<p>This dissertation aims to explore how an investment appraisal differs depending on if it is conducted by a municipal or a private real estate company. Municipal and private real estate companies are not performing on totally equal terms in the property market. A municipal company in Sweden has a public service mission. The consequence due to that mission is that they have limited yield potential but on the other hand the right to certain subsidies. They are also limited by the law of public purchasing (in Swedish: Lag om offentlig upphandling) in the investment process. A private real estate company comprehends under the Companies Act (in Swedish: aktiebolagslagen) which means that they are operated in a rent seeking purposes and because of the user cost method (in Swedish: bruksvärdesprincipen) they must take the rent into consideration for an equal apartment which is owned and operated by a municipal real estate company. This we believe will have implications in how they go on in an investment appraisal.</p><p>In an investment appraisal it is common to have a particular strategy or approach, also to use some sort of calculation to calculate the investments’ profitability and to set a return on the investment. An investment also means some kind of risk, especially in the real estate business as it often deals with large amounts. </p><p>We have in our dissertation done six case studies where we examined how the factors, which the theory says affects, affected respective respondent’s investment appraisal. From this we are able to explain how the investment appraisal differs between the two ownership forms.</p><p>We have, after empirical analysis, found that the investment appraisal differ depending on the ownership. The factors that proving this is strategy, risk, regulation and the cost of capital. The strategy is more adapted for each investment among the private real estate companies while the municipal real estate companies tend to implement the investment appraisal in a similar way each time. Risk consideration has been shown to be higher among the private real estate companies as they take the risk in consideration in several aspects and calculate a specific risk for each investment. Legislation affect the investment appraisal by the ownership form which determines what law will be applied. The cost of capital influence because private real estate companies generally have a higher rate.</p>
| Identifer | oai:union.ndltd.org:UPSALLA/oai:DiVA.org:hh-2826 |
| Date | January 2009 |
| Creators | Hall, Eric, Johansson, Patrick, Axelsson, Pär |
| Publisher | Halmstad University, School of Business and Engineering (SET), Halmstad University, School of Business and Engineering (SET), Halmstad University, School of Business and Engineering (SET), Högskolan i Halmstad/Sektionen för Ekonomi och Teknik (SET) |
| Source Sets | DiVA Archive at Upsalla University |
| Language | Swedish |
| Detected Language | English |
| Type | Student thesis, text |
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