Real estate corporations: the quest for value

Abstract

This paper examines the implications of the corporation’s quest for value and the adoption of a new economic performance metric on real estate corporate strategies. The economic profit of 19 Singapore property companies is computed. Overall, the results suggest that most property companies failed to generate enough periodic income to cover their cost of capital. Hence, the companies appear to be destroying rather than creating corporate wealth. The discussion also highlights some reasons why economic valude added (EVA) tends to understate the true economic performance of real estate, both as an investment and as a business unit.

Citation

Ooi, J.T.L. and Liow, K. (2002), "Real estate corporations: the quest for value", Journal of Property Investment & Finance, Vol. 20 No. 1, pp. 23-35. https://doi.org/10.1108/14635780210416246