Lease versus buy decision for corporate real estate in the UK

Abstract

PurposeThe purpose of this paper is to present evidence on the significance of the strategic determinants of the lease versus buy (LVB) decision for corporate real estate (CRE) in the UK.Design/methodology/approachThis paper takes an empirical approach using logistic regression technique to explore company and site characteristics for LVB decision for CRE based on a survey involving 2,248 UK firms.FindingsThe results show significance for locational characteristics, size of operations, and physical attributes of the real estate; company size, however, was less significant than supposed, while company preferences came through strongly; sectoral differences were negligible.Research limitations/implicationsThe dataset used in this study is based on a 1998 survey of 2,248 property occupiers in the UK. Although the sample size is large, the LVB decision was only a part of the survey.Practical implicationsThis paper demonstrates the necessity for a wider framework to fully analyze the LVB decision for CRE, which not only includes finance, but also corporate strategy, locational analysis, and real estate economics.Originality/valueThis paper makes an empirical contribution to the field of CRE research by presenting evidence on the significance of the strategic determinants of the LVB decision for CRE in the UK.