Shareholder composition, share turnover, and returns in volatile markets: The case of international REITs

Brounen, Dirk; Kok, Nils; Ling, David C.

doi:10.1016/j.jimonfin.2012.05.015

Cited by 12 publications

(2 citation statements)

References 35 publications

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“…Prima et al (2013) argued that the interrelatedness between the sponsors and managers might rise, as sponsors are able to influence management decisions to acquire the interested real estate assets at the expense of minority unit holders, thereby exacerbating the conflicts of interest (Pica, 2011). According to Brounen et al (2012), REITs in the USA are governed by the Internal Revenue Code, which stipulates the requirements for companies to be qualified as REITs for tax purposes. It restricts the largest shareholders from owning more than 50 per cent of outstanding REIT shares.…”

Section: Theoretical Background and Hypotheses Developmentmentioning

confidence: 99%

Corporate governance and performance of REITs

Ramachandran

Chen

Subramanian

et al. 2018

MAJ

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Purpose This study aims to investigate the relationship between corporate governance (CG) and performance of Real Estate Investment Trust (REITs) in Singapore and Malaysia. Design/methodology/approach The CG attributes that contribute best toward R-Index scores are tested followed by analysis of whether R-Index scores contribute toward better performance of the REITs when controlled for growth, firm size and leverage. Regression analysis using structured equation modeling (SEM) is instituted. Findings All attributes in the R-Index except management ownership are significantly correlated to R-Index. Regression analysis using SEM reveals that all the three measures of performance are significant. When controlled for growth and firm size, CG mechanisms reduce the impact of losses. However, highly levered firms could be risky for investors despite strong CG mechanisms. Research limitations/implications All S-REITs and M-REIT sampled were grouped as one regardless of the country differences, which may have limited the results and findings. The R-Index used to score the CG practices for Asia is still very new. Practical implications Findings of the study will help REIT policymakers to update scorecards frequently. Loss-making REITs must emphasize on specific CG attributes to enhance their overall CG scores to gain market confidence and procure financial assistance through better disclosure. Originality/value Due to research scarcity on CG effectiveness associated with performance of Asian REITs after the global financial crisis, this study comes as a timely contribution in understanding the relationship between CG and performance of REITs.

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Section: Theoretical Background and Hypotheses Developmentmentioning

confidence: 99%

Corporate governance and performance of REITs

Ramachandran

Chen

Subramanian

et al. 2018

MAJ

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“…Over the past three decades, the growing diversity of listed real estate markets around the world has provided investors with the opportunity to increase their exposure to commercial real estate without the burden of acquiring, managing and disposing of direct property investments and promoting cross-border investment in commercial real estate assets (Ling and Naranjo, 2002;Brounen et al, 2012;Giacomini et al, 2015). Indeed, recent years have witnessed a significant escalation in the volume of capital flows into listed real estate markets by institutional investors seeking exposure to "tangible" assets whilst simultaneously benefiting from the liquidity and regulated market structure.…”

Section: Introductionmentioning

confidence: 99%

Impact of firm-level attributes on listed real estate company performance

Haran

McCord

et al. 2020

JPIF

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PurposeThe purpose of this paper is to test the extent to which company-specific attributes including market capitalisation, capital structure and investment focus impact upon the performance of European listed real estate companies. Enhanced understanding of firm-level performance drivers is important for investors in order to diversify their investment portfolios and to mitigate company-specific risks at different points in the real estate cycle.Design/methodology/approachThe study centres on six key listed European real estate markets selected on the basis of market capitalisation, diversity, transparency and maturity. A series of statistical tests are undertaken using EPRA and Bloomberg data for the period of 2007–2017 using 113 listed property companies, all of whom were contemporaneous constituents of EPRA indices in this period. A series of customised performance indices were constructed to evaluate firm-level performance attributes.FindingsFirm-level attributes collectively account for more variation of risk-adjusted return than sector-level attributes over the investigation period. The impact of firm-specific attributes on performance varies significantly from country to country attributable to the contrasting cyclical property market trends in the pre– and post–Global Financial Crisis period. REITs outperformed non-REITs on a risk-adjusted basis attributed to the strong performance of “niche” market entrants allied with stronger regulatory structure. Finally, the findings showcase that sector specialist firms outperform diversified companies inferring that investors should seek to attain diversification through portfolio-based approaches rather than firm-level strategies.Practical implicationsThe results have implications for real estate companies aiming to raise capital internally for growth as higher return on equity in general signals reduced cost of capital. Secondly, the findings should be of practical use to multinationals specialising in international real estate trading in designing their business plans in general and formulating cross-country investment strategies in particular. Last but not least, a more refined conceptualisation of corporate-level performance drivers should complement existing professional practices in relation to business/company appraisal.Originality/valueThe research integrates EPRA and Bloomberg data sets to create a series of bespoke index constructs to measure the impact of firm-specific attributes on European listed real estate companies. Additionally, the authors construct a Herfindahl Index (H.I.) to further the debate on the impacts of diversification within the listed real estate sector. This serves to further heighten investor understanding of investment allocation and portfolio optimisation strategies for the listed real estate sector given the increasingly diverse range of investment opportunities within emerging sub-markets.

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Besonderheiten von Immobilienunternehmen und REITs

Kühnberger

2017

Kapitalmarktorientierte Rechnungslegung

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Shareholder composition, share turnover, and returns in volatile markets: The case of international REITs

Cited by 12 publications

References 35 publications

Corporate governance and performance of REITs

Corporate governance and performance of REITs

Impact of firm-level attributes on listed real estate company performance

Besonderheiten von Immobilienunternehmen und REITs

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