Conversion aversion? The Euro and the property manager

Examines the implications of European Monetary Union (EMU) for property managers of operational and investment property portfolios. In the first section, the background to the introduction of a single currency is reviewed and the proposed timetable and method of introducing the Euro is discussed. The next section analyses the property management areas which may be affected by EMU. It is argued that the costs and benefits of the introduction of the Euro will be unequally distributed. Key factors will include the pattern of property interests and liabilities in potential member countries. A key variable will be the rate at which the existing currency is converted to the Euro. This will be a determinant of the future value of assets and liabilities and will, therefore, impact on corporate costs, profitability and competitiveness. The degree to which a firm benefits from the elimination of exchange rate uncertainty and transaction costs will depend on its financial structure. Firms which meet liabilities in non‐sterling currencies from revenues raised in such currencies will not benefit to a great extent. The paper argues that the legal implications for continuity of contract will be minimal for property managers. It is suggested that the need to amend information systems and records will be the major cost to many organisations.