NAV And Risk: The Case Of REITs

Brent, William; Kelly, Lynne; Lindsey, Debby A.; Price, Russell M.

doi:10.19030/jber.v9i7.4679

Cited by 3 publications

(3 citation statements)

References 12 publications

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“…According to David and Andy (2003), net asset value per share is a measurement of REITs' intrinsic value. Brent et al (2011) explained that the determinants of growth value of REITs is based on net asset value (NAV) per share, which is referred to as book value per share which is the underlying value of REIT assets. Prior research showed that the price to book value and book to market values (inverse of price to book value) were used as a ratio for the measurement (Alomari et al, 2018;Cheng & Roulac, 2007;Hou et al, 2011).…”

Section: Price To Book Valuementioning

confidence: 99%

The Impact of Financial Determinants on Malaysian Reits’ Performance

Sulaiman

Hing

Shahimi

et al. 2023

JBMA

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Property investment in Malaysia has experienced tremendous growth and is considered one of the prime investments by investors due to its stable return growth over the years. This study examined the effects of six financial determinants (earnings per share, debts to assets, price-to-book value, dividend yield, market capitalisation, and return on equity) on the annual return of Malaysian Real Estate Investment Trusts (REITs). The common performance indicator of company can be seen in the percentage change in stock price plus when the dividend paid at the end of the year is used to measure the annual return performance of REITs. A total of 154 firm year observations for a sample of 14 Malaysian REIT companies were examined for a period of 11 years (2008-2018) from the Bloomberg terminal. Multiple regression analysis was used to analyse the data. Findings showed that there is a positive relationship between earning per share, price-to-book value and dividend yield and REITs’ annual return. On the other hand, this study showed that there is no significant relationship between debts to assets and REITs’ annual return. The results also showed that market capitalisation and return on equity are negatively related to Malaysian REITs’ annual returns. Overall, the results highlighted two key features. First, earnings per share and return on equity should be used by investors and management to assess the profitability and operational efficiency of REITS. Second, the investors should use dividend yield as one of the key investment criteria when assessing REIT investment decisions. This study contributed to the literature in REITs by increasing the effects of the explanatory power of financial determinants on REITs’ annual returns.

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Section: Price To Book Valuementioning

confidence: 99%

The Impact of Financial Determinants on Malaysian Reits’ Performance

Sulaiman

Hing

Shahimi

et al. 2023

JBMA

View full text Add to dashboard Cite

show abstract

“…The contribution of the selected variables on the REIT performance is strongly supported by the extant literature. A series of studies identify dividend distribution (Wang et al 1993;Bradley et al 1998;Ghosh and Sirmans 2006), leverage (Giacomini et al 2017), size (McIntosh et al 1991Hamelink and Hoesli 2004;Brounen and de Koning 2013), the net asset value (Clayton and MacKinnon 2001;Brent et al 2011) and the cash flows generated by the operations of business funds from operations (see for example, Gore and Stott 1998;Feng and Liu 2021), as important drivers of REIT performance.…”

Section: Introductionmentioning

confidence: 99%

Predicting the REIT Corporate Life Cycle Phase on a Financial Accounting Basis

Petris

2023

JRFM

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This study investigates the effect of financial–accounting variables on a firm’s distinct life cycle phase. The study concentrates on the real estate sector and uses data of publicly listed REITs which are traded in the European market. To assess the empirical argument, a multinomial panel logit model is employed. The empirical results show that leverage, dividend distribution, the size and the sales variable have significant predictive power over the corporate life cycle classification of an REIT. Higher leverage is associated with an elevated probability of the REIT being classified in the early stage of its corporate life cycle, as opposed to the maturity stage. Positive leverage variation is also a significant predictor of the REIT being categorized in the shake–out stage, while lower dividend distribution, negative sales and size variation are all associated with an increased probability of the REIT being classified in the decline stage, rather than in the maturity phase.

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“…Net asset value (NAV) is considered the underlying value of REITs, which drives the trading decision [1]. Funds from operations (FFO) have become the industry-wide benchmark for the performance of REITs [2].…”

Section: Introductionmentioning

confidence: 99%

Using stepwise regression and support vector regression to comprise REITs' portfolio

Feng

2014

2014 IEEE 7th Joint International Information Technology and Artificial Intelligence Conference

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Real estate investment trusts (REITs) are incomebased financial assets whose yields are largely related to financial and operating conditions. Their revenue comes mainly from the rent, and more than 90% distribute dividends. Therefore, the return on investment is stable and predictable. This paper attempts to study the relationship between yield and key indicators, and then constructs a good portfolio of REITs. Empirical data are 165 listed REITs with 50 key statistics (including three kinds of indicators: enterprise valuation, financial highlights, and trading information). Stepwise regression and support vector regression are used for modeling. A strategy, the Top 10% Strategy, is proposed as an application of this study, and this approach is validated by simulation. With STEP and SVR methods, the strategy has gained approximately 20% yield, which is much higher than the average of dataset, 8%. The results show that using key statistics can significantly increase profitability of REITs investment.

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NAV And Risk: The Case Of REITs

Cited by 3 publications

References 12 publications

The Impact of Financial Determinants on Malaysian Reits’ Performance

The Impact of Financial Determinants on Malaysian Reits’ Performance

Predicting the REIT Corporate Life Cycle Phase on a Financial Accounting Basis

Using stepwise regression and support vector regression to comprise REITs' portfolio

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