Open AccessEFFECT OF MACRO-ECONOMIC FACTORS ON FINANCIAL PERFORMANCE IN KENYA OF REGISTERED REAL ESTATE INVESTMENTS TRUSTS
Author(s) -
Sophia Wanjiku,
Joshua Bosire,
Joshua Matanda
Publication year - 2021
Publication title -
international journal of finance and accounting
Language(s) - English
Resource type - Journals
ISSN - 2518-4113
DOI - 10.47604/ijfa.1381
Subject(s) - real estate investment trust , real estate , variables , population , variable (mathematics) , regression analysis , economics , actuarial science , econometrics , business , finance , accounting , statistics , mathematics , demography , mathematical analysis , sociology
Purpose: The purpose of the study was to determine the macroeconomic effect on Registered Real Estate Investments Trusts (REITs) financial performance in Kenya.
Materials and Methods: Causal research design was used to describe the REITs financial performance. This study used the population comprising of thirteen REITs firms in Kenya. The entire population (census) was used for the study. This study utilized secondary sources of data to get the information required to satisfy the research objectives. Time series data on REITs financial performance was computed for a four-year period as at 1st January 2016 to 31stDecember 2019, thus making use of 4 data points. The process of data analysis entailed preparation of the collected data through cleaning, editing and coding so that statistics could be keyed in the SPSS (statistical package for social sciences) package. The data was presented through tables and figures
Results: The regression model results without the moderating variable showed that R = 0.792, R² = 0.627 indicating that 62.7% of the variance in the REITs financial performance can be accounted for by the independent variables (macroeconomic variables). On the other hand, the regression model results with the moderating variable showed that R = 0.838, R² = 0.703 indicating that 70.3% of the variance in the REITs financial performance can be accounted for by the independent variables (macroeconomic variables) and the moderating variable considered in this study.
Unique contribution to theory, practice and policy: The study recommended that the government and REITs stakeholders should focus on policies and strategies that encourage favorable balance of payment in Kenya. REITs develop and design their products to suit consumers tastes and preferences to ensure their increased as consumption increases. Lastly, the government should expand the money supply to lower the inflation rates through tight fiscal and economic policies.