Analysis of IPO Dividend Forecasts for Australian LPTs

Dimovski, William

doi:10.1080/14445921.2008.11104252

Cited by 3 publications

(2 citation statements)

References 9 publications

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“…In addition, a market report by Jones Lang LaSalle (2012) has forecasted real estate allocation by superannuation fund to increase to 25 per cent over the next decade. Dimovski (2008Dimovski ( , 2009) further identify the importance of A-REIT IPOs and capital raisings along with dividend forecasts for both retail and institutional investors, while Newell and Peng (2008) …”

Section: A-reit Institutional Backgroundmentioning

confidence: 99%

Market discounts and shareholder benefits

Ratcliffe

Dimovski

2014

Journal of Property Investment &Amp; Finance

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Purpose -The purpose of this paper is to examine the impacts of private placement announcements by Australian Real Estate Investment Trusts (A-REITs) on existing shareholders. The study examines 96 A-REIT private placements from January 2000 to December 2012. Design/methodology/approach -Utilising event study methodology the authors examine the impact on existing shareholders wealth by measuring the abnormal returns (AR) around the placement announcement. The authors extend the analysis to model the A-REITs ARs against a number of explanatory variables to investigate the possible drivers for the observed event study results. Findings -The results support the information signalling hypothesis, in that existing investors in A-REITs earn negative and significant cumulative ARs of À1.3 per cent over the three-day event window [À1, þ 1]. This result is in contrast to prior studies conducted on industrial firms, for example; Hertzel and Smith (1993), Krishnamurthy et al. (2005) and Wruck and Wu (2009).Practical implications -Regression analysis shows A-REITs trading at a premium to net tangible assets and A-REITs that use placement funds for their core business have a positive impact on announcement ARs. Originality/value -This paper adds to the existing literature surrounding private placements and is the first paper, to the authors' knowledge, to examine the impact of Australian REITs.

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Section: A-reit Institutional Backgroundmentioning

confidence: 99%

Market discounts and shareholder benefits

Ratcliffe

Dimovski

2014

Journal of Property Investment &Amp; Finance

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“…As to whether Australian Real Estate Investment Trust (A-REIT) IPO dividend forecasts were optimistically biased and should be treated with some skepticism by investors, Dimovski (2008) examined such IPOs during 1994-2004. The evidence at the time suggested that only stapled security A-REIT IPOs generally overestimated their dividend paying ability.…”

Section: Introductionmentioning

confidence: 99%

How accurate are A-REIT IPO dividend forecasts?

Dimovski

Ratcliffe

et al. 2019

JPIF

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Purpose The purpose of this paper is to investigate the accuracy of Australian Real Estate Investment Trust (A-REIT) initial public offering (IPO) dividend forecasts between 1994 and 2016. Design/methodology/approach This study compares the dividend forecasts of A-REIT IPOs for the first dividend forecast period in the prospectus, with the actual dividend declared for that forecast period. As well as simple descriptive summary measures, this study also employs an exact logistic regression approach to examine the factors that might influence the IPOs achieving or exceeding the dividend forecast. Findings The study identifies that the dividends declared, on average, were greater than the dividend forecast and that more than nine out of ten of the IPOs listed after 1999 achieved or exceeded their prospectus forecast. In addition the authors observe positive mean forecast errors, suggesting dividend forecasts in A-REIT IPOs, are cautiously biased. This is in contrast to the industrial company data reported in Brown et al. (2000) which suggest dividend forecasts are optimistically biased. The study also finds the A-REIT IPOs that did not forecast a dividend, generally did not pay a dividend. Practical implications The results will inform dividend seeking institutional and retail investors of the investment opportunities in A-REIT IPOs. Originality/value This paper adds to the discussion of the relative predictability of dividends of A-REIT IPOs compared to industrial company IPOs.

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