)
Gustaf Colliander (Maastrich University, The Netherlands)

Journal of Corporate Real Estate

ISSN: 1463-001X

Publication date: 1 December 2005


Purpose – To analyse the effect of corporate real estate ownership on the stock performance of firms active in the international retail sector. Design/methodology/approach – A sample of 454 retail companies is separated into three geographical regions and six different sub‐sectors. We measure the corporate real estate holdings using balance sheets information and link these to the risk and return characteristics of the individual firms. Findings – We find that corporate real estate ownership varies greatly across subsectors. This variation is explained by differences in location and customisation demands of real estate. Retailers for which the micro‐location of real estate is a critical value driver tend to own more of it. In general, corporate real estate ownership for retail companies is associated with a strong relative performance, which contrasts markedly with the negative performance effects found for other industrial sectors. Research limitations/implications – Although we include as many firms as possible in our sample, we are still confronted with sample size limitations while performing sub sample comparisons. Practical implications – Our results show how owning real estate instead of renting it will impact the long run profitability of retailers. Originality/value – Where most of the extending literature focuses on sketching the impact of real estate ownership using theory and isolated cases, we no offer numerical proof based on a international dataset.



Brounen, D., Colliander, G. and Eichholtz, P. (2005), "Corporate real estate and stock performance in the international retail sector", Journal of Corporate Real Estate, Vol. 7 No. 4, pp. 287-299.

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