AN ANALYSIS OF HONG KONG AND SINGAPORE REITS: WHICH COUNTRY IS BETTER?

Abstract

The main motivation of this study aims to conducts an analysis on Hong Kong and Singapore REITS mainly through different aspects. Firstly, the returns and risk behavior of REITs listed in Hong Kong are compared against Singapore REITs based on certain financial metrics. This section will be screening through the Singapore and Hong Kong REITs in the same sectors and comparing their performance over the past 9 years. The time period would encompass both the GFC (September 2007 – February 2009) and the post-GFC periods. (March 2009 – January 2016) In the second part, this dissertation would aim to establish the reasons for the difference in performance for the 2 different markets. This would also lay the foundation to find out the reasons for the development of REITs in the 2 separate markets. Overall, Singapore REITs were deemed to perform better than Hong Kong REITs over the entire sample period as supported by the results of the regression test. This could possibly be one of the reasons why the REITs market in Singapore is more developed than Hong Kong. Looking at the beta, REITs in both markets were deemed to be less volatile than the market with a beta of less than 1, although in Singapore; CDL hospitality REIT, with a beta value of more than 1, is more volatile as compared to the others REITs as well as the overall REIT index.