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Article
Publication date: 31 December 2002

Forrest E. Huffman

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…

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3047

Abstract

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.

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Journal of Corporate Real Estate, vol. 5 no. 1
Type: Research Article
ISSN: 1463-001X

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Article
Publication date: 9 November 2015

Ruben Bartelink, Rianne Appel-Meulenbroek, Pauline van den Berg and Ellen Gehner

The purpose of this paper is to identify the corporate real estate (CRE) risks that might influence the added value of CRE to the shareholder value of an organization and…

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2022

Abstract

Purpose

The purpose of this paper is to identify the corporate real estate (CRE) risks that might influence the added value of CRE to the shareholder value of an organization and to analyze if there are differences in perception of these risks according to job and company specifics of the respondents.

Design/methodology/approach

A literature study was carried out to identify the CRE risks. In addition, a number of interviews were held with CRE specialists to complete the list of risks. An inventory of the risk perception was gathered by making use of a survey among 70 end-users, 16 CRE consultants and 2 CRE academics. Differences are analyzed making use of Kruskal–Wallis tests, Mann–Whitney U tests and t-tests.

Findings

In total, 43 risks in six different categories were identified. It turned out that the risk perception differentiates the most per geographical location or industry segment. The size of the organization (number of employees) does not appear to influence the way in which the risks are perceived.

Practical implications

This paper provides CRE managers and risk managers with a basis for a risk register that contributes to identification of possible CRE risks. Besides, it enables a comparison of their risk perception with industry peers.

Originality/value

Earlier research concerning CRE risk management approached the subject from a specific point of view, but did not provide a CRE risk list using an integral perspective and covering multiple topics. Also, this paper provides insights in how CRE risk management is perceived in practice.

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Journal of Corporate Real Estate, vol. 17 no. 4
Type: Research Article
ISSN: 1463-001X

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Article
Publication date: 19 September 2019

Enrico Battisti, S.M. Riad Shams, Georgia Sakka and Nicola Miglietta

The purpose of this paper is to improve understanding of the integration between big data (BD) and risk management (RM) in business processes (BPs), with special reference…

Abstract

Purpose

The purpose of this paper is to improve understanding of the integration between big data (BD) and risk management (RM) in business processes (BPs), with special reference to corporate real estate (CRE).

Design/methodology/approach

This conceptual study follows, methodologically, the structuring inter-textual coherence process – specifically, the synthesised coherence tactical approach. It draws heavily on theoretical evidence published, mainly, in the corporate finance and the business management literature.

Findings

A new conceptual framework is presented for CRE to proactively develop insights into the potential benefits of using BD as a business strategy/instrument. The approach was found to strengthen decision-making processes and encourage better RM – with significant consequences, in particular, for business process management (BPM). Specifically, by recognising the potential uses of BD, it is also possible to redefine the processes with advantages in terms of RM.

Originality/value

This study contributes to the literature in the fields of real estate, RM, BPM and digital transformation. To the best knowledge of authors, although the literature has examined the concepts of BD, RM and BP, no prior studies have comprehensively examined these three elements and their conjoint contribution to CRE. In particular, the study highlights how the automation of data-intensive activities and the analysis of such data (in both structured and unstructured forms), as a means of supporting decision making, can lead to better efficiency in RM and optimisation of processes.

Details

Business Process Management Journal, vol. 26 no. 5
Type: Research Article
ISSN: 1463-7154

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Article
Publication date: 19 June 2020

Julian Seger, Ao Li and Andreas Pfnuer

The purpose of this paper is to examine the influence of corporate real estate (CRE) holdings on firm performance. Unlike previous studies, the paper does not only…

Abstract

Purpose

The purpose of this paper is to examine the influence of corporate real estate (CRE) holdings on firm performance. Unlike previous studies, the paper does not only consider the firms’ primary business segment but also their activities in different business fields. This is of particular interest because additional segments often have different requirements for the provision of space and thus for the ownership strategy, which could have led to a possible bias in previous studies. Furthermore, additional business areas are becoming more relevant through integrated solutions.

Design/methodology/approach

The study uses a balance sheet data set of companies in the six largest European economies for the period from 2000 to 2016. Germany serves as a suitable laboratory for deeper analyses. Holdings of 490 firms are regressed to the stock market performance using a two-stage approach. This procedure is repeated by considering additional business segments.

Findings

The analyses reveal that ownership reduces stock market performance. Additional business activities also appear to influence the relevance of ownership for firm performance.

Practical implications

The research shows that ownership is priced depending on its primary and additional business activities. First, this insight helps capital market players to choose the right investment strategy. Second, it provides CRE decision-makers with information on the optimal provision of real estate.

Originality/value

This is the first paper to examine the contribution of real estate ownership on firm performance in light of the fact that companies operate in more than one sector.

Details

Journal of European Real Estate Research , vol. 13 no. 2
Type: Research Article
ISSN: 1753-9269

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Article
Publication date: 1 June 2005

Hans Lind and Ted Lindqvist

The Swedish central government has implemented a radical market‐oriented reform of its real estate management. Authorities are free to rent premises from private firms…

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1107

Abstract

The Swedish central government has implemented a radical market‐oriented reform of its real estate management. Authorities are free to rent premises from private firms, and stateowned properties have been allocated to a number of entities that lease their properties to authorities on conditions similar to those on the open market. The background and experience from these reforms are described in this paper. Local authorities and county councils have also reformed their real estate management systems in the same direction, but not as radically. There were many unexpected problems with implementing these systems, related for example to difficulties in writing good contracts for special purpose buildings, conflicts about rent setting and differences in bargaining power between the property‐owning units and the tenants/authorities. The general view is, however, that the reform created necessary economic incentives for the authorities in the public sector to economise on premises, but that it is very important to think through the details and to adjust the system to changing circumstances. An example is that the introduction of school vouchers created problems for some systems of setting internal asset rents.

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Journal of Corporate Real Estate, vol. 7 no. 2
Type: Research Article
ISSN: 1463-001X

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Article
Publication date: 24 April 2009

Zhen Chen and Sukulpat Khumpaisal

The purpose of this paper is to introduce a novel decision‐making approach to risks assessment in commercial real estate development against social, economic…

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3591

Abstract

Purpose

The purpose of this paper is to introduce a novel decision‐making approach to risks assessment in commercial real estate development against social, economic, environmental, and technological (SEET) criteria. It therefore aims to describe a multiple criteria decision‐making model based on analytic network process (ANP) theory, and to use an experimental case study on an urban regeneration project in Liverpool to demonstrate the effectiveness of the ANP model.

Design/methodology/approach

The paper commences with a description about risks related to commercial real estate development, and provides a list of risk assessment criteria based on literature review and experience in related areas. The ANP is then introduced as a powerful multicriteria decision‐making method. An experimental case study is finally conducted with scenarios and assumptions based on a real urban regeneration project in Liverpool.

Findings

The paper defines a group of risks assessment criteria against SEET requirements directly related to commercial real estate development. An ANP model is set up with 29 risks assessment criteria, and results from an experimental case study reveal that the ANP method is effective to support decision‐making based on risks assessment to select the most appropriate development plan; and therefore it is applicable in commercial area.

Originality/value

This paper defines SEET criteria for risks assessment in regard to SEET requirements to emphasise sustainable development; while the ANP is introduced to assess risks in commercial real estate development. The ANP model provides a platform for decision makers in commercial real estate development to evaluate different plans based on the degree of interactions among risk assessment criteria.

Details

Journal of Property Investment & Finance, vol. 27 no. 3
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 29 May 2019

Malka Thilini and Nishani Champika Wickramaarachchi

The purpose of this paper is to analyze the commercial property development risk factors from the entrepreneur’s point of view against social, economic, environmental…

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1050

Abstract

Purpose

The purpose of this paper is to analyze the commercial property development risk factors from the entrepreneur’s point of view against social, economic, environmental, technological and political risk assessment criteria. After that, this study aims to assess the risk factors based on the analytical network process (ANP) model and to prioritize the key risk factors to identify which risk factor is highly affected to the commercial development process.

Design/methodology/approach

The data were collected through face-to-face interviews using a structured questionnaire. The analysis of the risk factors involved the ANP model using super decision software.

Findings

The results revealed that there are five major risk factors such as environmental, social, economic, technological and political risk, and 32 sub-risk factors. According to the super matrix calculation, the synthesized values for three projects were 0.0704, 0.0532 and 0.0431, respectively. It was identified that Ward City was 0.0704, indicating that it is comparatively less risky and, hence, can be categorized as the best development and considering the sub-risk factors; the results show that the highly affected risk factors for the development are: the council approval process, climate changes and natural disaster, and the least affected risk factors are confidence to the market, lifecycle value, investment return and currency conversion factor.

Practical implications

The paper includes implications for the development of commercial properties, risk and risk assessment criteria to make risk management strategies and policy implementation.

Originality/value

The research findings are helpful in improving risk management strategies in the country, and policy formulation should focus on the above identified three risk factors in order to mitigate the risk in every stage and to achieve sustainable project development while increasing the satisfaction of long-term investment goals.

Details

Journal of Property Investment & Finance, vol. 37 no. 5
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 21 March 2019

Cencheng Zhao, Eunhwa Yang, Yiqian Nie and Justin D. Russo

This paper aims to provide organizations with a new tool to make decisions related to a facility (building) selection process. Traditionally, value engineering (VE…

Abstract

Purpose

This paper aims to provide organizations with a new tool to make decisions related to a facility (building) selection process. Traditionally, value engineering (VE) applies the Value = Function/Cost formula to evaluate the worth of a product. In this paper, the VE-based facility-selection approach is proposed, where the cost of a facility is expressed in net present value (NPV) as it contains the net expense of purchasing or leasing a building as well as the time value of money. Also, a method of quantifying functions and involved risks of different facility choices is proposed.

Design/methodology/approach

The framework of the VE-based facility-selection process is broken down into three steps: preparation, calculation/analysis and assessment. In the latter part of this paper, the authors share a sample analysis by illustrating the analysis and decision-making process when three hypothetical facility-selection options are available.

Findings

The sample analysis indicates that companies can get the lowest cost and risk while improving their functions to achieve the highest value by using the modified VE formula to drive an optimal option for company’s business expansion and facility-selection process.

Originality/value

This paper provides organizations with a strategic system and process to select proper facilities or buildings for business expansion. The VE approach suggested in this study can allow facility/real estate portfolio decision-makers to analyze financial and functional aspects of the facility at the same time and obtain the value coefficient when they choose a new facility from different options. Finally, they can select the best option, which has the highest value coefficient, given financial and functional considerations.

Details

Journal of Corporate Real Estate , vol. 21 no. 2
Type: Research Article
ISSN: 1463-001X

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Article
Publication date: 24 April 2020

Zainab Toyin Jagun

The feasibility and viability appraisal technique is becoming increasingly crucial in the planning systems, theory, applications and outputs for property development and…

Abstract

Purpose

The feasibility and viability appraisal technique is becoming increasingly crucial in the planning systems, theory, applications and outputs for property development and project investments. This paper aims to account for the findings of the practices associated with risk in the feasibility and viability appraisal process. Also, it examines the need for a practical framework for conducting a feasibility and viability appraisal, which can be employed by estate surveyors and valuers in Nigeria

Design/methodology/approach

This study adopted purposive sampling techniques to administer 240 sets of questionnaires, out of which 210 sets were well-thought-out to be useable for the analysis after data screening. Statistical package for social sciences (SPSS), structural equation modelling (SEM) and analysis of movement structures (AMOS) were the main analytical tools used to carry out the reliability test, normality test, exploratory factor analysis, confirmatory factor analysis, measurement and structural model.

Findings

The analysis results indicated that the P-values of the various forms of concepts of risks in feasibility and viability appraisal process (preparation) for property development and the investment market was statistically significant: technological factor - 0.000; political factor- 0.000 and economic factor- 0.000. However, a non-significant effect was found with socio-environmental factors on the preparation of housing development appraisal with P-value 0.155, and that risk management is neither holistically implemented in the feasibility and viability appraisal process nor extensively taken into cognisance.

Research limitations/implications

This paper reports the results of the practices among estate surveyors and valuers in regarding the risk associated in the preparation stages of the feasibility and viability appraisal process

Practical implications

There are limited studies that suggest risk management factors in the appraisal reports for property development. Although previous studies have identified the risk factors, there is a lack of emphasis on management, which entails identification, assessment, monitoring and control. This study, therefore, recommends the incorporation of risk management into the feasibility and viability appraisal process implemented by estate surveyors and valuers. It is envisaged that the process will protect investors from the potential risk factors associated with investments in property development.

Originality/value

The study highlighted the need for practical or empirical research to be used to assess the significant risk factors that are needed to be reflected in the preparation stages of the feasibility and viability appraisal conduct of estate surveyors and valuers in Abuja, Nigeria.

Details

Journal of Property Investment & Finance, vol. 38 no. 3
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 1 August 2019

Per Anker Jensen and Theo J.M. van der Voordt

This paper aims to explore the impact of buildings on the creation of healthy workplaces (HWs) and end users’ physical and mental health and well-being. The paper presents…

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1180

Abstract

Purpose

This paper aims to explore the impact of buildings on the creation of healthy workplaces (HWs) and end users’ physical and mental health and well-being. The paper presents available research on the impact of workplace layout, interior design, indoor climate and “green” offices. It ends with reflections on the main lessons learned, gaps in our current knowledge and suggestions for further research.

Design/methodology/approach

A literature research has been conducted of all papers in four corporate real estate management and facilities management-oriented journals from 2008 to 2017 that discuss health and well-being and related topics such as satisfaction, productivity and creativity.

Findings

A conceptual model to analyse impact factors for HWs covers the influence of many different variables. Most papers only discuss a particular influencing factor, mainly plants and indoor climate. Various papers show that the spatial layout, in particular the level of openness and opportunities for communication, concentration and privacy and interior design have an important impact on user satisfaction, perceived productivity support and creativity. These factors may have a positive impact on HWs as well and can also be benefits of HWs.

Practical implications

The paper identifies, which factors are important to consider for creating HWs and potential benefits of HWs.

Originality/value

This paper discusses the role of CREM and FM in creating HWs and reflects on the available knowledge, current omissions and the need for transdisciplinary follow-up research.

Details

Journal of Corporate Real Estate , vol. 22 no. 2
Type: Research Article
ISSN: 1463-001X

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