The Impacts of Corporate Governance on the Performance of REITs in Singapore

(ProQuest: ... denotes formulae omitted.)Since early 2000, the real estate investment trust (REIT) markets in Asia have grown significantly. The REIT industry is booming and is increasingly important in the regional capital market with the recovery from the Global Financial Crisis in 2009. The Singaporean REIT (S-REIT) market is the second largest REIT market in Asia after the Japanese REIT (J-REIT) market, which accounted for 25% of the total market capitalization of Asian REIT by July 2016. This indicates the contribution and significance of Singapore in the capitalization and development of the Asian REIT market.Singapore has consistent economic performance and has ranked second for five consecutive years in the Global Competiveness Index (GCI), which captures the fundamentals of the city-state economy (World Economic Forum, 2015). More importantly, Singapore is ranked third in the world as a global financial center after London and New York in the Global Financial Centers Index 19 (The Global Financial Centers Index 19, 2016). In addition, Singapore is the top global financial center in the Asia Pacific region. Singapore is also ranked eleventh in global real estate transparency and is ranked second after Australia in the pan-Asia regions in the Global Real Estate Transparency Index (Jones Lang LaSalle, 2016). This clearly indicates that Singapore is a successful financial hub in Asia, pan-Asia hub regions, and in the world for all categories of financial products and services. This includes various financial industry sectors such as the listed property securities and REITs in the Asia Pacific region.Singapore plays a significant role in property securities or property companies in Singapore (Ong, 1994, 1995; Liow, 1997, 2000, 2001a, 2001b; Newell, Chau, Wong, and Liow, 2009), property securities or real estate securities in Asia (Ooi and Liow, 2004; Liow and Sim, 2006; Liow, 2007; Liow, Ho, Ibrahim, and Chen, 2009; Nguyen, 2011; Liow, 2012; Liow and Chen, 2013), real estate markets in Asia (Liow and Webb, 2008; Liow and Adair, 2009; Newell, Chau, Wong, and Liow, 2009; Newell, 2013), REITs in Singapore (Sing and Ling, 2003; Newell, Pham, and Ooi, 2015), and REITs in Asia (Ooi, Newell, and Sing, 2006; Newell, 2012; Pham, 2012).In addition, this also accelerates the growth and development of REITs in other parts of Asia such as documented in the literature for the leading J-REITs in Asia (Kutsuna, Dimovski, and Brooks, 2008; Ong, Ooi, and Kawaguichi, 2011; Newell and Peng, 2012), Hong Kong (Newell, Wu, Chau, and Wong, 2010), Malaysia (Newell and Osmadi, 2009, 2010; Sing, Ho, and Mak, 2002), Taiwan (Lin, 2007; Lee, Kuo, Lee, and Lin, 2011; Peng and Newell, 2012), South Korea (Pham, 2011a), and Thailand (Pham, 2011b).Other studies in the context of pan-Asia REIT include volatility behavior in Asian REITs (Tsai, 2013), convergent behavior (Tsai and Lee, 2012), risk management in Asian REITs (Chiang, Tsai, and Sing, 2013), sponsor backing in Asian REIT IPOs (Wong, Ong, and Ooi, 2013), the impact of REITs on Asian economies (APREA, 2014a), regulations and taxes on REITs (APREA, 2014b), free cash flow and agency cost issues in Asian REITs (Chong, Hassan, Ting, and Cheng, 2015), dynamic links among Asian REITs (Loo, Anuar, and Ramakrishnan, 2015), and integration of the macroeconomy and Asian REIT markets (Loo, Anuar, and Ramakrishnan, 2016).Since 2000, 127 REITs have been established in Japan, Singapore, Hong Kong, Malaysia, Taiwan, and South Korea, with a total market capitalization in December 2015 of U.S. $169.43 billion. Exhibit 1 shows the significance and growth of REITs in these major Asian REIT markets from 2000 to 2015.Exhibit 2 shows the significance and the growth of major Asian REIT markets by July 2016. It can be seen that the number of REITs and market capitalization of REITs expanded in Asian REIT markets, particularly in Japan, Singapore, and Hong Kong. By July 2016, the market capitalization of S-REITs stood at U. …