inflation
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In the construction-development sector, bubble formation can be stimulated by various factors, but I want to highlight two key systemic factors here: 1. The bullwhip effect, and 2. Specific dynamics of supply and demand. The Bullwhip Effect This phenomenon is called the bullwhip effect because a small change at the start of the price chain…
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When leasing real estate through long-term contracts, there are two interesting practices that private investors often overlook: indexed and revenue-linked rent. Indexed Rent Indexed contracts provide a hedge against inflation risk. Since the purchasing power of any currency tends to fluctuate, inflation protection becomes particularly important in long-term leases. It is common to link rent…
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High inflation erodes the value of an organization because passing inflationary pressure onto customers is challenging and often not initiated – managers often do not realize the impact of inflation on value and do not try to raise prices adequately. The chart shows three scenarios for cash flow generation, assuming the organization does not experience…
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