Julian Seger, Ao Li and Andreas Pfnuer
The purpose of this paper is to examine the influence of corporate real estate (CRE) holdings on firm performance. Unlike previous studies, the paper does not only consider the…
Abstract
Purpose
The purpose of this paper is to examine the influence of corporate real estate (CRE) holdings on firm performance. Unlike previous studies, the paper does not only consider the firms’ primary business segment but also their activities in different business fields. This is of particular interest because additional segments often have different requirements for the provision of space and thus for the ownership strategy, which could have led to a possible bias in previous studies. Furthermore, additional business areas are becoming more relevant through integrated solutions.
Design/methodology/approach
The study uses a balance sheet data set of companies in the six largest European economies for the period from 2000 to 2016. Germany serves as a suitable laboratory for deeper analyses. Holdings of 490 firms are regressed to the stock market performance using a two-stage approach. This procedure is repeated by considering additional business segments.
Findings
The analyses reveal that ownership reduces stock market performance. Additional business activities also appear to influence the relevance of ownership for firm performance.
Practical implications
The research shows that ownership is priced depending on its primary and additional business activities. First, this insight helps capital market players to choose the right investment strategy. Second, it provides CRE decision-makers with information on the optimal provision of real estate.
Originality/value
This is the first paper to examine the contribution of real estate ownership on firm performance in light of the fact that companies operate in more than one sector.
Details
Keywords
Andreas Pfnuer, Julian Seger and Rianne Appel-Meulenbroek
The purpose of this study is to explain the contribution of Corporate Real Estate Management (CREM) to corporate success and to substantiate it empirically. However, no…
Abstract
Purpose
The purpose of this study is to explain the contribution of Corporate Real Estate Management (CREM) to corporate success and to substantiate it empirically. However, no empirically tested holistic concept classifies and explains the different success contributions of CREM in their mechanisms of action and organisational levels.
Design/methodology/approach
This study develops a holistic two-dimensional model from existing literature to explain the relationship between CREM decisions and business success, and then tests it empirically using multidimensional data scaling from a telephone company survey (CATI) of 59 CREM managers sampled from the 200 largest German companies.
Findings
The created theoretical model holistically explains CREM success and existence as part of a non-property company, with specific performance drivers on specific organisational levels. The empirical data confirm that both dimensions of the model and, thus the measurement concept for modelling the CREM contribution to business success is robust across sectors and company/portfolio size in Germany.
Originality/value
The empirical confirmation of the conceptual model of CREM success provides novel support for the institutionalisation of the CREM function in companies and the holistic classification of different CREM research directions.
Details
Keywords
Julian Seger, Kristina Stoner and Andreas Pfnuer
The purpose of this study is to find out if corporate real estate ownership is priced into the capital market performance of non-property companies in the UK. This is of…
Abstract
Purpose
The purpose of this study is to find out if corporate real estate ownership is priced into the capital market performance of non-property companies in the UK. This is of particular interest because ownership still represents a significant weight on the balance sheets and is predominantly considered unfavourable due to its bulkiness and difficult revisability in the event of changes in space demand. This draws attention to the UK as one of the most important European economies that have been exposed to strong uncertainties and dynamics, for example, due to the withdrawal voting of the United Kingdom from the European Union (BREXIT).
Design/methodology/approach
A first look at the real estate assets reported in balance sheets provides insight into possible changes in ownership strategy. This serves as a basis for subdividing companies based on their real estate assets using a portfolio-based approach and that are then analysed using the Fama and French multi-factor model with regard to their influence on capital market returns.
Findings
In general, the share of real estate assets has fallen over the past 10 years, although coinciding with BREXIT voting, some industries such as manufacturing show a turnaround. At the same time, ownership is priced in as a factor on the capital market, which applies to a sample across industries, as well as to separately considered sectors in the manufacturing and service industries. The pricing also shows a counter-cyclical pattern.
Practical implications
Corporate real estate management should be aware of the negative influence of ownership, especially against the background of economic fluctuations. The reduction of ownership can reduce the associated cost of capital and increase company success.
Originality/value
Previous UK-related studies mostly refer to a period before the global economic crisis in 2008, and therefore, are too old to reflect a changed view on corporate real estate ownership because of new corporate environmental conditions, based on inaccurate proxies or mainly refer to the retail segment. This research gap is closed.
Details
Keywords
Andreas Pfnuer and Stefan Armonat
A great number of German companies are suffering an acute financial crisis. Financial optimisation of the substantial property holdings owned by German companies offers an…
Abstract
A great number of German companies are suffering an acute financial crisis. Financial optimisation of the substantial property holdings owned by German companies offers an opportunity to reduce costs and to free up capital. However, the demands on property for operational purposes create difficulties when optimisation is carried out exclusively for financial objectives. In this paper it will be shown, by means of an empirical investigation of real estate directors and financial managers of the leading German undertakings, that companies are failing to take the decisive step towards optimisation. The reason for this lies in inadequate internal preparations, manifested in the lack of a linkage between real estate strategy and corporate strategy. Property rights‐oriented analyses of real estate assets create new scope to refinance existing holdings, without sacrificing the important requirements of the units occupying them. This paper discusses the essential steps to a solution and explains the potentials that can be enhanced by a structured financial optimisation of property holdings.
Details
Keywords
Andreas Pfnuer, Christina Schaefer and Stefan Armonat
Regarding the immense real estate divestitures that have taken place over the last couple of years, some stakeholders have begun to wonder if these short‐term activities may…
Abstract
Regarding the immense real estate divestitures that have taken place over the last couple of years, some stakeholders have begun to wonder if these short‐term activities may affect the long‐term competitive advantage of a company. While it appears reasonable that property divestitures enhance the financial situation of a company from a so‐called owner perspective, there is no equivalent quantitative evaluation for the loss in space utilisation and flexibility from a user perspective. Consequently, real estate decision making is based upon an insufficient information basis and is dominated by the investment perspective. In order to better align corporate real estate and real estate investment functions better, this paper introduces a formal decision model which describes the situation of corporate real estate decision makers. They have to trade off entrepreneurial flexibility gained by real estate holdings against the financial opportunity cost of freeing up capital. Making use of a prototype decision situation, the paper demonstrates how the decision maker can improve the underlying information basis for property divestment decisions, using a real option approach. Hence, real estate decisions gain in two respects: they are more transparent and, more importantly, their design is more suitable if the company wants to employ real estate holdings to increase the overall value of the company.
Details
Keywords
Martin Christian Höcker, Yassien Bachtal, Kyra Voll and Andreas Pfnür
With the continuing transition to hybrid working models, companies are confronted with new challenges. Location- and time-flexible working offers employees considerable advantages…
Abstract
Purpose
With the continuing transition to hybrid working models, companies are confronted with new challenges. Location- and time-flexible working offers employees considerable advantages regarding work success and, in particular, personal well-being and health. The separate effects of remote work and work autonomy on the degree of perceived burnout have already been sufficiently investigated. The influence of hybrid work, the combination of remote and in-office work together with work autonomy, on perceived burnout has yet to be investigated. Against this background, the present study examines the impact of hybrid work on perceived burnout.
Design/methodology/approach
The empirical study uses data from N = 779 German office employees. Drawing on the conservation of resources theory, the data is evaluated using regression and mediation analysis.
Findings
The results indicate a negative impact of remote work and work autonomy on perceived burnout. In addition, the effect of remote work on perceived burnout is partially mediated by work autonomy. This shows that hybrid work overall has a burnout-reducing effect.
Practical implications
Considering the workforce’s health, the results suggest that organisations should focus on hybrid working. Thus, employees should continuously be allowed to work remotely. In addition, workflows and processes should be designed to provide employees work autonomy. If organisational constraints require office presence, then the results underline the need for stress-reducing adaptation of offices.
Originality/value
The study offers first empirical results on the combined impact of remote work and work autonomy on perceived burnout. Furthermore, it provides implications for designing hybrid working environments and orientation in the ongoing return to office debate.
Details
Keywords
The world of work is constantly changing. The COVID-19 pandemic has reinforced working from home, and there is an increasing demand for flexibility regarding the workplace. There…
Abstract
Purpose
The world of work is constantly changing. The COVID-19 pandemic has reinforced working from home, and there is an increasing demand for flexibility regarding the workplace. There is little empirical evidence on the mechanisms and factors that influence employee outcomes, such as productivity and turnover intention, at the workplace and at home. In addition, it is unclear whether the workplace characteristics that influence employee outcomes vary between different nations due to country-specific circumstances. The paper aims to address these two issues.
Design/methodology/approach
The research model applied in this study is based on the job demands-resources (JD-R) and environmental demands-resources models using German (n = 429) and USA (n = 507) survey samples. Partial least squares structural equation modelling is used to analyse the influence of workplace characteristics (isolation, family–work interference, equipment/facilities and skill variety) on employee outcomes (satisfaction, burnout, productivity and turnover intention). Additionally, a multi-group analysis is used to explore group differences in the factors influencing satisfaction, burnout, productivity and turnover intention between employees in Germany and the USA.
Findings
The results reveal that significant determinants of productivity and turnover intention include isolation, family–work interference, equipment/facilities and skill variety. Isolation and equipment/facilities are identified as the most important demands and resources of the home workplace. Some significant differences are found between Germany and the USA. The positive effect of isolation on burnout is significantly stronger in the USA than in Germany, whereas the positive effect of family–work inference on burnout is stronger in Germany than in the USA. The negative effects visible for the relations between burnout and satisfaction, and satisfaction and turnover intention are stronger in Germany than in the USA. The positive effect of burnout on turnover intention is stronger in the USA compared to Germany.
Originality/value
The study adds empirical evidence to the JD-R theory by analysing the influence of the home workplace characteristics on employee outcomes in different countries for the first time using a multi-group analysis. In addition, the study reveals new insights into the differences between the knowledge workforces in Germany and the USA by uncovering how key factors influence employee outcomes such as productivity and turnover intention, partially carried by varying length of experience in work from home between both of these countries. Insights from this study can support corporate real estate managers to make better decisions on the design of employees’ home workplaces and the integration of work from home into the company’s workspace concept.
Details
Keywords
Damir Janßen-Tapken and Andreas Pfnür
The purpose of this study is to find answers to the question whether a fully-integrated real estate (RE) solution within an Enterprise Resource Planning (ERP) landscape delivers a…
Abstract
Purpose
The purpose of this study is to find answers to the question whether a fully-integrated real estate (RE) solution within an Enterprise Resource Planning (ERP) landscape delivers a visible and measurable contribution to organizational efficiency in corporate real estate management (CREM), a field still dominated by specialized, but stand-alone software packages.
Design/methodology/approach
The authors set up a model of CREM with the enterprise resource planning (ERP) systems being the hinge between the RE strategies and organizational efficiency. The model was tested by a written questionnaire to respond on the benefit expectations on ERP benefits.
Findings
In many cases, the results show a negative gap between expectations and realized benefits. The authors identified benefit stars and dogs within the sample. Stars realizing high benefit ratios on average have more often chosen the form of a shared service center for their CREM department, have reengineered the business processes more intensively, had more often a legacy system as a predecessor of the SAP ERP, trained employees more intensively and showed a higher degree of customization of the RE module than the benefit dogs of the sample.
Practical implications
Newly formed CREM departments looking for optimal IT solutions find decision support regarding the best fit for their IT landscape. Already institutionalized CREM units running an ERP system will find concrete evidence for improvement.
Originality/value
This is the first study of benefits and critical success factors of ERP implementation and operation for modern CREM. It is the attempt to bridge the gap between business and IT, showing the enabler role of ERP systems for efficient business processes, satisfied corporate users and motivated employees.
Details
Keywords
Rianne Appel-Meulenbroek, Maria Clippard and Andreas Pfnür
This study aims at understanding academic practice in the field of physical office environment research and providing recommendations for further enhancement of the field. It…
Abstract
Purpose
This study aims at understanding academic practice in the field of physical office environment research and providing recommendations for further enhancement of the field. It shows which effects of the physical office environment on employee outcomes are studied by which disciplines, and which methodologies are used by whom and on which variables. Existing gaps in research that are confirmed by these analyses are discussed and “assigned” to obvious, best suited combinations of future multi-disciplinary research projects to call for studies that would help practice in better decision-making.
Design/methodology/approach
After a systematic search and selection of studies, an exploratory analysis of 134 empirical studies from 50 different journals (and other sources) was performed. The selected studies were entered into a database with information on the empirical parameters of the study, the methodology and author information. From this database, cross-tables were built and tested with Canonical Correspondence analyses.
Findings
Results of the analyses showed that each discipline has its preferred topics and methods of research. In general, questionnaires are preferred over hard data from physical and physiological recordings. Still many important gaps exist in fully clarifying workplace effectiveness. This paper suggests which disciplines would be capable of taking up which challenges in future studies through interdisciplinary cooperation to further advance the field and corporate real estate management/FM in practice.
Originality/value
The Correspondence analyses not only confirmed important gaps for future research but also identified which disciplines would be best suited to take up these challenges.
Details
Keywords
Andreas Pfnür and Stefan Armonat
The purpose of this paper is to apply a numerical simulation of stochastic processes to the problem of real estate investment appraisal.
Abstract
Purpose
The purpose of this paper is to apply a numerical simulation of stochastic processes to the problem of real estate investment appraisal.
Design/methodology/approach
These uncertain operating costs are integrated into an enhanced dynamic simulation. To model the dynamics in the uncertainty of the cost schedule, a range of different types of stochastic processes is used. The operating costs are classified by cost drivers and an appropriate stochastic process is determined for each of the derived cost clusters. To optimise the capital structure in this application, heuristic optimisation with genetic algorithms is used.
Findings
The application of the model to real world investment situations shows that linear and deterministic modelling underestimates the risk‐generating effect of uncertain operating expenses, which often can lead to inefficient investment decisions.
Practical implications
In a further application of the model, the authors demonstrate the effect of uncertain operating costs on the optimal capital structure of real estate investments.
Originality/value
In contrast to models in the literature that are usually focussed on the income side, here the focus is on the uncertain dynamics of real estate operating costs as a key factor affecting return.