Analysis of real estate management of lease service agreements by the public sector of a Latin American metropolis São Paulo

• Published in: Journal of financial management of property and construction Vol. 24; no. 1; pp. 97 - 122
• Main Authors: Velho Júnior, Vágner Egídio, Costa Melo, Isotilia, Alves Junior, Paulo Nocera, Rebelatto, Daisy Aparecida do Nascimento
• Format: Journal Article
• Language: English
• Published: Bingley Emerald Group Publishing Limited 01-04-2019
• Subjects: Access to information; Developing countries; Document management; Education; LDCs; Leases; Leasing; Mayors; Municipalities; Property management; Public administration; Public companies; Public services; Real estate; Mexico; Malaysia; United States > US; China
• ISSN: 1366-4387; 1759-8443
• DOI: 10.1108/JFMPC-06-2018-0031

PurposeThe purpose of this paper is to characterize real estate lease management of the São Paulo City Municipality (PMSP), the largest metropolitan region in Latin America, for the provision of public education, health and social assistance services.Design/methodology/approachIn addition, the management was also evaluated by a direct analysis of the obtained data (lease paid, area of the property, agency, zone, region, neighborhood, contract date, etc.) and by statistical regressions.FindingsThe results showed that the following: real estate properties with the greatest discrepancy of amounts paid (when compared to other amounts paid by the city and the market) are in a pulverized category, called “Others”; PMSP faces difficulties tracking expiration dates, 18.9% of the assets are still in use, though present expired contracts; the category “Education” is the most expressive in expenses; there is a limit to the correlation between the size of the real estate and the lease price paid, and very large real estate do not have proportionally higher leases; the location only directly affects the lease value if it is in the central region of the Metropolis. There is no explicit relationship for leases in other regions.Originality/valueThis work is groundbreaking for helping to consolidate the literature on real estate management in developing countries. Factors that integrate and influence the management of real estate leases for government agencies in a Latin American metropolitan area have never before been reported in the literature.