Property investor behaviour: qualitative analysis of a very large transaction

We study property investment decision-making from a behavioural perspective on the very micro level. We do this by analysing an extraordinary large real estate transaction that took place in the Swedish property market 2008. In an open-bid transaction the properties of the corporation Vasakronan AB was sold for SEK 41.1 billion (equal to some EUR 4.4 billion). By applying a qualitative empirical approach we are able to obtain a deep understanding of the processes of data-collection, property and market analysis, securing of financing and investment decision-making that takes place within real estate companies as they produce a bid for the portfolio offered. Our investigation is a case study, but the scale and complexity of the transaction secure it contains all, or most, critical moments in a general property investment decision-making process. By so doing, we approach the investment property market in a way that is so far under-researched. Managers in both the purchasing company and the company with the second highest bid were interviewed. Interviews were carried out one person at a time. The interviewees were encouraged to speak freely most of the time, but we also supplied an interview guide with a number of themes as well as certain specific questions. The interviews are transcribed. The results, along with citations, are reported under headings that correspond to the main sub-processes of the investment decision-making. Detailed information about this remarkable transaction itself is revealed, but general insights are also gained about certain important market institutions rarely revealed by official records and reports from the players and authorities in the property market. Findings of the study are put in perspective by relating to normative property investment textbooks as well as earlier empirical surveys of investment behaviour in the property market.