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Sources of net present value gains in the acquisitions of corporate real estate

Ting Kien Hwa (Department of Estate Management, Faculty of Architecture, Planning and Surveying, Universiti Teknologi MARA, Shah Alam, Malaysia)

Journal of Corporate Real Estate

ISSN: 1463-001X

Article publication date: 9 May 2008




Acquisitions of properties are carried out by corporate firms for development, investment and operational uses. Acquisitions of corporate real estate announced by listed non‐property companies are found to have positive stock price reactions. This paper seeks to identify the reasons why acquisitions of corporate real estate are a positive net present value (NPV) investment to the acquiring firms.


This paper draws theoretical explanations from real estate and finance literature to identify the reasons for the acquisitions to be positive NPV investments to non‐property listed companies.


The sources of gains in property acquisitions are worth, marriage value and business synergy. These explanations provide the reasons why the announcement of property acquisitions by listed companies could lead to positive wealth gains in the capital market.


This paper offers the explanations behind the positive stock price reactions upon the announcements of corporate real estate acquisitions.



Kien Hwa, T. (2008), "Sources of net present value gains in the acquisitions of corporate real estate", Journal of Corporate Real Estate, Vol. 10 No. 2, pp. 121-129.



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Copyright © 2008, Emerald Group Publishing Limited

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