The Strategic Management of Open‐ended Property Funds

Abstract

German open‐ended property fund shows that a strategic management of property investment is indispensable. Suggests that it is possible and fruitful to adapt the instruments for strategic management used by industrial companies to fit the needs of property companies (such as the five‐forces model and the value chain developed by Porter, the strategic portfolio analysis developed by McKinsey, etc.). In the long‐term perspective of institutional investors, dynamic factors such as use, flexibility, productivity and competitive advantages play a much more important role. These thoughts have led to the need to build an operational model for the analysis and “strategic” valuation of property portfolios. This kind of portfolio approach emerges as an effective and flexible instrument for identifying and visualizing strategic development potentials and problem configurations within the assets of open‐ended property funds and other institutional investors.

An assessment of property investment vehicles with particular reference to German funds

“…Risk is acknowledged as a factor, but it is not quantified. These criticisms reflect earlier work by Bone-Winkel (1994), who considered that German property investments are characterised by a strong orientation to the property with management concentrating on short-term planning rather than a longer-term perspective.…”