Purpose – To analyse the effect of corporate real estate ownership on the stock performance of firms active in the international retail sector. Design/methodology/approach – A sample of 454 retail companies is separated into three geographical regions and six different sub-sectors. We measure the corporate real estate holdings using balance sheets information and link these to the risk and return characteristics of the individual firms. Findings – We find that corporate real estate ownership varies greatly across subsectors. This variation is explained by differences in location and customisation demands of real estate. Retailers for which the micro-location of real estate is a critical value driver tend to own more of it. In general, corporate real estate ownership for retail companies is associated with a strong relative performance, which contrasts markedly with the negative performance effects found for other industrial sectors. Research limitations/implications – Although we include as many firms as possible in our sample, we are still confronted with sample size limitations while performing sub sample comparisons. Practical implications – Our results show how owning real estate instead of renting it will impact the long run profitability of retailers. Originality/value – Where most of the extending literature focuses on sketching the impact of real estate ownership using theory and isolated cases, we no offer numerical proof based on a international dataset.

doi.org/10.1108/14630010510651061, hdl.handle.net/1765/94006
Journal of Corporate Real Estate

Brounen, D., Colliander, G. (Gustaf), & Eichholtz, P. (2005). Corporate real estate and stock performance in the international retail sector. Journal of Corporate Real Estate, 7(4), 287–299. doi:10.1108/14630010510651061