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The significance of property type strategy of malaysian real estate investment trust

Tiong, Chai Ping (2019) The significance of property type strategy of malaysian real estate investment trust. Masters thesis, Universiti Teknologi Malaysia.

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Abstract

The performance of Malaysian Real Estate Investment Trust (M-REIT) companies is linked to the property type strategy adopted by each individual company. M-REIT was established a decade ago, yet the outcome in performance difference between the property type strategies of focused and diversified M-REIT is still largely unexplored, thus presenting investment information gap for M-REIT managers and investors. The main aim of this study is to identify the property type strategy adopted by M-REIT companies and the performance difference between focused and diversified M-REIT in a mixed asset portfolio. Investment data from 2010 to 2016 of fourteen M-REIT companies were examined. Multiple regression analysis (MRA) was employed to investigate the significant relationship between the financial performance of focused and diversified M-REIT and REIT determinants. The property type strategy was categorized according to the market value of underlying property in the M-REIT property portfolio. The performance of focused and diversified M-REIT was assessed by employing risk-adjusted performance analysis, portfolio diversification analysis, correlation analysis, efficient frontier analysis, and portfolio optimization analysis. The results indicate there were ten focused M-REIT and four diversified M-REIT companies. The findings on riskadjusted performance analysis revealed the superior performance of the diversified M-REIT over the focused M-REIT. However, the diversification analysis showed that both focused and diversified M-REIT offered diversification benefit in a mixedasset portfolio, with the latter contributed higher returns in the mixed asset portfolio than their focused M-REIT counterparts. The results of MRA indicate that for the focused M-REIT, total return and net asset value (NAV) were significantly related to property market value, while total return was significantly related to total property net income. Conversely, for the diversified M-REIT, total return showed no significant relationship with all the determinant factors. However, NAV for diversified M-REIT exhibited a significant relationship with dividend yield and annual risk. Overall, these findings suggest that property type strategy impacts MREIT performance, while property market value and property net income only exhibit a significant relationship with the financial performance of focused M-REIT.

Item Type:Thesis (Masters)
Uncontrolled Keywords:Malaysian Real Estate Investment Trust, Multiple regression analysis, net asset value
Subjects:N Fine Arts > NA Architecture
Divisions:Built Environment
ID Code:81644
Deposited By: Narimah Nawil
Deposited On:10 Sep 2019 09:53
Last Modified:10 Sep 2019 09:53

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