Borsa Performance Analysis of Real Estate Investment Trusts Traded in Borsa Istanbul for 2010-2020

Abstract

Purpose – Economic and financial crises are very frequent in th world nowadays. Real Estate Investment Trusts were emerged as a solution to the liquidity and sustainable growth problems faced by real estate and its related sectors. The stock market performances or the financial ratio performances of the REITs became very important for individual or corporate investors to investitage, analyse and understand their positions. This study was conducted in order to investigate the effects of liquidity, leverage, operating and profitability ratios on the stock market performance ratios of REITs traded in Borsa Istanbul for the period of 2010.Q1-2020Q1.

Design/methodology/approach – The sample selection of this study consists of REITs companies traded in Borsa Istanbul Corp. and the financial ratios of these companies have been obtained from the www.finnet.com data bank. These obtained data were analyzed and reported by using the STATA program.

Findings – As a result of the analysis; It was determined that the independent variables addressed in the regression outputs explain the Market Value / Book Value (MV/ BV) variable as 82.3 percent. The most impressive of the significant variables was the cash cycle. When the cash cycle increased by 1 unit, the MV/BV variable increased by 38 percent. Accordingly, when the net profit growth rate, the net profit magrin rate and the operating rate were increased by 1 unit, the MV/BV variable was increased by 27, 20 and 19 percents, respectively. On the other hand, when the Financial Debt / Total Debt ratio and the Debt / Equity ratio increased by 1 unit, MV/BV was decreased by 9 and 5 percents, respectively.

Discussion – Financial ratios have a great effect on the MV/BV ratio of REITs trade in the BIST. In particular, while cash cycle, net profit growth, net profit magrin, operating profit growth, operating profit magrin, equity growth and liquidity ratios increase the MV/BV ratio, financial debt / total debt and debt / equity ratios decrease.