Financing corporate real estate: the impact of corporate real estate in the shareholder value equation

This paper aims to bring together the principles of shareholder value added (SVA) and the impact of operational real estate on the corporate occupier's financial management. As an introductory piece, it sets out to bridge the gap in understanding that often exists, either in the corporate finance department about the mechanics of real estate finance, or in the corporate real estate profession about the impact on corporate finance of real estate ownership and funding decisions. From this paper the reader should gain a better understanding of the mechanistic links between delivering shareholder value and the options and potential decisions in respect of a corporate occupier's real estate ownership and funding strategy. This paper demonstrates the theory by considering a number of relevant transactions carried out by corporate occupiers with their operational real estate in the ultimate pursuit of increasing shareholder value. Copyright © 2003 Henry Stewart Publications