Real Estate Value: Creation and Destruction?

2005 ◽  
Keyword(s):  
Real Estate ◽  
Value Creation

Is property management viewed as a value-added service?

2019 ◽  
Vol 37 (2) ◽  
pp. 262-274 ◽  
Author(s):  
Dustin C. Read ◽  
Andrew Carswell
Keyword(s):  
Real Estate ◽  
Value Creation ◽  
Value Added ◽  
Professional Service ◽  
Property Management ◽  
Individual Property ◽  
Content Type ◽  
Creation Process ◽  
A Value ◽  
Value Creation Process

PurposeThe purpose of this paper is to examine the perspectives of real estate executives to assess the extent to which property management is viewed as a commodity or as a value-added professional service contributing positively to investment performance and property value maximization.Design/methodology/approachThe qualitative analysis draws on the result of 93 semi-structured interviews conducted with executives employed by some of the largest real estate investment management and service firms across the USA.FindingsThe findings suggest that significant perceptual cleavages exist in the real estate industry, with some executives believing property managers are incredibly important to the value creation process and others believing they play a much more modest role.Practical implicationsThe results highlight the need for the property management industry as whole to continue its efforts to gain recognition as a value-added professional service and for individual property management companies to actively take steps to differentiate themselves from competitors if they hope to avoid commodification and fee compression.Originality/valueThe study is the first to the authors’ knowledge to examine real estate executives’ perspectives about the roles property managers play in the value creation process, as well as their views about whether property managers have the skills and autonomy required to make value accretive decisions.

The state of value creation in the real-estate sector – lessons from lean thinking

2014 ◽  
Vol 32 (1) ◽  
pp. 28-47 ◽  
Author(s):  
Tuuli Jylhä ◽  
Seppo Junnila
Keyword(s):  
Real Estate ◽  
Value Creation ◽  
Service Providers ◽  
Added Value ◽  
Lean Thinking ◽  
Content Type ◽  
The Real ◽  
The Real Estate ◽  
Real Estate Sector

Purpose – Although great emphasis has been given to the added value of real estate, the current studies miss the phase when the actual value is created, i.e., the production phase of real-estate services. Therefore, the purpose of this paper is to evaluate the current state of value creation of the commercial real-estate services from a lean thinking perspective. Design/methodology/approach – Value creation is studied in four Finnish cases through 122 interviews and eight workshops. Findings – Cross-case analysis identified six sources of waste resulting as poor value creation: sub-process optimisation instead of optimising the entire process, the price minimisation instead of cost minimisation, difficulties responding to customer value, overloaded employees, inability to make improvements, and poorly managed information. Research limitations/implications – Although the findings are grounded on a solid data collection and analysis, the case study nature of the research and the Finnish case study settings create limitations for the generalisation of the findings. Practical implications – Service providers and other process owners can use the findings to improve their value creation and increase the productivity of their service processes. Originality/value – This is one of the first research studies that utilise lean thinking in commercial service processes in the real-estate sector and thus provides new insight into how to increase productivity through waste minimisation.

scholarly journals PARTNERSHIP PRACTICES AND THEIR IMPACT ON VALUE CREATION – REFLECTIONS FROM LEAN MANAGEMENT

2014 ◽  
Vol 18 (1) ◽  
pp. 56-65 ◽  
Author(s):  
Tuuli Jylha ◽  
Seppo Junnila
Keyword(s):  
Real Estate ◽  
Value Creation ◽  
Customer Value ◽  
Service Providers ◽  
Property Management ◽  
Lean Management ◽  
Real Estate Sector ◽  
Estate Owner ◽  
Real Estate Owner ◽  
Business District

The trend of outsourcing operational property management services by the property owners has had a prominent role in the Finnish real estate sector. At the same time, value creation has been scattered across many players such as the owner, the property manager and several service providers. This paper aims to analyse the value creation practices and mechanisms between two partners, a real estate owner and its property management company, in order to assess the current value creation. The assessment is based on a lean partnering framework presented by Lamming (1993). The customers are office tenants in the Helsinki business district. The case findings showed that the expected customer value was challenging to deliver, because waste activities disrupted the value creation. The partners had also adapted some of the value creation practices differently, which caused turbulence in value creation. In addition, the partners had missed the power of doing improvements jointly, but prefer to use bidding to establish value creation. However, through lean thinking the organisations found a much-needed new approach to develop their partnership. The principles of lean management made the problem clearer and enabled the organisations to start dealing with the relevant challenges.

Intellectual capital in tangible intensive firms: the case of Brazilian real estate companies

2014 ◽  
Vol 15 (2) ◽  
pp. 333-348 ◽  
Author(s):  
Daniel Pitelli Britto ◽  
Eliane Monetti ◽  
Joao da Rocha Lima Jr
Keyword(s):  
Real Estate ◽  
Intellectual Capital ◽  
Value Creation ◽  
Market Value ◽  
Fair Value ◽  
Market Risk ◽  
Cross Sectional ◽  
Content Type ◽  
Physical Assets ◽  
Using Data

Purpose – The purpose of this paper is to clarify whether value created by real estate (RE) companies (tangible intensive firms) can be evaluated better using intellectual capital (IC) elements (human, structural and physical assets) or traditional accounting measures of efficiency (ROIC and profit margins). Design/methodology/approach – Correlations and cross-sectional OLS regressions with robust standard errors were used to find relationships between variables explaining value creation. Data were collected from 2007 to 2011 for Brazilian RE firms. To measure market risk, the authors used a new approach to deal with low liquidity. VAIC and I j ratios were used as IC proxies even though both have limitations. Findings – IC has a significant inverse relationship with market value. The more valuable companies showed lower levels of IC except for CEE which explains value as much as ROIC. Also, IC does not influence market risk caused by size and leverage and does not explain ROIC. Research limitations/implications – The limitations of this study result from time and proxy variables. IC was measured by a VAIC model using data from a period of intense volatility. To increase the robustness of the conclusions, other variables should be used as proxies for IC and the results compared. The VAIC model has certain deficiencies in measuring IC. Practical implications – Managers and investors in the RE sector need to change the way they create value and measure value creation. The low level of HC explaining either ROIC or market value is a signal of low innovation which, combined with high CEE, induces a short-term outlook. Originality/value – This study opens discussion of IC in the Brazilian RE sector. A new methodology for identifying value creation is necessary for better evaluation and determining the fair value of firms.

scholarly journals The Impact of Intellectual Capital on Firm Performance of the Turkish Real Estate Companies Before and After the Crisis

2018 ◽  
Vol 14 (1) ◽  
pp. 29 ◽  
Author(s):  
Sedeaq Nassar
Keyword(s):  
Firm Performance ◽  
Real Estate ◽  
Intellectual Capital ◽  
Value Creation ◽  
Positive Impact ◽  
Value Added ◽  
Significant Relation ◽  
Capital Efficiency ◽  
The Impact ◽  
Positive Significant Relation

Purpose- The main purpose of this study is to find the impact of intellectual capital on firm performance of real estate companies listed in Borsa Istanbul, using data of 27 listed companies over the period 2004-2015. Value Added Intellectual Coefficient (VAIC) method is utilized as a measure of intellectual capital (IC). Methodology- An OLS regression is used to examine the impact of intellectual capital (VAIC); Human capital efficiency (HCE), Structural capital efficiency (SCE), and Capital employed efficiency (CEE) on market, productivity, and financial performance. Findings- The findings show that SCE consider as a key role of value creation in real estate companies where has a positive significant relation with MB, ROE, and EPS before the crisis and with ROA and ROE after the crisis. HCE show a positive significant relation with ROA and ROE before the crisis and a negative significant association with MBand ATO after the crisis. CEE show a negative significant impact on ATO after the crisis. VAIC shows a significant positive impact on ROA, ROE, and EPS before the crisis, while it has the same relation with ROE after the crisis. Conclusion- Although the good result of using intellectual capital for value creation, real estate Turkish companies still weakly depend on its intellectual capital.

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