Joseph T. L. Ooi

Facilities management: a “Jack of all trades”?

Despite its rapid development in the last decade, facilities management (FM) stills suffers from an identity crisis as the definition and scope of FM remains a contentious issue. To this end, three fundamental issues are re‐examined in this paper: what FM constitutes; what a facility manager is; and how the FM profession can be enhanced. These issues remain critical as they represent the building blocks of the FM discipline. Without a common platform, the development of FM is likely to be fragmented. An evaluation of the definitions of FM provided in the past suggests that the focus of FM is clearly on the workplace. The key issues confronting FM are the location, type, quantity, quality, content and allocation of the workspace. A professional facilities manager is one who is formally trained and whose main responsibility is the strategic management of the workplace. Three factors are suggested to be important for the development of FM as a professional discipline. They include a clear role and scope of FM in the industry and firm, contribution to the bottom‐line of the firm, and development of specialist knowledge and toolbox for addressing the problems of strategic workplace management. Some potential areas for theoretical developments have been suggested in this paper.

The determinants of capital structure Evidence on UK property companies

Employing the panel data methodology, we examine the capital structure determinants of 83 property companies quoted in the UK. The empirical test reveals how the debt‐equity structure of the companies is influenced by the various firm‐specific attributes and macro‐economic factors. In particular, the evidence shows that asset structure, business orientation, and the level of involvement in property development are significant determinants of the corporate debt policy of property companies. Financial distress consideration also has a significant influence. In addition, the empirical evidence shows that corporate property managers take into consideration the prevailing market sentiment and borrowing costs when making the debt‐equity choice. Corporate performance and tax burden, however, do not appear to have any significant effect on the capital structure decision of property companies.

The magnetism of suburban shopping centers: do size and Cineplex matter?

Purpose – This paper aims to address two questions related to the magnetism or drawing power of suburban malls: first, does physical size matter, and second, what is the externalities effect of housing a Cineplex within a shopping center?Design/methodology/approach – The study was carried out through an extensive survey covering 1,283 shoppers in nine selected suburban shopping centers in Singapore. The effects of physical size and the presence of Cineplex on the magnetism on the selected suburban shopping centers are evaluated using analysis of variance (ANOVA) tests. Their effect on shopping duration and expenditure pattern is also empirically tested using a recursive simultaneous equations model.Findings – The survey results affirm that both physical size and the presence of a Cineplex enhance the magnetism of suburban shopping centers. A larger shopping center can facilitate a greater variety of shops and create a more pleasant environment for the shoppers, thus enticing shoppers to visit and stay lon...

Managerial opportunism and the capital structure decisions of property companies

The focus of this paper is on the problem of managerial opportunism in the corporate governance of UK quoted property companies. Agency conflicts exist between firm managers and owners because of the separation of ownership from management. Consequently, managers pursue activities that enhance their interests rather than that of the shareholders’. The empirical investigation of this paper is divided into two sections. The first part examines the ownership structure of 83 UK quoted property companies between 1989 and 1995, revealing that close to a quarter of the common shares issued by the companies are held by the managers. The gap between ownership and management appears to increase with firm size, risk and growth rate but decrease with corporate performance. In the second section, logit modeling is employed to examine 110 security issues of the companies during the study period. The evidence shows that ownership structure has an influence on the debt‐equity choice of property companies. Consistent with the findings of previous studies, the study also reveals that the capital structure choice is dictated to a large extent by company size, issue size, and condition of the security market. The empirical analysis also suggests that property companies make their financing decisions as though they have a target capital structure in mind.

Price Formation Under Small Numbers Competition: Evidence from Land Auctions in Singapore

This article examines the price formation process under small numbers competition using data from Singapore land auctions. The theory predicts that bid prices are less than the zero-profit asset value in these first-price sealed-bid auctions. The model also shows that expected sales price increases with the number of bidders both because each bidder has an incentive to offer a higher price and because of a greater likelihood that a high-value bidder is present. The empirical estimates are consistent with auction theory and show that the standard land attributes are reflected in auction prices as expected.

The Wealth Effects of Property Acquisitions: Evidence from Japanese and Singaporean REITs

This article examines the wealth effects of 228 property acquisition announcements made by REITs publicly traded in Singapore and Japan, which are the two largest REIT markets in Asia. Adopting an aggressive growth‐by‐acquisition strategy, the newly listed REITs acquired a number of properties within a short time period. Despite their regular activities, we observe the acquisition announcements are associated with a significantly positive abnormal increase in shareholder wealth averaging 0.38% in a 5‐day window around the event date. Controlling for the method of payment, buyers acquisition strategy and sellers relationship with the acquiring REIT, the regression results show that the likely sources of economic gains associated with acquisitions are economies of scale and better management by acquiring firms. We also find strong evidence that the market reacts less favorably to acquisitions involving a portfolio of properties as opposed to a single property and weaker evidence that it reacts less favorably to mixed‐use acquisitions. These findings suggest the presence of premiums on transparency and corporate focus.

The debt maturity structure of UK property companies

This paper investigates the corporate debt maturity structure of property companies quoted in the UK over the period 1989-95. The empirical results show that there is scope for property firms to signal to the market their true worth using their debt maturity decisions. In particular, the evidence shows that property companies with potential good news employ more short-term debt in their capital structure, which is consistent with the signalling hypothesis. The study also reveals that firms which are large, enjoy high returns, or are more focused on property trading employ more long-term debt in their capital structure. The evidence is also consistent with the conventional notion that property companies match their debt maturity to the life of the assets. The matching practice, however, is not done primarily on the basis of minimizing the agency costs of long-term debt. The empirical results are also consistent with the traditional notion that managers time their long-term debt issues based on the prevailing real estate market condition and their expectation of future interest rate movements. The evidence weakly suggests that property companies defer their long-term debt issues when interest rates are predicted to fall in the near future. Interest rate volatility, however, do not appear to have any significant influence on the debt maturity policy of property companies.

Cross‐market dynamics in property stock markets

Purpose – Aims to investigate the long‐run and short‐term relationships among four Asian property stock markets of Japan, Hong Kong, Singapore and Malaysia; and four European property stock markets of UK, France, Germany and Italy. Additionally, aims to examine the relationships between equally‐weighted Asian and European regional property stock indices.Design/methodology/approach – The long‐term analysis is undertaken using Johansen multivariate cointegration approach. The degree of short‐term dependence is investigated with an extended EGARCH model for evidence of mean and volatility spillovers across the property stock markets.Findings – The combined findings of minimal cointegration, weak mean transmission and lack of significant evidence of cross‐volatility spillovers among the Asian and European property stock markets imply that investors would benefit from diversifying property stock portfolios internationally in Asia and Europe in the short‐ and long‐run.Originality/value – This study contributes ...

The impact of information transparency and market capitalisation on out-performance in Asian property companies

Abstract With an increased emphasis on international property investment and an improved economic outlook for Asia, Asian property companies potentially provide an important property investment opportunity for international property fund managers. Using an information transparency index, 180 property companies in 10 Asian countries are assessed over 1997-2003 for their levels of information transparency. Whilst information transparency is seen to be important, market capitalisation is seen to be more significantly associated with Asian property company out-performance. Investing more in the larger property companies than the smaller property companies in Asia is seen to be a more effective property investment strategy for international property fund managers over this period.

Can Bank Lines of Credit Protect Reits Against a Credit Crisis

In a tight credit market, the primary concern of most real estate investment trusts (REITs) is the ability to access capital and maintain adequate liquidity. Bank lines of credit or loan commitments, which are legally binding contracts arranged to provide debt at the call of the borrowers under prespecified terms, have been theorized to provide insurance protection against a credit crisis. This article examines whether bank lines of credit can indeed provide some insurance for REITs and allow them to access credit during bad times. Covering three credit crunch events, both the origination and utilization patterns of commitment loans by 275 REITs publicly traded between 1992 and 2007 are analyzed. We find that bank lines of credit insulated REITs from credit rationing at both the broad market level as well as at the firm level. However, the insurance value is qualified in the case of smaller and risky firms which may not get to extend their credit limit or draw down on their existing credit lines in a credit crisis.