Make a call: assessing capital calls velocity for closed end Asia Pacific non-listed real estate funds

2020 ◽  
Vol 38 (6) ◽  
pp. 617-625
Author(s):  
Arvydas Jadevicius
Keyword(s):  
Standard Deviation ◽  
Real Estate ◽  
Design Methodology ◽  
Value Added ◽  
Data Interpretation ◽  
Asia Pacific ◽  
Content Type ◽  
Investment Programme ◽  
Practical Implications

PurposeThe study examines Asia Pacific (APAC) non-listed non-core real estate funds' capital calls (investor equity drawdowns) sequence for varying vehicle strategies.Design/methodology/approachAnalysis starts with a cursory data interpretation that extracts a typical investors' equity drawdowns schedule. Thousands of simulations are then computed for each vehicle strategy for each year to further interpretation.FindingsData and methodological limitations notwithstanding, overall estimates suggest that funds exhibit a contrasting capital calls sequence. As a group, APAC non-core non-listed real estate funds call circa 76.3% of investors' committed capital during the first four years of the fund life. Single sector, single country and value added vehicles have a greater capital calls velocity compared to their multi sector, multi country and opportunity peers. However, the two fund groups exhibit a notable standard deviation heterogeneity of drawdowns.Practical implicationsInvestors should therefore budget accordingly when choosing either of vehicle strategies to invest in.Originality/valueThe study adds additional evidence on the topic of capital calls velocity. Results should assist LPs with their non-listed APAC real estate funds investment programme further.

Real estate portfolios – the case for globally diversified core property funds

2019 ◽  
Vol 38 (1) ◽  
pp. 82-86
Author(s):  
Arvydas Jadevicius
Keyword(s):  
Real Estate ◽  
Design Methodology ◽  
Asia Pacific ◽  
Portfolio Risk ◽  
Ceteris Paribus ◽  
Content Type ◽  
Monte Carlo Simulation Technique ◽  
Risk Return ◽  
Core Property ◽  
Practical Implications

Purpose The purpose of this paper is to build a case for globally diversified core real estate funds portfolio. Design/methodology/approach It uses Monte Carlo simulation technique to construct synthetic real estate funds portfolios. Findings Benefit of maintaining globally diversified real estate funds portfolio merits admission. An optimal portfolio has an almost even split between Europe, USA and Asia Pacific, ceteris paribus. Likewise, currency effect for Europe domiciled investors is undeniable. Practical implications The overall estimates suggest that a blend of APAC, European and US allocations enhance portfolio risk return profile. Originality/value The study adds additional evidence on the contested issue of real estate diversification.

The role of investment property appraisal in European real estate companies

2020 ◽  
Vol 13 (1) ◽  
pp. 105-122
Author(s):  
Juha Mäki
Keyword(s):  
European Union ◽  
Real Estate ◽  
Design Methodology ◽  
Annual Reports ◽  
Real Estate Industry ◽  
Publicly Traded ◽  
Content Type ◽  
The Real Estate ◽  
Practical Implications

Purpose This paper aims to examine the connection between appraisals of investment properties and earnings properties in companies from two perspectives: what kinds of companies employ the most reputable appraisers and how appraisers produce estimations. Design/methodology/approach The research uses annual reports of European Union (EU) publicly traded real estate companies and examines the period 2007-2016. Findings The contribution of this study lies in establishing that some indicators and features of real estate companies affect the choice of appraiser and also in illustrating differences in the results of property valuations. In short, smaller companies with weaker performance are less willing to use external valuation, and external appraisers produce more conservative estimations for investment properties. Practical implications The research produces beneficial information for investors and other stakeholders interested in the real estate industry. Originality/value This is the first novel study to examine the link between appraisals of investment properties and earnings properties in companies in detail.

What goes up and what goes down

2017 ◽  
Vol 33 (8) ◽  
pp. 7-9
Keyword(s):  
Real Estate ◽  
Case Studies ◽  
Design Methodology ◽  
Reading Time ◽  
Cutting Edge ◽  
General Motors ◽  
Content Type ◽  
The Usa ◽  
Pertinent Information ◽  
Practical Implications

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings For many young managers and strategists, few of them will realize just how mighty Japan and its firms were in the 1990s. As the world’s second biggest economy, it saw many of its firms lead their industries in both size and innovation – Toyota and Sony being just two examples – so that they genuinely threatened to overtake the USA and its preeminence. Indeed, when Toyota finally overtook General Motors as the world’s biggest car manufacturer, the effect was felt through Detroit and beyond. Further stories about the similar rise in the price of Tokyo real estate became legendary as well – for example that the well-heeled district of Ginza in central Tokyo was worth more than the whole of California. Practical Implications The paper provides strategic insights and practical thinking that have influenced some of the world’s leading organizations. Originality/value The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Valuation paradigm: a rationality and (un)certainty spectrum

2017 ◽  
Vol 35 (2) ◽  
pp. 228-239 ◽  
Author(s):  
David Jansen van Vuuren
Keyword(s):  
Real Estate ◽  
Design Methodology ◽  
Confidence Score ◽  
Valuation Theory ◽  
Practical Application ◽  
End User ◽  
Risk And Uncertainty ◽  
Content Type ◽  
Secondary Purpose ◽  
Practical Implications

Purpose The purpose of this paper is threefold: the primary purpose is to suggest a real estate paradigm spectrum to act as reference for the contextualisation of observed market phenomenon in system terms; the secondary purpose is for the spectrum to contextualise the efficacy of real estate and valuation theory, methods and techniques; and the tertiary purpose is to propose a confidence score for reporting uncertainty to the end user of a valuation report. Design/methodology/approach Literature was reviewed on the concepts of risk and uncertainty, rationality and several systems thinking domains. Findings The framework can provide context to observed market phenomenon and distinguishes between agency and mechanism in contributing to conditions of certainty and uncertainty. The argument followed in this paper is that it is necessary to contextualise the efficacy of real estate and valuation theory, methods and models under conditions of certainty, normal uncertainty and abnormal uncertainty. The characteristics of conditions can be used as basis to develop new theory and practical application or modify existing. Practical implications Real estate economic theory can be organised in terms of the spectrum and the framework can potentially identify where further research is required and the requirements it must meet as measured against the characteristics of the framework. Current valuation methods and models can continue to be used when valuing under conditions of certainty, however, modifications to methods and models are required to account for complexity when valuing under conditions of normal uncertainty and abnormal uncertainty. The confidence score included in this paper can also be used to report the conditions of certainty/uncertainty under which the valuation was performed. Originality/value This paper aims to set the basis for new theoretical and practical developments of insights into real estate economic and valuation theory, methods and models while also contributing to the reporting of uncertainty through the proposed confidence score.

scholarly journals Measuring customer satisfaction: a study of the Swedish real estate industry

2016 ◽  
Vol 34 (4) ◽  
pp. 316-331 ◽  
Author(s):  
Peter Palm
Keyword(s):  
Real Estate ◽  
Design Methodology ◽  
Commercial Real Estate ◽  
Signal Quality ◽  
Organisational Development ◽  
Real Estate Industry ◽  
Content Type ◽  
Real Estate Sector ◽  
Customer Evaluations ◽  
Practical Implications

Purpose – The purpose of this paper is to identify the strategies of formal customer evaluations and the use of satisfied customer index in the Swedish commercial real estate industry. Design/methodology/approach – This research is based on an inventory of 24 commercial real estate companies use of formal customer evaluations and an analysis of 15 interviews with top-level managers in the Swedish commercial real estate sector. Findings – Only half of the companies included in the study conduct formal evaluations, although they are considered to work customer oriented. Two different strategies for using formal evaluations is, for improvement work and for signalling quality. One proposed explanation to why only half of the companies conduct formal evaluations is the possibility that the official Swedish Real Estate Barometer is not sufficient if the company would like to use the result for organisational development. There are instead indications that this barometer mainly is used in publicity and marketing purpose, to signal quality. Research limitations/implications – The research in this paper is limited to Swedish commercial real estate sector. But, the overall strategies for conducting formal evaluations should be applicable in general. Practical implications – The insight the paper provides regarding how the industry perceive the Swedish Real Estate Barometer gives direct implications of improvements of the barometer. Originality/value – It provides an insight regarding the use of formal customer evaluations and a proposition of how the Swedish Real Estate Barometer could be changed to better support and fulfil the aim of being a barometer for benchmarking.

Managing talent development effectively

2016 ◽  
Vol 24 (3) ◽  
pp. 26-28
Author(s):  
Graham Cole
Keyword(s):  
Design Methodology ◽  
Reading Time ◽  
Talent Development ◽  
Value Added ◽  
Valuable Resource ◽  
Short Supply ◽  
Content Type ◽  
Competitive Edge ◽  
Pertinent Information ◽  
Practical Implications

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings It has almost become a cliché to state that the workforce is any company’s most importance asset. Organizations accordingly recognize the value added by highly skilled employees. Talent is perceived as being in short supply. This means that firms battle to entice individuals that will best help secure a competitive edge. Talent is a valuable resource that is widely considered unique and difficult to replicate. That much is unquestionable. Identification and development of talented employees is therefore often high on the agenda of businesses targeting sustained growth and prosperity. Practical implications The paper provides strategic insights and practical thinking that have influenced some of the world's leading organizations. Originality/value The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent, information and presenting it in a condensed and easy-to-digest format.

Improving US real estate returns with cost segregation

2019 ◽  
Vol 37 (4) ◽  
pp. 334-344
Author(s):  
Ivan C. Roten ◽  
Jarrod G. Johnston
Keyword(s):  
Real Estate ◽  
Design Methodology ◽  
Cash Flows ◽  
Content Type ◽  
Real Estate Investments ◽  
Accelerated Depreciation ◽  
Investor Returns ◽  
The Impact ◽  
Practical Implications

Purpose US taxing authorities allow property investment to be separated into components. The purpose of this paper is to demonstrate how the classification of property affects the amount and timing of depreciation. Increased and accelerated depreciation increases after-tax cash flows and investor returns. Design/methodology/approach This paper explains traditional methods to analyze real estate investments and introduces modified methods that include the effect of taxes to improve the estimate of the potential return to the investor. Commonly used property classification methods are evaluated and projections are used to demonstrate the impact on investor returns. Findings Modified methods may improve return estimates and appropriately classifying property improves investor returns. Practical implications After-tax cash flows should be used to analyze potential real estate investments and properties should be accurately classified to maximize returns. Originality/value This paper demonstrates how to analyze real estate investments and maximize returns.

Understanding organizational culture through the lens of corporate real estate strategies

2019 ◽  
Vol 35 (2) ◽  
pp. 19-21
Keyword(s):  
Organizational Culture ◽  
Real Estate ◽  
Design Methodology ◽  
Reading Time ◽  
Content Type ◽  
Corporate Real Estate ◽  
Pertinent Information ◽  
Real Estate Management ◽  
Corporate Real Estate Management ◽  
Practical Implications

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings This research paper concentrates on ways in which corporate real estate management and organizational culture inter-relate. Clan and adhocracy organizational culture companies prioritize investing in the employee’s experience of the workplace, as opposed to market and hierarchy organizational culture enterprises that maintain a stable procedural focus on reducing real estate costs. Originality/value The briefing saves busy executives, strategists and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Pitfall benchmarking of cleaning costs in hospitals

2019 ◽  
Vol 17 (3) ◽  
pp. 284-300 ◽  
Author(s):  
David Koch ◽  
Sabrina Eitzinger
Keyword(s):  
Real Estate ◽  
Design Methodology ◽  
Facility Management ◽  
Statistical Problem ◽  
Content Type ◽  
Aggregated Data ◽  
Great Caution ◽  
Operation Costs ◽  
Management Association ◽  
Practical Implications

Purpose It is typical of public real estate benchmarking reports to show only highly aggregated benchmarks based on buildings’ floor areas. They hardly provide disaggregated benchmarks for usage clusters. The aim of this study is to show the caveats from highly aggregated benchmarking without consideration of cluster-specific characteristics. Design/methodology/approach Based on the parameters of the German facility management association 812 standards, cleaning costs and costs for the surfaces of seven hospitals have been collected and allocated to specific room clusters. Using these basic data, a calculation and simulation conducted with the aim of simulating facilities that are comparable in the sum of costs yet feature varying sub-clusters as cost drivers. In particular, during this simulation, area ratios were varied randomly and the average cleaning costs per cluster were held constant for all hospitals. Therefore, the costs per square meter in the clusters of all simulated hospitals are identical and the full costs only depend on the area ratios. Findings The simulation shows that highly aggregated cleaning costs lead to large spans, and thus, to misinterpretations in the field of action. In the case, the aggregate benchmark ranges from 40.6 to 66.5 EUR/m², although, for all hospitals the same costs per square meter had been used. Thus, the bias results only from varying the share of area across the clusters. This finding is caused by a well-known statistical problem: the Simpson’s paradoxon, which currently receives little attention in real estate benchmarking. Practical implications The results show, that the regular benchmarking with high aggregated data, often used in practice, cannot be recommended. The author consider using a detailed benchmarking as meaningful and purposeful. To be able to make a detailed benchmarking, it is essential to identify and collect the influencing factors. Only if all important factors, in this case, the clusters will be regarded in the benchmarking, a reasonable benchmarking and useful interpretation can be given. Using a simple benchmarking to get a rough overview is refused steadfastly. Originality/value The study highlights that a comparison with public benchmarking reports (operation costs) must be taken with great caution. The author has quantified the bias from the aggregated benchmarking and have shown, that the Simpson’s paradox fully explains the consequences.

The use of 5-WHYs technique to eliminate OEE’s speed loss in a manufacturing firm

2015 ◽  
Vol 21 (4) ◽  
pp. 419-435 ◽  
Author(s):  
Samuel Jebaraj Benjamin ◽  
M. Srikamaladevi Marathamuthu ◽  
Uthiyakumar Murugaiah
Keyword(s):  
Lean Manufacturing ◽  
Design Methodology ◽  
Manufacturing Industry ◽  
Research Study ◽  
Value Added ◽  
Quality Loss ◽  
Manufacturing Firm ◽  
Content Type ◽  
Analysis Technique ◽  
Practical Implications

Purpose – The purpose of this paper is to reduce or eliminate the overall equipment effectiveness (OEE’s) speed loss in a lean manufacturing environment. Design/methodology/approach – This action research study uses the lean manufacturing 5-whys analysis technique to reduce or eliminate the speed loss. Findings – The application of the 5-whys analysis technique in a manufacturing industry (XYZ Corporation) completely eliminated its top speed loss and resulted in a valuable savings of USD 32,811.5 per annum. Practical implications – The 5-whys analysis technique which has been primarily known to improve the OEE’s quality loss and changeover loss has been proven to be an effective approach to also tackle speed loss; a loss which has been regarded as the most dominating loss among all the types of OEE’s losses and a difficult one to eliminate. Originality/value – Little or no attempt has been made to date to expand the use of the 5-whys analysis technique beyond its originally intended purpose. The lessons learnt in this study could be applied to other organizations. The outcome of the study has also opened the possibility of widening the horizon of the use of the 5-whys analysis technique beyond its original intended objective and could be applicable to solve other losses of OEE and non-value added activities of lean philosophy in general.

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