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Article
Publication date: 4 December 2020

Alexey Zhukovskiy, Heidi Falkenbach and Ranoua Bouchouicha

This paper aims to examine the relationship between the use of public debt and investment activity of European listed real estate companies.

Abstract

Purpose

This paper aims to examine the relationship between the use of public debt and investment activity of European listed real estate companies.

Design/methodology/approach

Using a hand-collected sample of debt structures of 102 European public real estate companies, and using European Central Bank lending standards survey as a proxy for bank credit availability, the authors test a conditional hypothesis on the relationship between investment rates and the use of public debt during period of constrained bank lending environment in Europe.

Findings

The results show that ex ante diversification of debt allows retaining higher investment rates when the main source of debt, bank lending, is shrinking. The effect is statistically and economically significant and increases during times of tight bank lending constraints. The authors find no support to debt capacity explanation of the effect. They neither find support of the higher investment rates to be indicative of overinvestment problem. The results are robust to alternative model specifications and estimators.

Research limitations/implications

The empirical analysis is limited to Europe.

Practical implications

Investments and the growth of real estate companies depend on their ability to seize value-increasing opportunities that arise in the competitive markets. This paper evaluates the role of a diversified debt structure in this context. The results suggest that debt structure can have material importance for the investment activity of European listed real estate companies and issuance of public debt can help companies to counterbalance the negative effects of restricted bank loan supply on the investment levels.

Originality/value

The paper extends the literature on debt structures of listed real estate firms by considering the effect of debt diversification on investments.

Details

Journal of European Real Estate Research , vol. 14 no. 1
Type: Research Article
ISSN: 1753-9269

Keywords

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Article
Publication date: 5 March 2018

Maiia Sleptcova, Heidi Falkenbach and Wisa Majamaa

The purpose of this paper is to investigate the effect of Alternative Investment Fund Managers Directive (AIFMD) on European private equity real estate (PERE) industry.

Abstract

Purpose

The purpose of this paper is to investigate the effect of Alternative Investment Fund Managers Directive (AIFMD) on European private equity real estate (PERE) industry.

Design/methodology/approach

The paper draws upon a set of 12 semi-structured interviews with European PERE fund managers to explore their views on the reporting and risk management under the AIFMD, the costs and benefits associated with the AIFMD compliance and the effect of the AIFMD on European PERE industry.

Findings

A “one size fits all” approach adopted by the AIFMD results in difficulties in understanding and implementing the AIFMD requirements by PERE managers. Due to the limited applicability of the AIFMD risk reporting requirements to PERE funds, PERE managers have developed their own risk metrics, which they report internally. The formalization of risk management process and the separation of risk management function constitute the two most significant changes experienced by PERE managers. The managers recognize a positive branding effect from the authorization and improved risk awareness in their organizations due to the AIFMD.

Research limitations/implications

The current paper focuses on PERE fund managers and does not address other real estate funds falling under the AIFMD.

Practical implications

PERE fund managers require feedback and guidance from authorities and best practice recommendations from industry organizations to enable proper compliance. Industry-specific reporting requirements would benefit both the industry players and authorities.

Originality/value

Given the broad scope of the AIFMD, it is of interest to look at how PERE fund managers have adapted to the regulatory change.

Details

Journal of Property Investment & Finance, vol. 36 no. 2
Type: Research Article
ISSN: 1463-578X

Keywords

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Article
Publication date: 16 October 2017

Tuulia Puustinen, Kyösti Pennanen, Heidi Falkenbach, Anne Arvola and Kauko Viitanen

The purpose of this paper is to study views of owner-occupiers concerning infill development as a mechanism for financing major repairs in apartment buildings and…

Abstract

Purpose

The purpose of this paper is to study views of owner-occupiers concerning infill development as a mechanism for financing major repairs in apartment buildings and financial benefits they require from the infill development for accepting it near their homes (on the plot of their housing company).

Design/methodology/approach

The data used draws upon a survey of 894 respondents concerning residents’ views on infill development in Finland. The required financial benefits from the infill development were questioned in both relative proportions of the expenses related to major repairs and concrete monetary sums.

Findings

First, the findings indicate that the financial benefits owner-occupiers require in order to accept infill development are significant, covering about two-thirds of the costs of major repairs during following ten years or over 75 percent of an (imagined) upcoming pipeline repair. Second, approximately one-fifth of the respondents regard that no economic benefit is enough to make them support infill development. Third, people’s decision-making concerning infill development is complex, involving also many other factors than monetary.

Practical implications

This paper provides insight into the feasibility of infill development as a means to finance major repairs from the perspective of owner-occupiers. The paper has strong policy implications as it highlights the significance of the public authorities and their policies in enabling the infill development.

Originality/value

This is the first academic study to focus on owner-occupiers views and financial requirements for the infill development as a means to finance major repairs in apartment buildings.

Details

Property Management, vol. 35 no. 5
Type: Research Article
ISSN: 0263-7472

Keywords

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Article
Publication date: 2 March 2012

Jessica Karhu, Ari Laitala, Heidi Falkenbach and Anna‐Liisa Sarasoja

The purpose of this paper is to find out the green preferences of corporate occupiers in relation to their occupied offices. The study aims to focus on the preferences of…

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1255

Abstract

Purpose

The purpose of this paper is to find out the green preferences of corporate occupiers in relation to their occupied offices. The study aims to focus on the preferences of the end‐users at the organisational level. It also aims to study the relative importance of these preferences against one another and to seek the differences between respondent groups.

Design/methodology/approach

The survey is a case study approach concentrating on the situation in the Helsinki Metropolitan Area (Finland) in the summer of 2009. The survey was conducted as an internet‐based questionnaire with e‐mail invitations. The importance of nine given green attributes of the office buildings were ranked on a five‐point Likert scale. A total of 90 responses were analysed.

Findings

The results show that location achieved the highest importance, even though it was rated in terms of the environmental sense only. The energy efficiency of a building was ranked second. The indicative results suggest that industry sector and the position of the respondent effect the importance of the preferences.

Research limitations/implications

The Helsinki Metropolitan Area was the focus of the study, but it is believed that the results can be generalised to other office market areas in Finland.

Practical implications

The findings will benefit the management of occupying organisations, real estate investors and marketers who may now deepen their understanding of the preferences of corporate occupiers. The results may be useful to organisations promoting green buildings.

Originality/value

The mainstream sustainability research in the real estate sector has focused on green buildings in the area of new construction, and economical and technical approaches. This study concentrates on end‐users' considerations at the organisational level and green preferences in the existing office stock.

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Article
Publication date: 13 April 2010

Heidi Falkenbach

This paper aims to identify different organisation modes for international property investments and analyse the rationales for selecting each mode.

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875

Abstract

Purpose

This paper aims to identify different organisation modes for international property investments and analyse the rationales for selecting each mode.

Design/methodology/approach

The paper reports the findings of an interview study conducted among international investors in the Finnish property market.

Findings

The study identifies four main organisation modes for international property investments, the selection of each mode being dependent of the investors' perception of the informational barriers and local nature of the property market. Most of the interviewed investors also apply the same strategy in other markets they invest in, and thus the selection of the organisation mode seems not to be very dependent on the characteristics of the investment market.

Research limitations/implications

The paper analyses the organisation modes and their selection criteria only in the Finnish market.

Practical implications

The study indicates that informational barriers are still of major concern for the investors entering foreign markets. Thus, activities contributing to lowering these barriers would be beneficial for those markets wanting to attract international property investments.

Originality/value

The study is the first to analyse the organisation modes of international property investors.

Details

Property Management, vol. 28 no. 2
Type: Research Article
ISSN: 0263-7472

Keywords

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Article
Publication date: 9 August 2011

Jaakko Niskanen, Jussi Rouhento and Heidi Falkenbach

The relationship between ownership structure and firm value has long been of interest in the academic society. The purpose of this paper is to study the relationship…

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1053

Abstract

Purpose

The relationship between ownership structure and firm value has long been of interest in the academic society. The purpose of this paper is to study the relationship between European real estate investment trusts' (REITs) ownership structure and the observed firm value as measured by market‐to‐book (M/B) ratio. In addition, the potential effects of differing REIT ownership structures on other financial ratios, such as return on equity (ROE) and return on assets (ROA), are analyzed. Finally, the potential impact of strategic/insider ownership on REITs is assessed.

Design/methodology/approach

Several “difference between means” tests are run. In each test, the studied group of REITs is divided into three groups according to set criteria. Then, the potential differences observed between the groups are documented, analyzed and reported. Finally, statistical significance of the potential differences among groups is tested.

Findings

First, consistent with the previous studies, this study shows that increasing REIT block ownership results in lower M/B ratios as well as decreased dividend yield, ROE and ROA. In other words, the results suggest that, in terms of M/B ratio, the markets value REITs with low block holdings slightly higher than those with more block holders. However, the relationship is not totally explicit. Second, the relationship between strategic/inside ownership and firm value (and other financial measures) is somewhat obscure. The effects of strategic ownership are an interesting topic, also in terms of potential future research.

Practical implications

One of the fundamental ideas behind REIT legislation is to provide investors with a liquid means of investing in indirect real estate by regulating the ownership structure of the vehicle. The results of this study suggest that the more dispersed the shareholder structure, the higher the firm value, potentially due to increased stock liquidity. This finding could serve as an indication to lawmakers that the REIT ownership regulations not only work in theory but in practice, too.

Originality/value

For the first time in an academic context, the relationship of European REIT ownership structures and firm value is studied in‐depth. Proven scientific methods are employed to discern potential, yet unrevealed patterns between REIT ownership and firm value.

Details

Journal of European Real Estate Research, vol. 4 no. 2
Type: Research Article
ISSN: 1753-9269

Keywords

Content available
Article
Publication date: 16 October 2017

Clive M.J. Warren

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190

Abstract

Details

Property Management, vol. 35 no. 5
Type: Research Article
ISSN: 0263-7472

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