Introduction

Real estate strategy as characterised by the English-speaking countries is based on buying an item of property and selling it for maximum profit within a short investment horizon of between five and ten years. This philosophy demands a cash flow approach and segmentation or optimisation of operation and inventory. However, this practice of a short investment horizon also led to the adoption of similar criteria by the banks: in order to make the most realistic and timely assessment of opportunities and risks, reporting and controlling came into use in addition to cash flow and value-based business ratios, or so-called covenants.

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