Please use this identifier to cite or link to this item: https://scholarbank.nus.edu.sg/handle/10635/219717
Title: REIT CHARACTERISTICS AND INTERNALISATION PROBABILITY: A STUDY OF AUSTRALIAN REITS
Authors: YAP HON SHENG KEVIN
Keywords: Real Estate
RE
Ong Seow Eng
2014/2015 RE
Agency Costs
Management Structure
Management Inefficiency
REITs
Internalisation
Wealth Effect
Issue Date: 4-Jun-2015
Citation: YAP HON SHENG KEVIN (2015-06-04). REIT CHARACTERISTICS AND INTERNALISATION PROBABILITY: A STUDY OF AUSTRALIAN REITS. ScholarBank@NUS Repository.
Abstract: This paper investigates 27 internalisation bids in the Australian REIT (“A-REIT”) market from 2000 to 2014. To determine if management inefficiency is a driver of internalisation, the characteristics of internalisation subjects are first compared to a control group. This group comprises of all observations of externally-managed A-REITs. The result of the multinomial logit regression reveals that internalisation subject showed no significant levels of management inefficiency. Consistent with market predictions, size is positively related to the probability of internalisation. This holds true even during subsequent robustness test. The second part of this study investigates the shareholder wealth effects following an internalisation announcement. Contrary to expectations, internalisation leads to negative abnormal returns. If the market is efficient, the negative wealth effect implies that an internal managers offer less benefit than external managers.
URI: https://scholarbank.nus.edu.sg/handle/10635/219717
Appears in Collections:Bachelor's Theses

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