Property Asset Management Case Study Example | Topics and Well Written Essays - 2500 words

Property Asset focussing - Case Study ExampleIts choice of spot of the retail outlets go away most likely make up ones mind the strategic reparation of its w argonhouses so that logistical support of fast and cheap sales pitch expenses is maximized. The choice of location of w arehouses is therefore crucial and is heavily dependent on their projection of where the retail outlets are to be situated.It seems that leaseholds are long-term and for 30 years. On the other hand their strategy to expand and locate retail outlets are yet to be tested and any error in their choice result mean that they assume to pre-terminate their leaseholds, if they go on leasing, or assign them. The existing leases are FRI eccentric persons which mean that Dell has the annual gist of maintaining the facilities, repair and cover them with insurance. scarcely it saves them to raise the capital cost to set up the facility. In a leasehold Dell does not need to raise the initial cost of constructing t he facilities. On the other hand in a freehold Dell will have to raise the required coarse funding at the lead up of the project. In a Leasehold the company does not end up owning the facility and thereby benefit from it increases in value. In freehold they benefit from the gain on the sale of the property at values that are high than the acquisition cost. The impact on the net income in terms of leasehold costs as against depreciation will be minimal. Leasehold rates include financial charges of lessor, whereas in freehold that is funded by debt the company will incur financial charges as interest and depreciation expense that is over the life of the asset. In both freehold and leasehold with FRI Dell will incur the same cost of annual maintenance and repair, and cost of capital. In Dells decision to acquire as freehold warehouse facilities and retail outlets chains has an impact on capital investments. There are two types of properties that they need, to wit warehouse facilit y, and retail outlets. In either case they will also need transport delivery system, between the plant and the warehouse, and from warehouse hubs to the retail outlets. Capital asset investment. Definitely, the freehold strategy will require huge long-term funds. The location and number of square meters will determine the acquisition price of each type of facility. In the case of warehouse facilities their location will likely be outside commercial centers whitethorn not be as expensive in terms of property values compared to retail outlets which are to be located in commercial centers where property values are higher. Also, the retail outlet and location of property will likely increase in value over the years compared to warehouse locations. In terms of the size or field of operations required the warehouse facilities could be larger on the middling compared to warehouse outlets. Their current cost of acquiring could be the same with the outlets of higher price per floor area bu t less area, while the warehouse is with a lower price but larger area. But when the total areas of warehouses and retail outlets are compared the investment on each type that is needed to acquire them could be significant. We do not know which one will be more expensive when the aggregates