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Occupational futures? Divesting real estate and corporate PFI

Pottinger, G., Dixon, T. and Marston, A. (2002) Occupational futures? Divesting real estate and corporate PFI. Property Management, 20 (1). pp. 31-48. ISSN 0263-7472

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To link to this item DOI: 10.1108/02637470210418951

Abstract/Summary

Property ownership can tie up large amounts of capital and management energy that business could employ more productively elsewhere. Competitive pressures, accounting changes and increasingly sophisticated occupier requirements are building demand for new and innovative ways to satisfy corporate occupation needs. The investment climate is also changing. Falling interest rates and falling inflation can be expected to undermine returns from the traditional FRI lease. In future, investment returns will be more dependent on active and innovative management geared to the needs of occupiers on whom income depends. Occupier and investor interests, therefore, look set to coincide, but unlocking the potential for both parties will depend on developing new finance and investment vehicles that align their respective needs. In the UK, examples include PFI in the public sector and off-balance sheet financing in the private sector. In the USA, “synthetic lease” structures have also become popular. Growing investment market experience in assessing risks and returns suggests scope for further innovative arrangements in the corporate sector. But how can such arrangements be structured? What are the risks, drivers and barriers?

Item Type:Article
Refereed:Yes
Divisions:Faculty of Science > School of the Built Environment > Construction Management and Engineering > Transition Pathways to a Low-Carbon Economy
ID Code:31624
Publisher:Emerald

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