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Retention rates, re-investment and depreciation in European office markets

Baum, A. and Turner, N., (2003) Retention rates, re-investment and depreciation in European office markets. Working Papers in Real Estate & Planning. 02/03. Working Paper. University of Reading, Reading. pp19.

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The retention rate of a company has an impact on its earnings and dividend growth. Lease structures and performance measurement practice force real estate investment managers to adopt full distribution policies. Does this lead to lower income growth in real estate? This paper examines several European office markets across which the effective retention rates vary. It then compares depreciation rates across these markets. It is concluded that there is evidence of a relationship between retention and depreciation. Those markets with particularly inflexible lease structures exhibit low retention rates and higher levels of rental value depreciation. This poses interesting questions concerning the appropriate way to measure property performance across markets exhibiting significantly different retention rates and also raises important issues for global investors.

Item Type:Report (Working Paper)
Divisions:Henley Business School > Real Estate and Planning
ID Code:21310
Publisher:University of Reading
Publisher Statement:The copyright of each working paper remains with the author. If you wish to quote from or cite any paper please contact the appropriate author; in some cases a more recent version of the paper may have been published elsewhere.


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