TY - Generic T1 - "Optimal Leverage Strategies for Asian REITs " Y1 - 2018 A1 - Chang, Carolyn W. A1 - Kian Guan Lim A1 - Tien Foo Sing KW - Capital Structure KW - Dividend Payout KW - Liquidation Value KW - REIT KW - Uniqueness Of Business AB -

This paper studies the optimal leverage strategies for REITs in three major Asian markets - Hong Kong, Japan, and Singapore, from 2001 to 2013. REITs are a real-estate-focused investment holding and management companies that are subject to the REIT rules with respect to tax transparency, earning distribution, real estate holding and leverage limit. REITs use relatively less debt than other real estate operating firms, after controlling for agency risks, dividend yields, market risks, and also property sector, country, and year fixed effects. We find that dividend payouts have no effect on the leverage strategies; and the tax ratio increases debt usage of REITs. We also analyse the liquidation costs and business uniqueness effects. We find real estate value to total firm value ratio, as a proxy of liquidation cost, has negative effects on debt ratios for both real estate firms. For the uniqueness reason, REITs with a high concentration of rental revenue stream are more vulnerable to liquidation risks, and thus are more likely to have lower debt ratio.

JA - 25th Annual European Real Estate Society Conference T3 - ERES: Conference CY - Reading, UK J1 - Conference: 2018 ID - oai:eres.id:eres2018_71 M3 - 10.15396/eres2018_71 ER -