Corporate real estate management : a Maltese listed entity perspective

Abstract

Purpose: Little is known about CRE in Maltese institutions and how this can support core business. The main purpose of the study is to determine what approach MLEs take in managing the property used to support primary business activities and to shed light on this seemingly new strategic approach. In fact, the first objective considers the status and role of CREM in MLEs. The second objective delves into the various financial matters that should be taken into consideration. The third objective focuses on strategy creation and implementation as well as the value added through strategic management. Finally, the fourth objective determines whether the effectiveness of CREM is evaluated through performance measurement. Design: The study follows a qualitative approach for which 7 semi-structured interviews with top and middle management of MLEs were carried out. Data was analysed through an iterative process of constant comparison and analysis of interview responses, online data as well as listed entity's FS. Findings: The results provided evidence that within MLEs, specialised CREM structures and delegated authority are absent, as all decisions are taken by the BoD. MLEs tend to favour owning rather than leasing property, but financial implications of CRE decisions are not explicitly considered. It was also revealed that MLEs do not formalise a CRES, even though considerable focus is indirectly placed on marketing and sustainability strategies. Furthermore, it was found that MLEs fail to use property performance measures. Conclusion: It was concluded that CREM is not formally being applied in the Maltese context, even though CRE is perceived as a critical strategic resource. This may indicate that MLEs fall short of capitalising on the potential of their CRE assets to increase shareholder value. Value: The study contributes to the limited literature on CREM within the Maltese context. It provides an assessment of the situation in Malta in comparison with foreign literature. It is anticipated that this study will shed light on this new strategic management approach to managing property assets.