ABSTRACT
This chapter will focus on the fi nancial side of Corporate Real Estate (CRE). The effect of ownership or leasing on the balance sheet will be discussed. In addition, the lifecycle effects of ownership will be looked at from the point of view of aspects such as renovation, restructuring or alternative use. The importance of regularly valuing CRE at market value will be highlighted, as well as the fi nancial risks of not valuing and not strategically managing CRE. CRE is not always easy to value: it might have specifi c characteristics, which will not have a market value, or only for similar enterprises and specifi c use. The value might also be infl uenced by industry trends or labour costs followed by shifts of the company’s activities to other locations or even other countries. Consequently, active CRE fi nancial management should be given high priority. Involvement of CREM in business plans and decisions is essential to fulfi l that role.
