Open AccessInternational Real Estate Review
Author(s) -
Dong Chen,
Yanmin Gao,
Mayank Kaul,
Desmond Tsang
Publication year - 2016
Publication title -
journal of the asian real estate society
Language(s) - English
Resource type - Journals
ISSN - 1029-6131
DOI - 10.53383/100220
Subject(s) - real estate investment trust , leverage (statistics) , maturity (psychological) , business , debt , monetary economics , financial system , real estate , finance , economics , psychology , developmental psychology , machine learning , computer science
This paper studies how the presence of sponsor and external management affect leverage and debt maturity decisions in three major Asian-Pacific real estate investment trust (REIT) markets: Australia, Japan and Singapore. Our empirical results indicate that sponsored REITs opt for higher levels of leverage and loans with longer maturity. On the contrary, externally managed REITs are associated with lower leverage and loans with shorter maturity. Our results are robust to the inclusion of other firm variables and to alternative specifications. Subsequent to the financial crisis, the impact of sponsorship on debt financing decisions has diminished, and borrowing of externally managed REITs is further constrained.