Does the absence of share deals distort commercial real estate indicators?
Journal of European Real Estate Research
ISSN: 1753-9269
Article publication date: 7 September 2023
Issue publication date: 11 October 2023
Abstract
Purpose
Commercial real estate (CRE) indicators typically include asset deals and exclude share deals. This study aims to explore the phenomenon of real estate share deals and assess whether omitting these transactions results in indicators that do not accurately reflect the market.
Design/methodology/approach
Various registers in the Netherlands were used to estimate transaction volumes, total values and price developments of both share and asset deals. Share deals are company transfers and its transactions cover more than real estate. To estimate the contribution of real estate in share deals, valuations were used.
Findings
In the Netherlands, share deals are most prominent for rental dwellings. Adding share deals to volume and value indicators seems required. In price development estimates, significant differences were found for dwellings between share and asset deals. Price indices should, therefore, also include share deals, but in practice this is difficult and has little impact on the outcomes due to the low weight of share deals.
Research limitations/implications
Legislation has a major impact on choosing a share or asset deal. The significance of share deals is expected to vary amongst countries. Performing similar research in other countries will contribute in harmonising real estate indicators.
Practical implications
Statistical agencies face many challenges in the construction of CRE indicators. This study provides statisticians knowledge that can be used to evaluate possible data gaps.
Originality/value
This is the first study to estimate indicators of real estate share deals and compare these to asset deal indicators.
Keywords
Acknowledgements
The authors wish to thank Eurostat for funding parts of the research regarding share deals. The authors are also grateful to the following experts who provided their view on real estate share deals and the commercial real estate market: Tom Berkhout, Bernd Veldman (Tax Authorities), Ronald Gordijn (CBRE), Peter van Gool (ASRE), Rene Spit, Jos Verburg (PelsRijcken), Luca van Silfhout and Jérôme Germann (Loyens & Loeff). The authors also express their appreciation to the following experts who provided assistance on interpreting the data: Rico Konen, Lico Hoekema, Jos Erkens, Leon Custers, Barry Coenen (CBS), Naphtalien Martina (Tax Authorities) and Matthieu Zuidema (Land Registry Office). Furthermore, the authors would like to thank Kees Hagemans (CBS) for performing analyses on the data. Last but not least, the authors are grateful to Peter Boelhouwer (TU Delft) who provided feedback during the entire study.
Citation
Ishaak, F., van Schie, R., de Haan, J. and Remøy, H. (2023), "Does the absence of share deals distort commercial real estate indicators?", Journal of European Real Estate Research, Vol. 16 No. 2, pp. 220-237. https://doi.org/10.1108/JERER-04-2022-0011
Publisher
:Emerald Publishing Limited
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