How a buyer values your shares, and why it is less than your buildings are worth

What the buyer actually buys

In a share deal, the buyer does not buy buildings. It buys a company: its buildings, but also its debts, its accounting and tax history, and the commitments it has made. The price of the shares reflects the value of that whole, not of the buildings alone.

That is why the value of the shares and the value of the buildings are two different figures. It is normal that they differ, and the gap can be explained line by line.

The method: adjusted net asset value

For a real estate company, the reference method is adjusted net asset value. It starts from the balance sheet and corrects it to reflect economic reality:

• Market value of the buildings+
• Cash, investments and receivables+
• Bank debt and other liabilities−
• Current accounts owed to the shareholder−
• Latent tax, in full or in part−
• Buyer's margin (risk, financing, time)−
• Price of the shares=

Every line is open to discussion. But three of them account for most of the gap with the value of the buildings: the debts, which are obvious, the latent tax, which is much less so, and the buyer's margin, which weighs most when it intends to resell the properties.

A simple example: if the company holds 10 million euros of buildings and 6 million euros of loans, the starting value of the shares is already down to 4 million euros, before any other adjustment.

The latent tax: the line the seller does not see

In the company's accounts, the buildings are carried at their acquisition cost, less depreciation. Buildings are depreciated, land is not. After fifteen or twenty years, a building's book value is often far below its market value.

The difference between the two is a latent capital gain, held inside the company. It is not taxed as long as the company keeps its buildings. But on the day it sells them, the company pays corporate income tax on that gain.

In a share deal, that tax does not disappear: it stays in the company, and the buyer inherits it. So the buyer takes it into account in the price, in full or in part depending on what it intends to do with the buildings. This is not an arbitrary discount, but the recognition of a future liability that the seller passes on.

Latent tax and margin: it all depends on the buyer's plan

The share of the latent tax taken into account in the price, and the size of the margin, depend above all on what the buyer intends to do with the buildings.

The buyer who resells. In the current market, many buyers no longer acquire a company to keep its buildings for the long term, but to do the arbitrage work themselves: reselling the properties over time, one by one or in batches. For them, the latent gain will indeed be realised, and the tax will be paid. They therefore deduct the latent tax in full. On top of that, they take a margin on the operation: it rewards their work, their risk and the capital they tie up, and it is the very reason they buy.

The buyer who holds. A buyer taking over the company to keep the buildings for a long time does not pay that tax straight away, since nothing is sold. But it feels the effect from the first year. When the buildings are fully or largely depreciated, as is common after many years of ownership, they can no longer be depreciated, or much less so. The company thus loses a deductible expense that, year after year, would have reduced its taxable profit, and pays more corporate tax on its rents, where a building that can still be depreciated would provide a tax saving every year.

For a buyer who holds, the share of the latent tax deducted from the price is negotiated, and depends on the size of the portfolio and above all on its nature: let residential buildings justify a larger deduction, because they are more often sold on later, in whole or in part, which brings forward the moment the gain is realised. Retail units and offices leave the company far less often, and the deduction can then be more limited.

Typology therefore plays twice: it determines which buyers are interested in your portfolio, and, for a buyer who holds, the share of the latent tax it takes into account. The size of the portfolio matters too: it determines who can buy it, and what the buyer intends to do with it.

This explains the sometimes large gap between the value of the buildings and the price offered. Knowing which kind of buyer you are dealing with, before discussing price, changes the conversation.

The other adjustments

Beyond the latent tax, several items move the price:

• Bank debt is taken over with the company and reduces the price by the same amount. Any costs linked to repaying or refinancing the loan are negotiated as well.
• Current accounts: an amount the company owes the shareholder is deducted from the price, since it is a debt of the company. The effect is neutral for the seller, however: what is taken off the share price is repaid to them by the company. Conversely, an amount the shareholder owes the company is either repaid before the transfer or deducted from the price in exchange for a novation by change of debtor: the company, as creditor, agrees to release the seller and to substitute the buyer as debtor, which extinguishes the seller's obligation and creates a new one on the buyer's side. Here too the effect is neutral for the seller: they receive less for their shares, but are released from their debt.
• Cash and investments are added to the price, in principle close to euro for euro.
• The condition of the properties: deferred works, planning irregularities or soil pollution weigh on the value of the buildings, or are covered by a warranty in the share transfer agreement.
• The quality of the lettings: rent levels, lease terms, tenant strength and vacancy determine the value the buyer assigns to each building.
• The company's past: in taking over the shares, the buyer also takes over the company's entire history, risks included: disputes with tenants, tax audits covering past years, hidden defects. That risk is paid for through a lower price, a liability guarantee, or both. What the liability guarantee covers.
• Structure costs: a company costs money every year (accounting, filing of the annual accounts, insurance, corporate administration), which erodes the return on the buildings. A buyer who plans to fold the company into its own group through a merger bears these costs until the merger, which takes time and itself generates significant costs.

Sale value and tax value: two different things

Since 1 January 2026, the gain on a sale of shares can be taxed, but in principle only the gain built up after 31 December 2025 is caught. The value of your shares on that date becomes your tax base.

That tax value is not determined with the buyer's method. For unlisted shares, failing a transaction or a put option, the law applies a flat formula (equity plus four times EBITDA) which, for a real estate company, often gives a value well below reality, and therefore a higher taxable gain. You can replace it with a valuation established by a company auditor or a certified independent accountant, no later than 31 December 2027. The regime is explained in detail here.

What the seller can do

• Know the order of magnitude of the latent gain on the buildings, before any discussion.
• Have a recent, well-argued market estimate for each property.
• Lay out the debts and current accounts clearly, so that no line surprises the buyer.
• Know which kind of buyer you are dealing with: one who resells deducts the full latent tax and takes a margin, one who holds may deduct less. Putting buyers with different plans in competition makes the difference.