Determinant Factors of Profitability in Malaysia’s Real Estate Investment Trusts (M-REITS)
DOI:
https://doi.org/10.33736/uraf.1209.2018Abstract
The performance of Real Estate Investment Trust (REIT) can be literarily explained in terms of its operational success which is revealed in its profitability to the investors (Grupe & DiRocco, 1999). A company’s success in investments is usually measured by its profitability. The objective of this study is to examine the role of determinant factors towards the profitability of M-REITs. This research was conducted using procedures of panel data for a total sample of 8 Malaysia’s Real Estate Investment Trusts (M-REITs) for a period of 8 years, starting from 2008 until 2015. The profitability of M-REITs was measured by the return on equity (ROE) as the dependent variable, whereas the determinant factors for M-REITs’ profitability are dividend yield (DY), net asset value (NAV) and price earnings ratio (PER) as the independent variables. The outcome from the research revealed that only dividend yield (DY) has a positive significant relationship with M-REITs profitability, and no significant relationship was found between both net asset value (NAV) and price earnings ratio (PER) towards M-REITs profitability.
References
Ali, H.M. (2006, April). Size Effect on the Performance of Listed Real Estate Companies, International Real Estate Research Symposium (IRERS). PWTC, Kuala Lumpur, Malaysia.
Alias, A. & Soi, T.C.Y. (2011). Performance analysis of REITs: Comparison between M-REITs and UK-REITs. Journal of Surveying, Construction and Property, 2(2), 38-61.
https://doi.org/10.22452/jscp.vol2no2.5
Ambrose, P.W. and Linneman, P. (2001). REIT organizational structure and operating characteristics. Journal of Real Estate Research, 21(3), 141-162.
https://doi.org/10.1080/10835547.2001.12091049
APREA. (2012). The investment characteristics and benefits of Asian REITs for retail investors. Retrieved from http://www.vascofm.com/~vasco167/images/dhflinders/apreareport.pdf.
Chan SH, Erickson J, Wang K. (2003). Real Estate Investment Trusts: Structure, Performance and Investment Opportunities. New York, USA: Oxford University Press.
Clayton, J., Eighholtz, P., Geltner, D. M., & Miller, N. G. (2007). Commercial Real Estate Analysis and Investments. International Student Edition (2nd Edition ed.). USA: South-Western.
Conover, M.C., Friday, H.S., and Howton, S.W. (2000). An analysis of the cross section of returns for E REITs using a varying-risk beta model. Real Estate Economics, 28(1), 141-63.
https://doi.org/10.1111/1540-6229.00796
Corgel, J.B. & Rogers, R.C. (1991). Market trading characteristics of REITs: Tests of the stock market and hybridsecurities hypotheses. Unpublished thesis, Cornell University and University of South Carolina.
Fuscaldo, D. (2015, May 22). Before you jump into real estate, know the risks. AOL. Retrieved from http://www.aol.com/article/2015/05/22/real-estate-investments-risks/21186041/.
Gujarati, D. N., & Porter, D. C. (2009). Basic econometrics (5th ed.). Boston: McGraw-Hill.
Hua, D., REIT Funds From Operations (FFO) Multiple Analysis, 2001, Golden Gate University.
Jalil, R.A., & Ali, H.M. (2015). Performance determinants of Malaysian real estate investment trusts. Jurnal Teknologi (Sciences & Engineering), 74(5), 151-159.
Keats, R. (2016, June 1). How Could an Interest Rate Hike Impact REITs? Market Realist. Retrieved from http://marketrealist.com/2016/06/interest-rate-hike-impact-reits/.
Mohamad, N.E.A, & Zolkifli, I.A. (2014). The determinant factors of real estate investment trust (REIT)'s performance: Evidence from Asian REITs. Indonesian Capital Market Review, 6(1), 53-59.
https://doi.org/10.21002/icmr.v6i1.2987
Myer, N.F.C. & Webb, J.R. (1993). Return properties of equity REITs, common stocks, and commercial real estate: A comparison. The Journal of Real Estate Research, 8(1),87-107.
https://doi.org/10.1080/10835547.1993.12090695
Newell, G. & Acheampong, P. (2001). The dynamics of property trust risk and correlation. Paper presented at the Pacific Rim Real Estate Society (PRRES) Conference 2001.
Ong, T.S., Teh, B.H., & Chong, M.P. (2011). A study on the performance of Malaysian real estate investment trusts from 2005-2010 by using net asset value approach. International Journal of Economics and Research, 2(1), 1-15.
Ong, T.S., Teh, B.H., Soh, C.H., & Yan, Y.L. (2012) Malaysian real estate investment trusts: A performance and comparative analysis. International Journal of Economics and Finance, 4(5), 73-84.
https://doi.org/10.5539/ijef.v4n5p73
Tan, S.H. (2009). Performance of Malaysia REIT stocks relative to Bursa Malaysia Stock Index. Unpublished master's thesis, Multimedia University, Malaysia.
Ting, K.H. & Rahman, M. Y. A. (2007, January). Stability of Dividends and FFOs: The Case of REITs in Malaysia. Paper presented at the 13th Pacific Rim Real Estate Society Annual Conference Fremantle, Perth, Australia.
Yee, C.M., Jian, C.Y., Wei, K.C., & Jing, T.W. (2011). Malaysian real estate investment trusts (M-REITs): A performance and comparative analysis.
Yu, G. (2009). Development: Performance and existing problem analysis, an overview of Asian REITs. (Unpublished master's thesis). KTH Royal Institute of Technology, Stockholm, Sweden.
Downloads
Published
How to Cite
Issue
Section
License
Copyright Transfer Statement for Journal
1) In signing this statement, the author(s) grant UNIMAS Publisher an exclusive license to publish their original research papers. The author(s) also grant UNIMAS Publisher permission to reproduce, recreate, translate, extract or summarize, and to distribute and display in any forms, formats, and media. The author(s) can reuse their papers in their future printed work without first requiring permission from UNIMAS Publisher, provided that the author(s) acknowledge and reference publication in the Journal.
2) For open access articles, the author(s) agree that their articles published under UNIMAS Publisher are distributed under the terms of the CC-BY-NC-SA (Creative Commons Attribution-Non Commercial-Share Alike 4.0 International License) which permits unrestricted use, distribution, and reproduction in any medium, for non-commercial purposes, provided the original work of the author(s) is properly cited.
3) For subscription articles, the author(s) agree that UNIMAS Publisher holds copyright, or an exclusive license to publish. Readers or users may view, download, print, and copy the content, for academic purposes, subject to the following conditions of use: (a) any reuse of materials is subject to permission from UNIMAS Publisher; (b) archived materials may only be used for academic research; (c) archived materials may not be used for commercial purposes, which include but not limited to monetary compensation by means of sale, resale, license, transfer of copyright, loan, etc.; and (d) archived materials may not be re-published in any part, either in print or online.
4) The author(s) is/are responsible to ensure his or her or their submitted work is original and does not infringe any existing copyright, trademark, patent, statutory right, or propriety right of others. Corresponding author(s) has (have) obtained permission from all co-authors prior to submission to the journal. Upon submission of the manuscript, the author(s) agree that no similar work has been or will be submitted or published elsewhere in any language. If submitted manuscript includes materials from others, the authors have obtained the permission from the copyright owners.
5) In signing this statement, the author(s) declare(s) that the researches in which they have conducted are in compliance with the current laws of the respective country and UNIMAS Journal Publication Ethics Policy. Any experimentation or research involving human or the use of animal samples must obtain approval from Human or Animal Ethics Committee in their respective institutions. The author(s) agree and understand that UNIMAS Publisher is not responsible for any compensational claims or failure caused by the author(s) in fulfilling the above-mentioned requirements. The author(s) must accept the responsibility for releasing their materials upon request by Chief Editor or UNIMAS Publisher.
6) The author(s) should have participated sufficiently in the work and ensured the appropriateness of the content of the article. The author(s) should also agree that he or she has no commercial attachments (e.g. patent or license arrangement, equity interest, consultancies, etc.) that might pose any conflict of interest with the submitted manuscript. The author(s) also agree to make any relevant materials and data available upon request by the editor or UNIMAS Publisher.
