Technical, Allocative and Scale Efficiencies of REITs:  An Empirical Inquiry

Topuz, John C.; Darrat, Ali F.; Shelor, Roger M.

doi:10.1111/j.0306-686x.2005.00653.x

Cited by 35 publications

(34 citation statements)

References 25 publications

(36 reference statements)

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“…In summary, both tests show that there is no impact of geographical diversification on efficiency level. This confirms findings of Topuz et al (2005) as well as Ro and Ziobrowski (2011).…”

Section: Efficiency Score Based On Geographical Diversificationsupporting

confidence: 91%

The Efficiency Analysis of Singapore Real Estate Investment Trusts

Chiang¹,

Tsaih²,

Hsiao³

2016

EJBM

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Since the REIT industry is relatively new in Singapore, the objective of this research is to examine the operation efficiency among firms in the industry through the method of Data Envelopment Analysis (DEA). In addition, the method of Tobit regression is applied to investigate the impact factors on efficiency. The results are as follows. First, none of 14 firms analyzed performs relatively efficiently based on the average efficiency scores over the sample periods of 2007 to first quarter of 2015. Nevertheless, it is found that First REIT and Suntec REIT are the most efficient and least efficient REITs respectively. Second, ROA is positively correlated to efficiency scores while the negative relationship is found with the debt ratio. Third, regarding property-type, retail REITSs perform better than commercial ones on average. However, the most efficient group is "others" which consists of one hospitality/residential REITs, one healthcare REITs, and three industrial REITs. Fourth, geographical diversification may not affect REIT's efficiency. Meanwhile, REITs holding more properties overseas perform better than their counterparts on average. Last, in regards to size, small-size REITs significantly perform better in efficiency than those in other categories. Especially, medium-size and largesize REITs do not have significant differences on average in efficiency.

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“…In summary, both tests show that there is no impact of geographical diversification on efficiency level. This confirms findings of Topuz et al (2005) as well as Ro and Ziobrowski (2011).…”

Section: Efficiency Score Based On Geographical Diversificationsupporting

confidence: 91%

The Efficiency Analysis of Singapore Real Estate Investment Trusts

Chiang¹,

Tsaih²,

Hsiao³

2016

EJBM

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“…Although the models differ by a significant margin, it does seem that in general the efficiencies are somewhat in a similar value ballpark. Topuz et al (2005) for R.E.I.T. companies estimated the efficiencies varying from 35 to 9% depending on the years chosen; by applying the D.A.E.…”

Section: Resultsmentioning

confidence: 99%

“…Miller, Clauretie, and Springer (2006) used proxies of interest expenses divided by total debt (average cost of debt) and average other expenses divided by assets (average prices of other inputs). Another proxy used by Topuz, Darrat, and Shelor (2005) was property operating expenses divided by assets, which showed how much property expenses were needed for R.E. investments.…”

Section: Data and Econometric Methodologymentioning

confidence: 99%

A Comparative Analysis of R.E.I.T.s, R.E.O.C.s and P.R.E.O.C.s Using a Stochastic Frontier Approach

Grybauskas

Pilinkienė

2019

Economic Research-Ekonomska Istraživanja

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Although the first real estate investment trust (R.E.I.T.) was created in 1960s, according to the latest data of 2018, only 13 out of 28 European countries had such systems on their stock-exchange. Many economists have published detailed studies stating the advantages of R.E.I.T.s, however, the developing part of Europe is still slow to react with legislative initiatives. This article extends the existing research on R.E.I.T. efficiencies and compares them to private real estate operating companies (P.R.E.O.C.s) as well as real estate operating companies (R.E.O.C.s) across the U.S., Canada and the European Union by using a stochastic frontier, panel-data models of translog cost functions while trying to identify whether a significant benefit arises from different corporate structures. The results confirm that out of 666 companies under consideration, all types of real estate (R.E.) firms achieve economies of scale. Furthermore, in the time period of 2014-2016, REITs on average were less reliant on short-term debt, they had a lower debt-toequity ratio, were more efficient at managing costs in three stochastic translog models and partially in fourth, had a stronger economy of scale effect when their assets size increased, and remained competitively profitable though were outperformed in the profit and revenue area.

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“…they found that efficiency of China's real estate industry is largely affected by the macroeconomic factors. By applying DEA approach, Topuz et al (2005) empirically examined the u.S. REITs' operating efficiency. They found that REITs suffer substantial average inefficiency over the period (1989)(1990)(1991)(1992)(1993)(1994)(1995)(1996)(1997)(1998)(1999).…”

Section: Literature Reviewmentioning

confidence: 99%

How Efficient Are Real Estate and Construction Companies in Iran's Close Economy?

Wong

Gholipour

Bazrafshan

2012

International Journal of Strategic Property Management

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This paper empirically explores various efficiency aspects of real estate and construction companies in Iran in light of their remarkable growth in recent years. the technique used to measure the efficiency is DEA and the sample is taken from the construction and real estate companies in Iran. results from our analysis reveal that most of the real estate and construction companies in Iran are generally technical, scale and mix efficient. However, they are less cost efficient due to increasing higher cost of production. The sensitivity analysis results also suggest that the real estate and construction companies are experiencing diseconomies of scale. as Iran is an underdeveloped market and is currently one of the most interesting frontier markets in the world, this research contributes substantially to investors and multinationals (who have growing desire to gain exposure in this market) by providing current information about the efficiencies of real estate and construction companies in Iran. In addition, this research also provides some institutional voids on how to penetrate market environment in Iran through real estate development.

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Technical, Allocative and Scale Efficiencies of REITs:  An Empirical Inquiry

Cited by 35 publications

References 25 publications

The Efficiency Analysis of Singapore Real Estate Investment Trusts

The Efficiency Analysis of Singapore Real Estate Investment Trusts

A Comparative Analysis of R.E.I.T.s, R.E.O.C.s and P.R.E.O.C.s Using a Stochastic Frontier Approach

How Efficient Are Real Estate and Construction Companies in Iran's Close Economy?

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Technical, Allocative and Scale Efficiencies of REITs: An Empirical Inquiry

Cited by 35 publications

References 25 publications

The Efficiency Analysis of Singapore Real Estate Investment Trusts

The Efficiency Analysis of Singapore Real Estate Investment Trusts

A Comparative Analysis of R.E.I.T.s, R.E.O.C.s and P.R.E.O.C.s Using a Stochastic Frontier Approach

How Efficient Are Real Estate and Construction Companies in Iran's Close Economy?

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Technical, Allocative and Scale Efficiencies of REITs:  An Empirical Inquiry