Asian REITs: Playing the Yield Game

Ooi, Joseph T. L.; Har, Neo Poh

doi:10.1002/9781444315301.ch5

Cited by 2 publications

(2 citation statements)

References 1 publication

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“…In East Asian countries, REITs cumulate external management structures and family-controlled ownership, which makes them particularly prone to agency issues (Pica, 2011). The management structure is usually a wholly owned subsidiary of a family-based property developer called a "sponsor group" (Ooi & Har, 2009). This places East Asian property developers in a strong position to divest their properties into one or several REIT platforms, in order to unlock the value of their real estate portfolios and redeploy capital into (re) development, while receiving fee-based income from their securitized properties (Ooi, Ong, & Neo, 2011).…”

Section: Property Developers and The Anchorage Of Liquid Capital Intomentioning

confidence: 99%

Embedment of “Liquid” Capital into the Built Environment: The Case of REIT Investment in Hong Kong

Aveline-Dubach¹

2016

InS

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Since the Global Financial Crisis, the notion of securitization has become familiar to urban scholars, though research has been limited to mortgage-backed securities. This paper attempts to delineate the distinctive urban outcomes of securitization techniques applied to real estate, taking Hong Kong REITs (H-REITs) as a case study. It examines the way through which liquid H-REIT capital anchors into the built environment, and how this process impacts the life of local communities. The study shows that the urban dynamics of REIT investment contrast with the corporate environment and asset management objectives of the initiator/sponsor groups of H-REIT structures, a set of characteristics that are captured by the notion of “management styles.” Amongst the three management styles identified in the paper, those developed by the Hong Kong family-based groups have not been sufficiently active to produce significant effects on the built environment. In contrast, the Link REIT has an aggressive value enhancement strategy that has reconfigured the social geographies of retail consumption across the whole territory, to the detriment of social housing estate residents. These results support the recognition that the financialization of the built environment tends to exacerbate social polarization and to trigger political conflicts, but they must be weighed against the contingent conditions in which real estate securitization take place.

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Section: Property Developers and The Anchorage Of Liquid Capital Intomentioning

confidence: 99%

Embedment of “Liquid” Capital into the Built Environment: The Case of REIT Investment in Hong Kong

Aveline-Dubach¹

2016

InS

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“…REITs have substantial cash flow constraints due to the dividend payout requirement (Hardin et al , 2009; Hill et al , 2010). REITs in most countries are restricted to undertake significant developments or other investments (Ooi and Neo, 2010).…”

Section: Introductionmentioning

confidence: 99%

Capital structure decisions of LPTs in a small economy

Dong

2012

J of Property Inv & Finance

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PurposeThe existing literature on real estate investment trust (REIT) capital‐structure decisions implicitly excludes either interest payment tax shield benefits or a trust's growth potential. The purpose of this paper is to test the long‐term debt leverage decisions of listed property trusts (LPTs), but without excluding interest payment tax shield benefits and growth potential. A new variable, the exchange rate, is included in the tests, because financial products subject to globalization, such as SWAPs are currently used to support the funding of small economies.Design/methodology/approachThis paper uses a truncated regression and probit model to empirically test two competing hypotheses – the trade‐off theory and the pecking order theory. It also takes into account the implicit debt costs influenced by the exchange rate. The data for New Zealand LPTs are used.FindingsUnlike the existing literature, it is found that the trade‐off theory is supported, while the pecking order theory is rejected, when New Zealand LPTs are studied. The additional variable of the one‐year forward appreciation rate of the New Zealand dollar against the US dollar is found to have a significant negative relationship with changes in the long‐term debt ratio.Practical implicationsThis paper suggests that LPTs tend to reduce long‐term debt when the market signals a possible appreciation of the New Zealand dollar.Originality/valueThe paper identifies the need to explicitly take into account both tax‐shield benefits and growth potential when testing competing hypotheses on capital structure decisions. It also recommends including the exchange rate in the capital structure determinants test, especially when companies or trusts in a small economy are studied.

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Asian REITs: Playing the Yield Game

Cited by 2 publications

References 1 publication

Embedment of “Liquid” Capital into the Built Environment: The Case of REIT Investment in Hong Kong

Embedment of “Liquid” Capital into the Built Environment: The Case of REIT Investment in Hong Kong

Capital structure decisions of LPTs in a small economy

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