Real Estate Assets and Company Value: Why a Strategic Approach to Real Estate Is Crucial for Every Business

A company's value is shaped by many factors, from business performance and growth potential to its ownership structure. Yet there is one area that business leaders and owners often treat less strategically: the company's real estate holdings.

Yet real estate owned by a company can have a significant impact on its value, particularly in situations such as a company sale, capital raising or generational succession.

In Issue 129 (Summer) of Concorde MB Partners' Cégérték magazine, our Managing Director, Dorottya Papai, MRICS, discussed this topic in the interview entitled "How to Avoid Burning Hundreds of Millions in the Final Stages of a Company Sale."

Real estate is more than a balance-sheet item

A company's real estate holdings are often built up over many years. For founders and owners, property may serve as an operating location, a long-term investment or even one of the company's most significant assets.

However, when an important owner-level decision arises - such as a company sale or capital raising - the role of real estate can suddenly become much more prominent.

At that point, the question is no longer simply how much the property itself is worth, but also how it fits into the value of the business as a whole and the objectives of the transaction.

This is why a real estate strategy should be viewed not as a stand-alone asset consideration, but as a strategic factor influencing shareholder value.

What happens before a company sale?

Selling a business is typically the result of a lengthy preparation process. Owners naturally aim to achieve the best possible value.

Real estate holdings, however, can raise specific questions during this process.

For example, if a company owns property of significant value, the ownership and operating structure of that property can influence how potential investors or buyers perceive the business.

For this reason, the status and structure of the company's real estate holdings should not be examined only at the very end of the transaction process.

A well-considered real estate strategy can begin long before a company is put up for sale.

Asset management also plays an important role in preparation

One of the key responsibilities of professional asset management is to ensure that real estate holdings are not treated as passive assets, but are continuously assessed for their potential and their role in creating value.

A well-planned real estate strategy can help owners develop a clear picture, in good time, of:

• which properties belong to the company,
• what role those properties play in the operation of the business,
• how they contribute to shareholder value,
• and what opportunities exist for managing those assets ahead of a future transaction.

This can be particularly important when owners are focusing not only on the company's day-to-day operations, but also on its long-term value and a future transaction.

It matters beyond company sales

The importance of a real estate strategy is not limited to the sale of a business.

Capital raising or generational succession can raise the same important questions: what real estate assets are connected to the business, how they are managed, and what role they play in shareholder value.

Generational succession, for example, involves more than handing over the management of a business. In many cases it also affects family wealth, including real estate. This makes it particularly important for owners to think ahead and make deliberate decisions about the future of those assets.

The key question: when should we start addressing it?

Before a company sale or generational succession, it may already be more difficult to make decisions that require significant time and careful planning.

That is why real estate holdings should be considered at a strategic level well in advance.

The objective is not necessarily to sell, retain or restructure a company's real estate holdings in every case. What matters is that there is a deliberate decision about the role these assets should play in the future of the business and its owners.

Real estate assets are part of shareholder value

For businesses, real estate can be much more than simply the physical space required for operations.

With the right strategy and professional asset management, it can become an asset that helps maximise shareholder value and can also play an important role in preparing for a significant transaction.

From the perspective of REMAX GO Commercial, real estate holdings should therefore not be managed in isolation from the operation of the business. The right real estate strategy can form part of the long-term thinking that supports the successful preparation of a company sale, capital raising or generational succession.

Because when we make decisions about the future of a business, we need to assess not only the company itself, but also the assets behind it.

We would like to thank the Concorde MB Partners team for the opportunity!

The full interview is available in Issue 129 (Summer) of Cégérték magazine.