Open AccessCOMPETITIVE ADVANTAGE FROM OPERATIONAL CORPORATE REAL ESTATE DISPOSALS
Author(s) -
Antti Louko
Publication year - 2004
Publication title -
international journal of strategic property management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.43
H-Index - 30
eISSN - 1648-9179
pISSN - 1648-715X
DOI - 10.3846/1648715x.2004.9637504
Subject(s) - business , real estate , capital structure , finance , notice , corporate real estate , scale (ratio) , capital (architecture) , flexibility (engineering) , agency (philosophy) , industrial organization , structuring , competitive advantage , economics , debt , marketing , philosophy , physics , archaeology , management , quantum mechanics , epistemology , political science , law , history
The large‐scale operational corporate real estate disposals, which have lately become more and more common in Europe, can create many benefits to corporations. Firstly, the corporations can get an immediate capital injection without additional external financing to support growth or to better capital structure. Secondly, corporations can in the best case obtain more property industry knowledge, economies of scale, tax advantages and increased flexibility through property disposals. However, it is also important to notice that sometimes the best expert is an internal property manager and that large corporate real estate deals can be slow and costly to structure. Furthermore, if the outsourcing is not planned well, agency problems and inflexibility could arise. In addition, off‐balance sheet financing is becoming more difficult due to changes in accounting rules. In all, it is crucial to have a solid property strategy that supports the overall business goal before structuring large‐scale disposals.