Measuring economic performance of Real Estate Developers in Australia: (A Longitudinal Study)

Gabrielle Parle; Michelle Joubert; Gregory Laing

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Measuring economic performance of Real Estate Developers in Australia: (A Longitudinal Study)

Journal article

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Measuring economic performance of Real Estate Developers in Australia: (A Longitudinal Study)

Gabrielle Parle, Michelle Joubert and Gregory Laing

Journal of New Business Ideas and Trends, Vol.15(1), pp.43-52

2017

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Abstract

Banking, Finance and Investment

Commercial Services

economic value added

real estate

property development firms

Purpose: This paper examines the economic performance of real estate property developers listed on the Australian Stock Exchange using the performance measure construct derived from the economic value added (EVA) model. Design/methodology/approach: Data was obtained from database sources for the purpose of calculating the EVA of the major property developers in Australia for the years 2005 to 2014. The research was concerned with calculating the economic profit of each firm to determine the extent to which real estate assets (investment property portfolio) contribute to covering their cost of capital (shareholder wealth). Findings: The results indicate that most property companies did not generate sufficient annual profit to cover their cost of capital. This finding was consistent with prior research which also found. Research limitations/implications: This study did not test for differences in returns due to diversity of real estate portfolio investments or the nature of risk inherent in the different sectors. However, a further adjustment to the EVA model is recommended to allow for any revaluation of real estate embodied in the other comprehensive income section of the financial statements.

Details

Title: Measuring economic performance of Real Estate Developers in Australia: (A Longitudinal Study)
Authors: Gabrielle Parle (Author) - University of the Sunshine Coast - Faculty of Arts, Business and Law
Michelle Joubert (Author) - University of the Sunshine Coast - Faculty of Arts, Business and Law
Gregory Laing (Author) - University of the Sunshine Coast - Faculty of Arts, Business and Law
Publication details: Journal of New Business Ideas and Trends, Vol.15(1), pp.43-52
Publisher: Australian Business Education Research Association
Date published: 2017
ISSN: 1446-8719
Organisation Unit: School of Business and Creative Industries; University of the Sunshine Coast, Queensland; USC Business School - Legacy
Language: English
Record Identifier: 99451009502621
Output Type: Journal article

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