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The Global dispersed corporate real estate operations and decision making processess of 26 international companies in six industry segments are compared. High standing CRE organisations, which are indicated by fewer levels between the CRE executive and CEO, frequent CRE meetings with senior management, a broad span of control for facility and real estate operations, and an executive committee for real estate matters, share common characteristics. High standing CRE organisations receive more strategic planning information, have more authority and power, and more formal policies and standards. Use of relationship management with business units also corresponds with better sharing of planning information. Some of the challenges faced today by firms carry large international real estate portfolios include: cultural issues, financing concerns, lack of local expertise/market knowledge, corruption in locales, and a lack of a standard/streamlined process.

This paper aims to discuss whether alignment between corporate real estate strategy and corporate strategy exists for non-property companies listed on the Johannesburg Securities Exchange and what effects alignment has on the firms’ financial performance.

The study was both qualitative and quantitative in nature, with a specific focus on non-property firms listed on the Johannesburg Securities Exchange. The qualitative part of the study involved the analysis of the firms’ annual reports to determine the presence and use of corporate real estate strategies and their alignment to corporate strategy and the extraction of financial indicator data. The quantitative portion of the study involved the use of multivariate analysis, to distinguish and quantify the relationship, if any, between corporate real estate strategy and the identified financial performance indicators. The independent variables were the CRE strategies employed and the dependent variable was the share price. The methods used in this study have been applied before in European and Asian studies; this assisted in ensuring that validity and reliability was achieved.

The study finds that the most used strategy by firms (47%) is that which facilitates production, operation and service delivery. The Consumer Goods, Healthcare and Telecommunications sectors appear to demonstrate the highest level of alignment. Return on Shareholder Funds has a strong significant positive correlation with share price. Flexibility as a corporate real estate strategy also has a significant positive coefficient, which indicates a positive relationship with share price.

Although consistent with results of studies conducted in Europe and Asia, the results of this research may not be applicable to privately held non-listed firms, state-owned enterprises, non-profits and educational institutions. This study also ignores the dynamic external environment in which firms operate and the necessity of firms adjusting their corporate real estate strategy to their changing business strategy.

These results suggest that the incorporation of corporate real estate strategy in the firms’ corporate strategy formulation has the potential to enhance shareholder value for South African firms. Real estate developers, landlords and owner occupiers would benefit from better understanding the strategic requirements of corporations to ensure that the solutions they provide increase the likelihood of maximizing shareholder return.

The role of corporate real estate strategy in the firms’ corporate strategy formulation has the ability to enhance shareholder value. This research adds to the scant literature on corporate real estate management in South Africa.

Compiled by K.G.B. Bakewell covering the following journals published by MCB University Press: Facilities Volumes 8‐17; Journal of Property Investment & Finance Volumes 8‐17; Property Management Volumes 8‐17; Structural Survey Volumes 8‐17.

This paper analyses the inherent risks associated with corporate real estate (CRE). First, the author looks at corporate risk in general and at the context in which CRE decisions are made. Next, the types of risk generally inherent in CRE usage are examined, beginning with development risks and then grouping other risks into three categories: financial, physical and regulatory CRE risks. Possible risk management strategies are offered, to reduce the risks associated with CRE usage: due diligence, avoidance, insurance, hedging and diversification. Lastly, conclusions and recommendations for accounting for risk in corporate real estate management (CREM) are provided. The discussion of the risks inherent in CRE usage offers a starting point for future and more detailed discussions of the risk in CREM and provides a new perspective on the management of CRE assets.

Compiled by K.G.B. Bakewell covering the following journals published by MCB University Press: Facilities Volumes 8‐18; Journal of Property Investment & Finance Volumes 8‐18; Property Management Volumes 8‐18; Structural Survey Volumes 8‐18.

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.

Regarding the immense real estate divestitures that have taken place over the last couple of years, some stakeholders have begun to wonder if these short‐term activities may affect the long‐term competitive advantage of a company. While it appears reasonable that property divestitures enhance the financial situation of a company from a so‐called owner perspective, there is no equivalent quantitative evaluation for the loss in space utilisation and flexibility from a user perspective. Consequently, real estate decision making is based upon an insufficient information basis and is dominated by the investment perspective. In order to better align corporate real estate and real estate investment functions better, this paper introduces a formal decision model which describes the situation of corporate real estate decision makers. They have to trade off entrepreneurial flexibility gained by real estate holdings against the financial opportunity cost of freeing up capital. Making use of a prototype decision situation, the paper demonstrates how the decision maker can improve the underlying information basis for property divestment decisions, using a real option approach. Hence, real estate decisions gain in two respects: they are more transparent and, more importantly, their design is more suitable if the company wants to employ real estate holdings to increase the overall value of the company.

With growing interdependence between financial markets, the goal of this paper is to examine the dynamic interdependence between corporate equity and public real estate markets for the USA and a select group of seven European developed economies under a cross-country framework in crisis and boom market conditions. Dynamic interdependence is related to four measures of market linkages of “correlation, spillover, connectedness and causality”.

This study adopts a four-step investigation. The authors first estimate “time-varying variance–covariance spillovers and implied correlations” modeled with the bivariate BEKK-MGARCH methods. Second, the methods of Diebold and Yilmaz (2012, 2014) measure the conditional volatility spillover-connectedness effects across the corporate equity and public real estate markets based on a decomposition of the forecast error variance. Third, the authors implement nonlinear bivariate and multivariate causality tests to understand the lead-lag dynamics of the two asset markets' returns, volatilities and net directional volatility connectedness across different sample periods. Finally, the authors conclude the study by providing a portfolio hedging analysis.

The authors find that corporate equity and public real estate are moderately interdependent to the extent that their diversification benefits increases in the longer term. Moreover, the authors find increased corporate equity-public real estate causal dependence of the market groups of the European and international portfolios during the GFC and INTERCRISIS periods. The nonlinear causality test findings indicate that the joint information of asset markets can be a useful source of prediction for future innovation of market risks. Additionally, policy makers may also be able to employ conditional volatility and volatility connectedness as two other measures to manage market stability in the cross-asset market dependence during highly volatile periods.

One major take away from this academic research is since international portfolio investors are not only concerned the long-term price relationship but also the correlation structure and volatility spillover-connectedness, the conditional BEKK modeling, generalized risk connectedness analysis and nonlinear causal dependence explorations from this multi-country study can shed fresh light on the nature of market interdependence and magnitude of volatility connectedness effects in a multi-portfolio framework.

The hedging performance analysis for portfolio diversification and risk management indicates that industrial stocks (“pure” equities) are valuable assets that can improve the hedging performance of a well-diversified corporate equity-public real estate portfolio during crisis periods. For policymakers, the findings provide important information about the nature of causal links and predictability during the crisis and asset-market boom periods. They can then equip with this information to manage and coordinate market stability in cross corporate equity-real estate relationships effectively.

Although traditional research has in general reported at least a moderate degree of relationship between the two asset markets, investors' knowledge of stock-public real estate market linkage is somewhat inadequate and confine mostly to broad stocks (i.e. stocks that are exposed to public real estate influence) in a single-country context. In this paper, the authors examine the interdependence dynamics in a multi-country (multi-portfolio) context. A clear understanding their changing market relationships in a multi-country context is of crucial importance for portfolio investors, financial institutions and policy makers. Moreover, since the authors use an orthogonal stock market index, the authors allow global investors to understand the potential diversification benefits from stock markets that are beyond the public real estate market under different market conditions.

Corporate activity in Ireland has experienced a significant growth as the economy has benefited from extensive inward investment. The purpose of this paper is to analyse the role of real estate in corporate decision making within Ireland. Corporate real estate issues are initially discussed as the contextual anchoring for a survey of corporate occupiers within both the Republic of Ireland and Northern Ireland. Findings indicate a high level of professional and practical experience in relation to real estate but this has not been fully exploited by companies in developing a proactive corporate strategy. Real estate plays a largely traditional role within organisations although it appears that differences exist between indigenous and externally parented companies. Comparisons are drawn with other similar surveys at an international level.

The purpose of this paper is to examine the impact of globalisation on corporate real estate strategies. Specifically, it seeks to identify corporate real estate capabilities that are important in a hypercompetitive business climate.

This paper utilises a qualitative approach to analyse secondary data in order to identify the corporate real estate capabilities for a hypercompetitive business environment.

Globalisation today is an undeniable phenomenon that is fundamentally changing the way business is conducted. In the light of global hypercompetition, corporate real estate needs to develop new capabilities to support global business strategies. These include flexibility, network organization and managerial learning capabilities.

This is a conceptual paper and future empirical research needs to be conducted to verify the propositions made in this paper.

Given the new level of uncertainty in the business climate, that is, hypercompetition, businesses need to develop dynamic capabilities that are harder for competitors to imitate in order to maintain what is considered a “momentary” competitive advantage. The findings of this paper are useful to guide corporate real estate managers in this regard.

This paper is original in two ways. First, it applies the strategic management concept of capabilities to corporate real estate. Second, it links the key challenge that businesses face today, i.e. globalisation, to the concept of capabilities as a means to maintain competitive advantage.