The relationship between REITs industry characteristics and project performance: The moderating role of macroeconomic fluctuations

As a distinct investment vehicle, Publicly Listed Real Estate Investment Trusts (REITs) projects enable real estate projects to be listed on the stock market. This study begins with the industry attributes of the underlying assets of Publicly Listed REITs projects. Using econometric methods, it anal...

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Main Author: CAI, Ying
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Language:English
Published: Institutional Knowledge at Singapore Management University 2023
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Online Access:https://ink.library.smu.edu.sg/etd_coll/564
https://ink.library.smu.edu.sg/context/etd_coll/article/1562/viewcontent/GPBA_AY2017_DBA_Cai_Ying.pdf
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spelling sg-smu-ink.etd_coll-15622024-06-19T05:58:34Z The relationship between REITs industry characteristics and project performance: The moderating role of macroeconomic fluctuations CAI, Ying As a distinct investment vehicle, Publicly Listed Real Estate Investment Trusts (REITs) projects enable real estate projects to be listed on the stock market. This study begins with the industry attributes of the underlying assets of Publicly Listed REITs projects. Using econometric methods, it analyzes the variances in market performance between growth and defensive REITs, based on annual data from 1,674 REITs products in the United States from 2005 to 2022 and 27 listed REITs in China from Q3 2021 to Q1 2023. The study also leverages the data from China to explore the moderating effects of macroeconomic factors such as interest rates, inflation, and stock market volatility on these relationships. In this research, the underlying assets of Publicly Listed REITs are categorized into growth and defensive types. Growth assets refer to investment targets with developmental potential, marked by high risk and high returns. In contrast, defensive assets imply investment in stable and reliable assets, usually backed by national policies and government subsidies. Empirical results indicate that growth REITs outperform defensive REITs regarding net profit and earnings per share but are associated with greater market volatility. Additionally, the study uncovers the negative moderating effect of interest rates on the profitability of growth REITs, suggesting their earning capacities might be constrained in high-interest-rate environments. In contrast, the impacts of inflation and stock market volatility on the performance of REITs are not significant. This research provides practical implications for investors on effectively allocating assets between growth and defensive REITs, emphasizing the importance of making investment choices based on individual risk preferences and market conditions. Simultaneously, it offers insights for policymakers on utilizing REITs as a financing channel for urbanization and infrastructure development. Despite its valuable insights, this study has limitations, including the constraints of data, not fully considering all factors that could affect the performance of REITs, and the limited sample period. Future research could expand in these areas to achieve a more comprehensive and deeper understanding of the REITs market. 2023-12-01T08:00:00Z text application/pdf https://ink.library.smu.edu.sg/etd_coll/564 https://ink.library.smu.edu.sg/context/etd_coll/article/1562/viewcontent/GPBA_AY2017_DBA_Cai_Ying.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Dissertations and Theses Collection (Open Access) eng Institutional Knowledge at Singapore Management University growth REITs defensive REITs macroeconomic fluctuations REITs project performance Finance Finance and Financial Management
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic growth REITs
defensive REITs
macroeconomic fluctuations
REITs project performance
Finance
Finance and Financial Management
spellingShingle growth REITs
defensive REITs
macroeconomic fluctuations
REITs project performance
Finance
Finance and Financial Management
CAI, Ying
The relationship between REITs industry characteristics and project performance: The moderating role of macroeconomic fluctuations
description As a distinct investment vehicle, Publicly Listed Real Estate Investment Trusts (REITs) projects enable real estate projects to be listed on the stock market. This study begins with the industry attributes of the underlying assets of Publicly Listed REITs projects. Using econometric methods, it analyzes the variances in market performance between growth and defensive REITs, based on annual data from 1,674 REITs products in the United States from 2005 to 2022 and 27 listed REITs in China from Q3 2021 to Q1 2023. The study also leverages the data from China to explore the moderating effects of macroeconomic factors such as interest rates, inflation, and stock market volatility on these relationships. In this research, the underlying assets of Publicly Listed REITs are categorized into growth and defensive types. Growth assets refer to investment targets with developmental potential, marked by high risk and high returns. In contrast, defensive assets imply investment in stable and reliable assets, usually backed by national policies and government subsidies. Empirical results indicate that growth REITs outperform defensive REITs regarding net profit and earnings per share but are associated with greater market volatility. Additionally, the study uncovers the negative moderating effect of interest rates on the profitability of growth REITs, suggesting their earning capacities might be constrained in high-interest-rate environments. In contrast, the impacts of inflation and stock market volatility on the performance of REITs are not significant. This research provides practical implications for investors on effectively allocating assets between growth and defensive REITs, emphasizing the importance of making investment choices based on individual risk preferences and market conditions. Simultaneously, it offers insights for policymakers on utilizing REITs as a financing channel for urbanization and infrastructure development. Despite its valuable insights, this study has limitations, including the constraints of data, not fully considering all factors that could affect the performance of REITs, and the limited sample period. Future research could expand in these areas to achieve a more comprehensive and deeper understanding of the REITs market.
format text
author CAI, Ying
author_facet CAI, Ying
author_sort CAI, Ying
title The relationship between REITs industry characteristics and project performance: The moderating role of macroeconomic fluctuations
title_short The relationship between REITs industry characteristics and project performance: The moderating role of macroeconomic fluctuations
title_full The relationship between REITs industry characteristics and project performance: The moderating role of macroeconomic fluctuations
title_fullStr The relationship between REITs industry characteristics and project performance: The moderating role of macroeconomic fluctuations
title_full_unstemmed The relationship between REITs industry characteristics and project performance: The moderating role of macroeconomic fluctuations
title_sort relationship between reits industry characteristics and project performance: the moderating role of macroeconomic fluctuations
publisher Institutional Knowledge at Singapore Management University
publishDate 2023
url https://ink.library.smu.edu.sg/etd_coll/564
https://ink.library.smu.edu.sg/context/etd_coll/article/1562/viewcontent/GPBA_AY2017_DBA_Cai_Ying.pdf
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