Monografico

DOI: http://dx.doi.org/10.25115/eea.v39i4.4874

Volumen:39-4 // ISSN: 1133-3197

Analysis of M-REITs Performance Based on Financial Factors

and the Degree of Specialization
HANIZA HASHIM1*, NUR BAITI SHAFEE2, SHADIA SUHAIMI3, SITI NURUL HUDA MOHD4,
Faculty of Business, Multimedia University, Melaka, MALAYSIA.
1
E-mail: [email protected]
2
E-mail: [email protected]
3
E-mail: [email protected]
4
E-mail: [email protected]

ABSTRACT

The purpose of this research is to analyse the Malaysian Real Estate Investment Trusts (M-REITs) performance
based on Financial Factors and Property Characteristics. M-REITs is a relatively new investment vehicle in
Malaysia which is slowly soaring. As a developing nation in Asia, Malaysia is currently undergoing vast
developments. In this regard, in line with the perpetual development of the Malaysian economy, the significance
of M-REITs as a form of investment is also growing, but still far from the establishment state of bonds and stocks.
This is attributable to the lack of awareness of the drivers and performance of M-REITs. Previous research on the
performance of M-REITs had considered the expected returns as the measure of performance, factoring in
financial determinants as well as the property characteristics. Nevertheless, due to the relatively new
establishment of M-REITs, only a small sample with limited time series data is available for the examination of
the M-REITs. This study seeks to rectify these flaws by employing the latest data of the listed M-REITs to test for
the significance of the fir specific determinants of the performance of M-REITs, measured using another proxy
termed the funds from operations, of which is a specific measure of M-REITs. The results would then offer
inferences about the significance of the firm specific factors on the performance of M-REITs
Keywords: Malaysian Real Estate Investment Trusts (M-REITs), performance based on Financial Factors and
Property Characteristics
JEL Classification: M3, P34

Recibido: 30 de Marzo de 2021

Aceptado: 14 de Abril de 2021
 Haniza Hashim, Nur Baiti Shafee, Shadia Suhaimi, Siti Nurul Huda Mohd

1. Introduction

This research probes into how financial factors and the degree of specialization affect the
performance Malaysian Real Estate Investment Trusts (M-REITs). This part of the chapter provides an
overview of the research by covering aspects such as the background of the study, along with the
problem statement, research objectives, research questions, significance of the study. The secondary
data used in this research comprises information regarding 18 listed M-REITs over a 5-year timeline.
The firm-specific factors are retrievable from various documented sources.

1.1. Background of research

Real Estate Investment Trusts (REITs) represents a form of investment instrument, which works on
the principle whereby tax exempted real estates or properties are owned and managed. REITs are
essentially property trust funds that pool funds from investors for the acquisition of properties, which
are subsequently operated. The rental income generated from the properties owned are then paid out
as dividends to the REIT investors, known as unit holders (Securities Commission Malaysia, 2005). In
Asia, Malaysia represents the pioneer to have a public listing of REITs, which was formerly known as
property trusts. The investment rates in REITs in Malaysia are significantly lower as compared to other
countries in which REITs is an investment option (Newell & Osmadi, 2009) due to financial factors
which comprise size (market capitalisation), book-to-market value (BMV), leverage, and beta.

1.2. Problem statement

The performance of REITs, conventionally evaluated based exclusively on the returns, lacked
studies that appraise performance based on other equally reliable proxies (Ong, Teh, & Chong, 2011).
Considering the fact that M-REITs are not a popular investment choice, and the adverse perception of
Malaysians towards it (Ong, Teh, & Chong, 2011), an empirical investigation of the firm-specific factor
comprising the degree of specialization and financial factors of M-REITs is conducted to assess how
these factors are related and the potential impact they have on the performance of M-REITs in terms
of funds from operations. In the Malaysian context, studies have been carried out to assess the
performance of M-REITs in terms of the different property type. However, the validity of the results
are at doubt as M-REITs only got listed on the Bursa Malaysia in 2005 which resulted in a relatively
brief period of study, subsequently affecting the reliability of the results for the performance on a long
term period. Additionally, the performance of M-REITs were measured solely based on expected
returns, which makes the validity of the performance evaluation results rather biased. It is
recommended that another measure of performance of REITs, such as the funds from operations,
should be adopted to enhance the robustness of the findings (Ong T. S., Teh, Soh, & Yan, 2012). Past
studies concerning the performance of M-REITs are not focused on the degree of specialization of M-
REITs but rather to the type of property the firm is managing. This indicates that research on the
assessment of the degree of specialization of M-REITs on the performance is only a handful and very
limited (Jalil & Ali, 2015). Studies carried out to assess the performance of M-REITs are typically
concentrated on only one factor, whilst omitting other significant factors. In other words, previous
studies done have failed to employ other important performance determinants of REITs for the
simultaneous performance evaluation of M-REITs (Ping & Jalil, 2016).

1.3. Research objectives

1. To comprehend the relationship between the firm-specific determinants and the performance
of M-REITs using funds from operations as a proxy.
2. To identify the extent of influence of the degree of specialization on the performance of M-
REITs in terms of funds from operations.
3. To determine the degree of impact of financial factors on the performance of M-REITs in terms
of funds from operations.

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 Analysis of M-REITs Performance Based on Financial Factors and the Degree of Specialization

1.4. Research Questions

1. What is the relationship between the firm-specific factors and the performance of M-REITs in
terms of funds from operations?
2. How does the degree of specialization affect the funds from operations of M-REITs?
3. How does the market capitalization, book-to-market value, leverage, and beta of M-REITs
determine the performance of M-REITs in terms of funds from operations?

1.5. Significance of study

The findings and outcomes of this research will look into the areas that are yet to be explored in-
depth as well as to present a detailed and comprehensive understanding of the factors discussed which
are capable of influencing the performance M-REITs. From the perspective of investors, this research
presents the various players in the M-REIT industry. Essentially, this research is aimed at building
knowledge related to M-REITs to Malaysians in general, to nurture prospective investors aspiring to
consider M-REITs as an investment option.

2. Literature Review

The literature review plays an essential role of ensuring that this research is based on valid and legit
variables, or in the context of this research, determinants, which are capable of influencing the
performance of M-REITs. All relevant facts and findings derived from previous studies and dissertations
are the basis for this research, and will be further discussed and clarified.

2.1. Performance of M-REIT, funds from operations (FFO) as proxy

FFO is essentially depreciation and amortization added to the net income while deducting any gains
or losses incurred from the operations (Block, 1997). Traditionally, the FFO has been omitted from the
financial statements with only minor disclosure. Till date, as a security governed under the securities
exchange commission, REITs are now mandated to have FFO disclosed in the accounting reports to
serve as a unit of measurement in accordance to the latest accounting reporting standards (National
Association of Real Estate Investment Trusts (NAREIT), 1995). FFO, being a unique accounting item that
is not commonly found in most of the books of common securities, is regarded as a unique
performance metric that has been established as a standard of the REITs sector. FFO establishes a
performance appraisal, which is relatively more informative and not as misleading as the other
measures (National Association of Real Estate Investment Trusts (NAREIT), 1997–2006). FFO is more
closely associated with the returns of REITs compared to the other measures, which brands FFO as the
more informative evaluation tool when it comes to assessing the performance of REITs.

2.2. Theory
It has long been in tradition to relate any financial evaluation regarding the performance of stocks
or securities of equivalent using the two main approaches. They are known respectively as the Capital
Asset Pricing Model (CAPM) and the Fama and French three factor model. CAPM estimate the expected
return and Fama and French three factor model employs market capitalization, the book-to-market
value, as well as the degree of leverage in the derivation of returns (Fama & French, 1995).

2.2.1. Degree of specialization

REITs with portfolio of 75% or more invested in a variety of property type are classified as diversified
(Ambrose B. W., 2001). Past research have demonstrated that in the United States where REITs are
established and flourished, a minority of REITs are diversified by property type whereas the mass of
REITs are specialized in either a single property or two property types, which are similar in nature
(National Association of Real Estate Investment Trusts (NAREIT), 1997–2006). Furthermore, several
research had been conducted to investigate relationship of REITs of healthcare property type and

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 Haniza Hashim, Nur Baiti Shafee, Shadia Suhaimi, Siti Nurul Huda Mohd

performance, study on hotel REITs, and residential REITs. The varying type of real estate resulted in
the difference in performance of REITs. Taking this principle into application, a diversified REIT
portfolio constituting of REITs engaged in different property types is potentially influential on the
performance in the sense that the effect of diversification is reflected in the performance (Myer, Neil,
& Webb, 2000).

2.2.2. Market Capitalization

REITs of different property sector are often classified based on the sizes; in which it is evaluated
according to a proxy known as the market capitalization (market cap). Market capitalization has long
been a component used to derive the returns of stocks in the sense that the size of the firm issuing
that particular stock is somewhat influential towards the returns (Colwell & Park., 1990). The
underlying question of the effect of firm size (market cap) to the returns of REITs remain unresolved
today. Nevertheless, market capitalization, as is demonstrated by past studies, is highly correlated with
REITs returns (Hishamuddin Mohd Ali, 2006). In addition to the aforementioned notion of returns as a
reliable measurement of performance, market capitalization, being an influential factor of returns is
thus, viewed as a significant determinant of the performance of REITs.

2.2.3. Book to market value

The book to market value (BMV) has been traditionally associated with the performance of stocks.
The significance of BMV in explaining the performance of REITs is linked to the adoption of it as a
determinant of the performance of securities in terms of returns (Datar, Naik, & Radcliffe., 1998). A
study by Chui, Titman, & Wei (2003) indicated that BMV proved to be an appropriate forecasting item
of future returns of stocks. The financial attributes of firms owning and managing REITs, including the
market capitalization, degree of financial leverage, as well as the BMV, played a vital role in
determining the performance behaviour of REITs (Yong, Allen, & Lim, 2009).

2.2.4. Leverage
Leverage ratio reflects the financing choice of an organization, as well as the capital raised by an
organization in establishing the financing structure. Degree of leverage employed by organizations are
subjected to fluctuations attributable to the change in need of debt levels, evidence from Lemmon,
Roberts, & Zender (2008) shows that the degree of leverage are in some organizations, relatively
consistent over the period. significance of levered REITs as opposed to unlevered REITs in affecting the
performance in terms of returns was displayed (Giacomini, Ling, & Naranjo, 2014). In this regard,
levered REITs demonstrated higher volatility as well as returns compared to unlevered REITs. Relative
to this finding, it was found that within levered REITs, those that are leveraged higher than the targeted
leverage level outperformed the lowly levered ones, which is coincidentally consistent with the notion
of the positive correlation between the degree of leverage and performance (Giacomini, Ling, &
Naranjo, 2015).

2.2.5. Beta
Beta coefficient translates to the international beta, which represents an indicator of the volatility
and systematic risk of a particular REIT in comparison to the nation’s REIT market as a whole. The
development of the beta coefficient is evident as it represents a component used in deriving the risk
premium of a security. Past research showing correlation between systematic risk and the
performance of REITs is evident in the work of Kok & Khoo (1995), which analysed the performance of
REITs in different periods classified into upward market, downward market, and over-speculated
market. The relationship between beta and REIT performance was concluded to be significant as the
changes of the beta coefficient of REITs

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 Analysis of M-REITs Performance Based on Financial Factors and the Degree of Specialization

3. Methodology/Materials

3.1. Overview
This chapter discussed in detail the methodology employed to examine the relationship between
each individual independent variable with the dependent variable. The research hypotheses are
assumptions made with association to the research objectives and research questions to indicate the
relationship between the performance of M-REITs and the degree of specialization, market
capitalization, book-to-market value, leverage, and beta.

3.2. Development of theoretical framework and hypotheses

Independent Variables Dedependent Variable

Degree of Specialization

Performance of
Market Capitalization
Malaysian REITs
(Funds From
Book-to-Market Value Operations)

Leverage

Beta

3.3. Hypothesis
Hypothesis 1, H1: The relationship between the degree of specialization and the performance of
M-REITs is significant.
Hypothesis 2, H2: The relationship between the market capitalization and the performance of M-
REITs is significant.
Hypothesis 3, H3: The relationship between the book-to-market value and the performance of M-
REITs is significant.
Hypothesis 4, H4: The relationship between the leverage and the performance of M-REITs is
significant.
Hypothesis 5, H5: The relationship between beta and the performance of M-REITs is significant.

3.4. Research Design

The primary aim of this research is to examine the relationship between the independent variables,
which are the firm-specific determinants and the dependent variable, represented by the performance
of M-REITs measured in terms of funds from operations through the means of hypothesis testing. A
quantitative approach is employed to arrive at the results of this research, which subsequently
provides a comprehension towards the relationship between the independent variables and the
dependent variable. The sample of this research is represented by the 18 listed real estate investment
trusts in Malaysia. These 18 listed M-REITs are namely AmFirst Real Estate Investment Trust, Axis Real
Estate Investment Trust, AmanahRaya Real Estate Investment Trust, Atrium Real Estate Investment
Trust, CapitaLand Malaysia Mall Trust, Al-`Aqar Healthcare REIT, Al-Salam Real Estate Investment Trust,
Tower Real Estate Investment Trust, Hektar Real Estate Investment Trust, IGB Real Estate Investment
Trust, KIP Real Estate Investment Trust, KLCC Real Estate Investment Trust, Pavilion Real Estate
Investment Trust, Amanah Harta Tanah PNB, YTL Hospitality REIT, MRCB-Quill REIT, Sunway Real Estate
Investment Trust, and UOA Real Estate Investment Trust

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 Haniza Hashim, Nur Baiti Shafee, Shadia Suhaimi, Siti Nurul Huda Mohd

4. Results and Findings

4.1. Descriptive Statistics

Table1: Model for Paper
Variables Observations Mean Std. Dev. Maximum Minimum
Market Cap 76 6.7871 1.1360 8.6557 4.5799
Leverage 77 3.9935 1.9536 8.6557 -4.0009
BMV 76 1.0610 0.2960 1.7080 0.0117
Beta 74 -17.042 54.6226 39.2361 -232.1161
SPEC 90 0.3333 0.4740 1 0

Based on table 1, due to the absence of data for certain firms in certain period of time, data
analysed were not on the original sample size of 90. Under market capitalization, only 76 observations
were recorded, the same number applies to the book-to-market value variable. As for leverage, 77
observations were recorded, whereas the beta variable only resulted in a record of 73 observations.
Data on the degree of specialization of the 18 Malaysian REITs in discussion were available for all firms
throughout the stipulated period which successfully resulted in a complete observation of 90. In terms
of the size of the firm represented by market capitalization, the mean of the market cap of the 18
Malaysian REITs in discussion amounted to 6.7871, while the standard deviation amounted to 1.1360,
with the maximum market cap going as high as 8.6557, and the lowest as low as 4.5799. The leverage
or gearing used registered a mean of 3.9935, while the standard deviation stands at 1.9536, with the
highest leverage used standing at 8.6557, and the lowest at -4.0009. As for the book-to-market value,
a mean of 1.0610 was identified, with the standard deviation standing amounting to 0.2960. The
maximum value of the book-to-market value of the sample was 1.708, and the minimum value at
0.0117. With regard to the beta, a negative mean of -17.0419 was resulted, with the standard deviation
value at 54.6226. A maximum value of the beta is 39.2361, while the minimum value going as low as -
232.1161. The degree of specialization on the other hand is of exception as the qualitative nature of
the data were quantified into 0 representing specialized and 1 representing diversified, hence the
insignificance of the mean of 0.3333 and standard deviation of 0.4740 generated.

4.2. Multicollinearity Test

Table 2. Multicollinearity Test
Market Cap Leverage BMV Beta Spec
Market Cap 1.0000
Leverage 0.2990 1.0000
BMV -0.6285 -0.1160 1.0000
Beta -0.2002 -0.1768 0.0989 1.0000
Spec -0.0579 -0.0602 -0.0827 0.0307 1.0000

The identification of a linear relationship among the independent variables in a model would render
multicollinearity evident. In this regard, the multicollinearity test is employed as a method for
detecting the existence of a relationship among the independent variables. Following the identification
of a relationship, the strength of the relationship is ascertained via the correlation matrix. In relation
to that, table 4.2 serves as a depiction to display the results of the application of the correlation matrix
on the model. With reference to table 4.2, the results of the correlation as well as the strength of
correlation between the independent variables in discussion, namely market capitalization, leverage,
book-to-market value, beta, and degree of specialization is shown.

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 Analysis of M-REITs Performance Based on Financial Factors and the Degree of Specialization

4.3. Hausman Test

Table 3. Hausman Test
Coefficients Difference Square Root
Variables
b B b-B V_b – V_B
Market Cap 0.4177 0.9005 -0.4827 0.4671
Leverage 0.1323 0.0545 0.0778 0.0574
BMV 0.1946 0.2427 -0.0481 0.5724
Beta -0.0001 -0.0003 0.0001 0.0006

The focal point of this research is on the degree of specialization and the financial factors that
determines the performance of Malaysian REITs throughout the period of 2012 to 2016, with a panel
data sample used for the assessment of Malaysian REITs performance over the specified time span.
With regard to this, the Hausman Test is employed to distinguish the nature of the panel data in terms
of whether it is of a fixed effect or a random effect. Based on table 3, considering that the p-value of
0.4291 is greater than the 0.05 (5%) significant level, it is concluded that the model is classified as a
Random effect Model.

4.4. Inferential Analysis

Table 4. Inferential Analysis
Independent Variable Coefficient Value p-value Correlation
Market Capitalization (MCAP) 0.9005 0.000 +, significant
Leverage (LEV) 0.0545 0.065 +, insignificant
Book-to-market Value (BMV) 0.2427 0.375 +, insignificant
Beta (BETA) -0.0003 0.518 -, insignificant
Degree of Specialization (SPEC) 0.1697 0.099 +, insignificant

Based on the fact and figures depicted by table 4.6, at the 5% level of significance, only the market
capitalization appeared to be significant to the performance of Malaysian REITs in terms of funds from
operations, while all other independent variables such as the leverage, book-to-market value, beta,
and degree of specialization are insignificant to said performance. This translates to the fact that only
market capitalization is relevant in affecting the performance of Malaysian REITs.

5. Conclusion

5.1. Findings
The positive and significant result of the market capitalization to the performance of M-REITs
indicate that for every increase in a unit of market capitalization, the funds from operations increases
by 0.9005 units, ceteris paribus. The implication of this is that as the establishment of M-REITs grows
larger in terms of market size which is measured by the market capitalization, the capacity to generate
cash purely from operations follows suit. In other words, the growth in funds from operations are
proportionate to the growth in market size. The significant effect of firm size to the performance of M-
REITs as is shown in the results of this study corresponds to the empirical findings of Hishamuddin
Mohd Ali (2006), McIntosh, Liang, & Tompkins (1991), Ambrose B. W. (2001) and Below, Stansell, &
Coffin (2000). The insignificant outcome of the leverage to performance shows that there is no
convincing evidence to indicate that the amount of debt used relative to the equity of a particular M-
REIT is influential on the fund generating capacity. This explicitly means that contrary to studies by
Fairchild, MacKinnon, & Rodrigues (2011) on REITs listed in the New York Stock Exchange, the adoption
of a high gearing ratio does not necessarily amplifies the funds generated from operations. Another
attributable reason by Ippolito, Filippo, Steri, & Tebaldi (2012) is that the effect of leverage on the

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 Haniza Hashim, Nur Baiti Shafee, Shadia Suhaimi, Siti Nurul Huda Mohd

funds from operations essentially depends on the deviation from the target leverage. Results of this
study showed no apparent significance between the book-to-market value and the funds from
operations. Empirical studies by Daniel, Hirshleifer, & Subrahmanyam (1998) have suggested that the
book-to-market value, associated to growth, often plays a role in determining the fund generating
capacity of a REIT, only when put in terms of returns. Therefore, this valuation variable of M-REITs,
according to the results of this study and findings by Datar, Naik, & Radcliffe (1998) is asserted to be
insignificant to the funds from operations unless expressed in the form of a return. Results also verified
that beta, a denotation of the systematic risk a particular M-REIT presents, plays no role in determining
the funds from operations generating capacity. Jahankhani & Lynge (1980) study on New York
Exchange listed REITs demonstrated that REITs with higher risk profile yielded higher dividends, which
is an outcome of higher fund generating capacity. However, under the context of this study, when
assessed exclusively on the funds from operations, results showed otherwise, which corresponds to
the findings of Delcoure & Dickens (2004) and Murthi, K.Choi, & Desai (1997).

5.2. Implications
The results of this study offer some insights into firm-specific factors and the performance of M-
REITs while defining the degree of impact these factors have on the performance of M-REITs evaluated
by the funds from operations. The findings provide researchers and readers an idea of the potential
impacts of financial factors and the degree of specialization on the performance of M-REITs in terms
of funds from operations. On an individual level, the attributes of a particular M-REIT which possesses
the capacity to generate adequate funds from operations is made known. In essence, this means the
trait for a well performing M-REIT. On an organizational level, the results offer some input into the
determination of a financial strategy for a certain M-REIT portfolio. Be that as it may, the results also
indicated that there are other aspects to factor in while employing the stipulated determinants in
assessing the performance of M-REITs. On a global context, the results of this research serve as a
comparison to other REITs of other countries. In this regard, the employment of the same variables
namely market capitalization, leverage, book-to-market value, beta, and the degree of specialization
has evidently resulted in a different outcome as opposed to REITs of other nations, namely America,
as was discussed under Chapter 2- literature review of this research. What was apparently significant
to the operations funds generating capacity of those REITs were insignificant in Malaysia.

5.3. Limitations
The absence or non-disclosure of data for certain years and for certain REITs which are unattainable
from the Bloomberg database as well as the financial statements narrowed the rightful observation
from 90 to 76. Additionally, due to the relatively new establishment of REITs in Malaysia, as well as the
small number of listed REITs, 18 to be exact, the information and data obtained are forced to be
limited. Hence, this may potentially be a source of distortion of results and subsequently the findings,
as opposed to a study on larger number and longer duration of REITs which have a long record of
establishment, as is seen in the case of REITs is developed economies. In terms of sample size, the
results are confined to the Malaysian context. It is worth noting that REITs of different countries
behave and perform distinctively. Therefore, the findings and implications of this research are only
meaningful in the Malaysian context. Any usage of the results of this research under a context besides
Malaysia can only be applied as a reference. Another limitation to this research is the exclusion or
omission of other relevant financial factors. The financial factors employed is this research, comprising
market capitalization, leverage, book-to-market value, and beta represents the most common and
extensively used financial factors or determinants when examining financial performance. This is said
with reference to empirical studies, hence the use of these variables. Nevertheless, there are in fact
other firm-specific factors which are influential towards the performance of REITs which are not
employed in the study. Additionally, the historical results employed may not be accurate in
determining future correlations.

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 Analysis of M-REITs Performance Based on Financial Factors and the Degree of Specialization

5.4. Recommendations
Future research can consider including more firm-specific variables or financial factors which are
influential on both the long-term and short-term performance of REITs regardless of the impact
magnitude of each variable. This is particularly so as to identify specifically the determinants which
impact the performance of REITs in Malaysia, which are further distinguished into long-term and short-
term. On top of that, future research can be geared towards the utilization of high frequency data
entailing monthly or quarterly data for the enhancement of robustness of the study. It is also
recommended that multiple proxies be adopted to enhance the robustness of the study. In this regard,
the set of determinants can be tested on various proxies to ascertain the validity of the effects they
have on the dependent variable. In relation to that, future studies pertaining to this topic could employ
a larger sample size or more observations by including sub samples comprising of unlisted REITs, which
are equally gaining popularity. Given the relatively new nature of REITs in Malaysia, data for a complete
decade is yet to be available. Nonetheless, the near future will mark the 10 year establishment of
Malaysian REITs, which would render future studies data of a longer time period for the attainment of
a more accurate analysis result. The relatively small sample size may be a contributory factor to data
constraints thus leading to potential unreliability. Additionally, other tests can be applied in future
studies to further verify and emerge with a more precise reliability measurement of the variables. On
another spectrum, a comparative analysis between the performance of Malaysian REITs and the
performance of REITs of another nation of the same economic status based on the same set of
variables can be carried out to identify whether the designated variables represent the only influential
factor or is the performance attributable to some other macro-level components.

5.5. Conclusion
Motivated primarily by the relatively new nature of Malaysian REITs, this study serves to
understand the relationship between firm-specific determinants and the financial performance of
Malaysian REITs. Specifically, the market capitalization, leverage, book-to-market value, beta, and the
degree of specialization are tested to assess the influential magnitude these variables have on the
performance of Malaysian REITs, measured in terms of funds from operations instead of the traditional
used proxies in the period of 2012 to 2016. Empirical studies on the said subject were scrutinized to
emerge with an in-depth comprehension of REITs. Following that, the research methodology which
demonstrates the methods of obtaining and analysing the data sample is shown. The panel data
regression model was applied, subsequently, the STATA software was used to run the analysis to arrive
at the results which are interpreted and presented under the findings. The results of the statistical
analysis suggested that market capitalization contributes significantly and positively to the
performance of Malaysian REITs, while the leverage, book-to-market value, beta, and degree of
specialization are statistically insignificant to the performance of the Malaysian REITs, not at least in
the sense of funds from operations.

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