IPO underpricing, signaling, and property returns

Brämisch, Fabian; Rottke, Nico B.; Schiereck, Dirk

doi:10.1007/s11408-010-0151-9

Cited by 4 publications

(5 citation statements)

References 52 publications

(93 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…It is obvious that the average initial return of REITs (2.02 per cent) is less than half of the initial return of REOCs (5.69 per cent) and both are statistically significant at the 1 per cent level. The underpricing level of the REOC subsample is in line with the result of Braemisch et al (2011). Buttimer et al (2005) reported similar findings and explained the lower underpricing level of REITs by their transparency compared to other stocks.…”

Section: Jerer 111supporting

confidence: 84%

“…The average initial return on the first day of trading shows a significant underpricing of 4.63 per cent. The underpricing level of this mixed sample is higher than the initial return of the pure REIT study of Bairagi and Dimovski (2011) and lower than Braemisch et al (2011), who only investigated listed property companies. The initial return varies from an overpricing of 6.09 per cent to an underpricing of 29.94 per cent.…”

Section: Jerer 111mentioning

confidence: 71%

“…An increasing offer size leads to a decreasing initial return. This result implies that IPOs with a higher volume are associated with more recoverable assets and more efficient management (Braemisch et al, 2011), which both signify a higher professionality level. The hypothesis that older companies are less underpriced (H2) can be verified by a statistically significant negative coefficient of LN (AGE þ 1).…”

Section: Jerer 111mentioning

confidence: 94%

“…Freybote et al (2008),Braemisch et al (2011) yielded higher underpricing at 7.26 per cent and 6.00 per cent, respectively. Freybote et al (2008) investigated 105 IPOs of property companies during the period 1994-2006, with a focus on different market phases during the IPO cycle.…”

mentioning

confidence: 91%

“…The few European studies focus exclusively on REOC IPOs, using various methodological approaches. For example, Braemisch et al (2011) examine the relationship between the yields and total returns of direct property investments, which can be assigned directly to an IPO. Freybote et al (2008), focus predominantly on the cyclicality of European property IPOs.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

REITs and REOCs and their initial stock market performance: a European perspective

Ascherl

Schaefers

2018

JERER

View full text Add to dashboard Cite

Purpose -The purpose of this study is to examine the differences between initial public offering (IPO) pricing in the real estate sector and to provide insight into how real estate investment trust (REIT) and real estate operating company (REOC) IPOs perform in a comparative framework.Design/methodology/approach -The sample consists of 107 European REIT and REOC IPOs from nine European countries over the period 2000-2015. The initial returns are examined by creating subsamples based on the two business forms, countries and specific timeframes (before, during and after the global financial crisis). A multiple regression analysis is applied to identify the ex-ante uncertainty factors, IPO and firm characteristics, which may impact on the different underpricing levels of REITs and REOCs.Findings -European property companies are on average significantly underpriced by 4.63 per cent. The results also reveal that REITs provide a significantly lower underpricing of 2.02 per cent than REOCs, with a positive initial return of 5.69 per cent. The causal treatment effect of the legal form of the company and the underpricing is confirmed by propensity score matching. Among the most influential factors for a lower REIT underpricing, besides the REIT-status itself, are the volatility, offer size and market phase of the IPO. During the global financial crisis (GFC) (2008)(2009)(2010), underpricing exceeds the initial return for the total sample by approximately 70 per cent.Originality/value -This is the first study investigating differences in the underpricing level of REITs and REOCs in a European setting, including the GFC as an extraordinary market phase. The authors provide evidence that REIT IPOs compared to REOC IPOs "leave less money on the table".

show abstract

Section: Jerer 111supporting

confidence: 84%

Section: Jerer 111mentioning

confidence: 71%

Section: Jerer 111mentioning

confidence: 94%

mentioning

confidence: 91%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations