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Practice vs theory: short-term financials trumps long-term value creation

Knut Boge (Oslo Business School, Oslo and Akershus University College of Applied Sciences, Oslo, Norway)
Alenka Temeljotov Salaj (Oslo Business School, Oslo and Akershus University College, Oslo, Norway)

Journal of Corporate Real Estate

ISSN: 1463-001X

Article publication date: 11 September 2017

611

Abstract

Purpose

The aim of this paper is to present findings from the research project “Oscar – Value for Owners and Users of Buildings” and investigate two research questions: What in early-phase planning of real estate projects and facilities management creates value for owners and users of buildings? Do respondents in private enterprises, public administrations and hybrid organizations have different priorities during early-phase planning of buildings and facilities management concerning which factors creates value for owners and users of buildings?

Design/methodology/approach

This study is based on a national survey (N = 837) among Norwegian owners and users of buildings where the respondents report their emphasis on economic, social, environmental and physical aspects during early-phase planning of buildings. The data have been analysed through descriptive statistics, ranking of means and one-way ANOVA supplemented with bootstrapping.

Findings

Many Norwegian owners and users of buildings emphasize short-term financials and seem to overlook recent research concerning what creates long-term value such as life-cycle planning and the buildings’ elasticity, flexibility, generality. Respondents employed by private enterprises seem to have shorter time horizon than respondents employed by hybrid organizations and public administrations.

Research limitations/implications

Further empirical research in Norway and preferably also in other countries, based on surveys with large random samples of respondents is needed to establish whether it is possible to generalize this study’s findings.

Practical implications

Increased emphasis during early-phase planning of buildings on aspects creating long-term value can significantly increase the buildings’ value creation for owners and users. This article indicates some attention areas and possible strategies during early-phase planning to improve the long-term value creation for owners and users.

Originality/value

This is an empirical study (national survey) with particular emphasis on how early-phase planning of buildings can contribute to value creation for users and owners during the buildings’ use phase.

Keywords

Acknowledgements

The research project “Oscar – Value for Owners and Users of Buildings” (project number 235294/O30) is funded by the Norwegian Research Council’s user-driven research-based innovation programme. Thanks to the respondents who took their time to answer Oscar’s survey. Also thanks to the anonymous reviewers for their comments and suggestions.

Citation

Boge, K. and Temeljotov Salaj, A. (2017), "Practice vs theory: short-term financials trumps long-term value creation", Journal of Corporate Real Estate, Vol. 19 No. 3, pp. 186-204. https://doi.org/10.1108/JCRE-06-2016-0022

Publisher

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Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited

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