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Sustainability 2018, 10(9), 3203;

A Generalised Model of Ground Lease Pricing

Faculty of Financing and Banking, WSB University in Poznan, ul. Powstańców Wielkopolskich 5, 61-895 Poznań, Poland
Department of Operations Research, Poznań University of Economics and Business, Al. Niepodległości 10, 61-875 Poznań, Poland
Department of Construction Management and Real Estate, Vilnius Gediminas Technical University, Sauletekio al. 11, LT-10223 Vilnius, Lithuania
Department of Microeconomics, Poznań University of Economics and Business, Al. Niepodległości 10, 61-875 Poznań, Poland
Author to whom correspondence should be addressed.
Received: 2 August 2018 / Revised: 4 September 2018 / Accepted: 4 September 2018 / Published: 7 September 2018
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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In this paper, we present a generalization of Mandell’s model for the estimation of ground lease pricing. We adjust the model so that it fits, in particular, the Polish legal regulations and situation of the Polish real estate market. The model involves two aspects. The first is the perpetual usufruct, a form of owning the ground similar to a long-term lease, but having some specific features. The second is allowing lease rent adjustments after some fixed period, meaning we consider the situation where the payments are fixed during certain periods as defined in the contract. The proposed model determines the minimum lease amount for the owner, which is the rate at which it is beneficial to lease the property, and the maximum for the lessee, which is the amount above which the lease is unprofitable for the leaseholder or perpetual usufruct. View Full-Text
Keywords: ground lease; ground rent; perpetual usufruct ground lease; ground rent; perpetual usufruct
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

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Trojanek, M.; Anholcer, M.; Banaitis, A.; Trojanek, R. A Generalised Model of Ground Lease Pricing. Sustainability 2018, 10, 3203.

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