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Corporate Governance and Performance of Externally Managed Singapore Reits

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  • Patrick Lecomte
  • Joseph Ooi

Abstract

This paper employs a new scoring framework designed by the Asia Pacific Real Estate Association (APREA) to examine the link between corporate performance and quality of corporate governance among externally managed REITs listed on the Singapore Stock Exchange (S-REITs). The empirical tests provide evidence supporting a positive correlation between corporate governance practices and stock performances. However, we find no positive correlation with operating performance proxied by accounting measures. In other words, S-REITs with higher corporate governance tend to register better risk-adjusted returns but do not outperform operationally. To test for market efficiency, the study shows that S-REITs with the best corporate governance practices also have less information asymmetry. Copyright Springer Science+Business Media, LLC 2013

Suggested Citation

  • Patrick Lecomte & Joseph Ooi, 2013. "Corporate Governance and Performance of Externally Managed Singapore Reits," The Journal of Real Estate Finance and Economics, Springer, vol. 46(4), pages 664-684, May.
    • Handle: RePEc:kap:jrefec:v:46:y:2013:i:4:p:664-684
    DOI: 10.1007/s11146-012-9377-9
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    References listed on IDEAS

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    Cited by:

    1. Fan Zhang & Joseph T. L. Ooi, 2022. "CEO's age and acquisition behaviors of REITs," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 50(4), pages 1107-1140, December.
    2. Kevin Hon Sheng Yap & Seow Eng Ong & Wee Yong Yeo, 2018. "Demystifying the Management Structure Puzzle: an Empirical Investigation into the Drivers of REIT Internalization," The Journal of Real Estate Finance and Economics, Springer, vol. 57(3), pages 367-399, October.
    3. Daniel Broxterman & Tingyu Zhou, 2023. "Information Frictions in Real Estate Markets: Recent Evidence and Issues," The Journal of Real Estate Finance and Economics, Springer, vol. 66(2), pages 203-298, February.
    4. Cheng Keat Tang & Masaki Mori, 2017. "Sponsor Ownership in Asian REITs," The Journal of Real Estate Finance and Economics, Springer, vol. 55(3), pages 265-287, October.
    5. Dong Chen & Yanmin Gao & Mayank Kaul & Charles Ka Yui Leung & Desmond Tsang, 2016. "The Role of Sponsors and External Management on the Capital Structure of Asian-Pacific REITs: The Case of Australia, Japan, and Singapore," International Real Estate Review, Global Social Science Institute, vol. 19(2), pages 197-221.
    6. Honghui Chen & David M. Harrison & Mahsa Khoshnoud, 2020. "Investors’ Limited Attention: Evidence from REITs," The Journal of Real Estate Finance and Economics, Springer, vol. 61(3), pages 408-442, October.
    7. Ruoran Xu & Joseph T. L. Ooi, 2018. "Good Growth, Bad Growth: How Effective are REITs’ Corporate Watchdogs?," The Journal of Real Estate Finance and Economics, Springer, vol. 57(1), pages 64-86, July.
    8. Rekha Pillai & Husam-Aldin N. Al-Malkawi & M. Ishaq Bhatti, 2021. "Assessing Institutional Dynamics of Governance Compliance in Emerging Markets: The GCC Real Estate Sector," JRFM, MDPI, vol. 14(10), pages 1-18, October.
    9. Gang-Zhi Fan & Zsuzsa R. Huszar & Weina Zhang, 2016. "The Helping Hand of the State in Chinese Real Estate Firms: Anti-corruption and Liberalization," International Real Estate Review, Global Social Science Institute, vol. 19(1), pages 51-97.
    10. Yuen-Meng Wong, 2016. "Malaysia REITs: First Decade Development and Returns Characteristics," International Real Estate Review, Global Social Science Institute, vol. 19(3), pages 371-409.
    11. Chioma Okoro & Marie Mangwi Ayaba, 2023. "Research Trends and Directions on Real Estate Investment Trusts’ Performance Risks," Sustainability, MDPI, vol. 15(6), pages 1-20, March.

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