FINANCIAL PRACTICES THAT CAN BE LEARNT AND APPLIED TO REITS FROM A SUCCESSFUL REIT MARKET: A CASE STUDY OF U.S. REITS, A-REITS AND J-REITS

Abstract

The aim of this dissertation is to study the relationship between key financial variables of the real estate investment trust (REIT) to risk adjusted returns. Analysis done on a sample pool of 133 REITs from United States (U.S.), Australia and Japan during the period of Q1 2011 to Q4 2015 has reveal that U.S. REITs outperformed A-REITs and J-REITs in terms on risk adjusted returns. In addition, a study of the differential effect of U.S. REIT’s financial indicators on risk-adjusted performance was done to understand which financial performance variables of a successful REIT drives it to outperform from the rest. It seems that the sheer difference in the average size of the market capitalization as well as higher gearing practices of U.S. REITs were the two compelling variables that drove the U.S. REIT to outperform REITs found in Australia and Japan.