Please use this identifier to cite or link to this item: https://scholarbank.nus.edu.sg/handle/10635/223311
Title: PRICING DYNAMICS OF REIT
Authors: LIM HOE KEONG
Keywords: Real Estate
Issue Date: 7-Oct-2009
Citation: LIM HOE KEONG (2009-10-07T12:19:34Z). PRICING DYNAMICS OF REIT. ScholarBank@NUS Repository.
Abstract: Prices of REIT stocks have fallen drastically since the start of the subprime crisis in the United States (U.S.) in 2007. These are further weakened by the credit crunch that follows. According to NAREIT, the prices of REITs had fallen by about 15% to 50% in 2007 and 2008. The pricing dynamics and valuation of REIT, especially the premium (discount) of REIT price to its Net Value Asset (NAV), are important for investors and managers in their selection of REIT stocks and management of their investments portfolios since the pricing dynamics determine, to a large degree, broader trends within the REIT industry. This paper seeks to identify the predictive variables underlying the REIT pricing dynamics. The prices of U.S. REIT stocks were regressed against financial variables that include market value, free cash flow, dividend, FFO forecast and leverage cross-sectionally and over time. The results show that REIT market cap,future earnings forecast and Fund from Operation (FFO) estimates were found to be statistically significant and positively in explaining the variations in the prices of REIT stocks. The other financial variables were found to be statistically insignificant in influencing REIT pricing.
URI: https://scholarbank.nus.edu.sg/handle/10635/223311
Appears in Collections:Bachelor's Theses

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