This paper aims at investigating the impact of corporate real assets ownership on value creation for non-financial French listed companies. Using a pool sample composed of the SBF 250 companies, over the period 1999-2004, this paper investigates the association between surrogates of EVA and MVA generated by French listed companies and the weight of real estate in their assets' portfolio. Our empirical results show that, an increase in the proportion of real estate assets (over total assets) is negatively associated with EVA, but specifically for firms in the service industries exhibiting low real estate intensity. The regression on MVA shows a negative association with the change in the real estate for firms outside the service industries. Recent trend shows that many large companies have sold a significant part of their corporate real estate assets. The underlying motives for such behaviour are yet to be examined (at least in a French context). If real estate matters, one should observe an association between proxies of value creation and the change in the amount of real estate assets within a company. Those results suggest the sales of real estate assets can be driven by value maximizing behaviour. In order to maximize the value of their firm, Managers seem to integrate value creation in their choice to invest in, or to dispose real estate assets. The paper exhibits in a French context that CRE disposals may generate value added but in certain industries and with specific CRE intensity.
NAPPI-CHOULET, I., MISSONIER-PIERA, F. and CANCEL, F. (2007). EVA & MVA, the Impact of Real-Estate Assets: An Empirical Investigation with French Listed Companies.