The Role of Sponsor and External Management on the Capital Structure of Asian-Pacific REITs: The Case of Australia, Japan, and Singapore

37 Pages Posted: 16 Jan 2015

See all articles by Dong Chen

Dong Chen

Wuhan University - School of Economics and Management

Yanmin Gao

City University of Hong Kong - College of Business

Mayank Kaul

Citibank, N.A. - Risk Management

Charles K. Leung

City University of Hong Kong

Desmond Tsang

McGill University - Desautels Faculty of Management

Multiple version iconThere are 2 versions of this paper

Date Written: January 16, 2015

Abstract

This paper studies how the presence of sponsor and external management affect leverage and debt maturity decisions in three major Asian-Pacific 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.

Keywords: Asian-Pacific REIT markets, capital structure, debt maturity, simultaneous equation modelling, financial crisis

JEL Classification: F30, G10, R30

Suggested Citation

Chen, Dong and Gao, Yanmin and Kaul, Mayank and Leung, Charles Ka Yui and Tsang, Desmond, The Role of Sponsor and External Management on the Capital Structure of Asian-Pacific REITs: The Case of Australia, Japan, and Singapore (January 16, 2015). ISER Discussion Paper No. 920, Available at SSRN: https://ssrn.com/abstract=2550649

Dong Chen

Wuhan University - School of Economics and Management ( email )

Wu Han, Hu-Bai 430072
China

Yanmin Gao

City University of Hong Kong - College of Business ( email )

Hong Kong
Hong Kong

Mayank Kaul

Citibank, N.A. - Risk Management ( email )

40th Floor Citibank Tower, Citibank Plaza
3 Garden Road, Central
Hong Kong
Hong Kong

Charles Ka Yui Leung (Contact Author)

City University of Hong Kong ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong

Desmond Tsang

McGill University - Desautels Faculty of Management ( email )

1001 Sherbrooke St. West
Montreal, Quebec H3A1G5 H3A 2M1
Canada

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