Alignment of Corporate Real Estate and Business Strategy in a disrupted market: hold and manage or sell?

Further to the 2008 financial crisis, many financial institutions throughout Europe have experienced turbulence. Post 2008 economic developments varied widely across European countries. Some markets returned to growth while distressed economies continued to affect property markets especially across Central Eastern Europe. One of the main outcomes of the crisis consisted of banking institutions holding property assets as a result of defaults. Such property is expensive to hold and brings increased liabilities, particularly in a distressed property market, however shifting economic trends offer difficult decision making options.Business strategies adopted prior to the credit crunch did not necessarily include a specific Corporate Real Estate dimension, however this situation had to be adjusted in accordance with political and financial regulations set by the European Union and the European Central Bank. This has led to financial institutions having to develop Corporate Real Estate strategies of either having to dispose of build assets at unacceptable discounts or holding and managing those assets in the interests of their investors.The research aims to investigate the issues surrounding the decision-making process on disposing of or holding onto their ÒunwantedÒ property assets with specific reference to particular case studies from Central Eastern European property and financial markets. Specific findings highlight the importance of adopting a specific strategy to align Corporate Real Estate decisions with the current business strategy and the most important factors affecting the decision-making process.