The role of investment property appraisal in European real estate companies. Issue 1 (7th February 2020)

• Record Type: Journal Article
• Authors: Mäki, Juha
• Is Part Of: Journal of European real estate research. Volume 13:Issue 1(2020)
• Page Start: 105
• Page End: 122
• Publication Date: 2020-02-07
• Subjects: IFRS -- Appraisal type -- Earnings properties; Real property -- Economic aspects -- Europe -- Periodicals; Commercial real estate -- Europe -- Periodicals; Housing -- Finance -- Periodicals; Housing -- Europe -- Periodicals; 333.5068
• DOI: 10.1108/JERER-11-2019-0038
• Languages: English
• ISSNs: 1753-9269

Abstract

Abstract : Purpose: This paper aims to examine the connection between appraisals of investment properties and earnings properties in companies from two perspectives: what kinds of companies employ the most reputable appraisers and how appraisers produce estimations. Design/methodology/approach: The research uses annual reports of European Union (EU) publicly traded real estate companies and examines the period 2007-2016. Findings: The contribution of this study lies in establishing that some indicators and features of real estate companies affect the choice of appraiser and also in illustrating differences in the results of property valuations. In short, smaller companies with weaker performance are less willing to use external valuation, and external appraisers produce more conservative estimations for investment properties. Practical implications: The research produces beneficial information for investors and other stakeholders interested in the real estate industry. Originality/value: This is the first novel study to examine the link between appraisals of investment properties and earnings properties in companies in detail.