Transaction costs of commercial real estate: a european comparison Ed Nozeman ERES 2010

Transaction costs Content Introduction Definition and typology The hypothesis Methodology Results Recommendations

Transaction costs Introduction Importance Sources or causes Preliminary questions

Transaction costs Definition All expenses involved in the process of transferring ownership rights Typology (Geltner a.o.) Transfer tax Agents’ fees Legal fees Information costs Investors’ perspective

Transaction costs The basic assumption The higher the level of transparency the lower the transaction costs

Transaction costs Methodology Only transfer tax, agents’ fees and legal fees Relative ratios One year data from C & W Adaptations because of variations Transparency data from JLL Crossings by regression analysis technique

Transaction costs

Number of observations 22 Multiple R 0,297827607 F-test 1,849365 Transaction costs Results : Transparency vs transfer tax Number of observations 22 Multiple R 0,297827607 F-test 1,849365

Number of observations 22 Multiple R: 0,430172275 F-test: 0,045682503 Transaction costs Results Transparency vs agents’ fee Number of observations 22 Multiple R: 0,430172275 F-test: 0,045682503

Transaction costs Results Transparency vs legal fee lNumber of observations 14; Multiple R 0,268143; Number of observations 14; Multiple R 0,268143 F-test: 0,375741389

Transaction costs Background of tax policy per country Recommendations for further research Background of tax policy per country Influencing power of lobby groups Registration fee and extent of efficiency