Real Estate-Related Decisions in European Cities

A considerable part of the European property portfolio is owned by municipalities. In a market economy this raises several important questions, for instance whether the real estate management in public administrations is as efficient and effective as in private institutions. We address this question by looking at one important detail: the ways decisions are made in European cities. Surely this aspect cannot fully answer the question, but it can deliver meaningful hints for further research and for improvements in practice.The first part of our paper contains a review of the literature on decision theory and public real estate management from which we derive a number of current issues in municipal real estate decision making. In the next chapter we analyze the literature on the real estate portfolios of selected European cities which leads to a classification of public properties. Since the data is scarce and not much research has been done in this field we take an in-depth look at three best-practice cities to find out about the decision making processes in practice. For each city we describe the current situation (Example: 'How many properties are managed by how many employees?'), the strategy (Example: 'Is 'creating public value' a strategic objective?'), the organization (Example: 'Is the real estate management centralized?'), and the decision making process (Example: 'When do employees deviate from the defined decision making processes?'). We conclude our paper with a summary of the findings from the case studies and some suggestions for other cities how to improve real estate management by improving the decision making processes and instruments.