The Effectiveness and Efficiency of REITs Performance in Malaysia

Abstract

Abstract: This research paper reports on the effectiveness and efficiency of REITs performance in Malaysia. This research paper studies the factors that influence the effectiveness and efficiency of REITs in Malaysia. Purpose: This paper aims to identify the factors that could affect the performance of REITs in Malaysia, to determine the effectiveness of interest rate toward the performance of REITs in Malaysia, to determine the relationship between property market climates that could lead to the effectiveness of REITs and to identify the effectiveness of dividend that could effects the performance of REITs in Malaysia. Design/methodology/approach: Data are retrieved from the utilizing journals, books, Thompson Data Stream, balance sheet, income statements and report by Bank Negara Malaysia for the period 2008-2012. Multiple regressions are applied to assess the impact of interest rate, property market climates and dividend rates on REITs performance. Findings: The results of the multiple regressions showed that the market capitalization, dividend yield and interest rate are significance since they rejected null hypothesis. For the correlation, there is strongly relationship between variable because positive and the T test between the each variable also shown the strong relationship. Originality/value: The study provides the understanding on factors that brings the effectiveness and efficiency of REIT’s performance in Malaysia and the results should be helpful on helping how to manage the independent variables to maintain the good performance of REITs. Also should be meaningful to the real property investors to investigate on performance of REIT’s market.