DO LISTED PROPERTY FIRMS AND S-REITS EXHIBIT DIFFERENT FINANCING BEHAVIOUR UNDER SIMILAR MARKET CONDITIONS?

Abstract

The primary interest of this paper is to examine the financing behavior of S-REITs and listed property firms. S-REITs are subjected to regulations such as the leverage limit set by MAS, which listed property firms are not subjected. Using a comprehensive data set consisting of equity and debt issues from 2002 to 2011, it is shown that S-REITs and listed property firms do exhibit different financing behavior under similar market conditions. Evidence was also found that term spread and asset size of S-REITs have significant effect on the decision of S-REITs to issue debt. In addition, leverage ratio and STI return have significant effect on the decision of SREITs to issue equities.