Consolidation within the Australian real estate investment trust sector : an evaluation of the impact on unitholder returns

Ratcliffe, Christopher, Dimovski, William and Keneley, Monica 2010, Consolidation within the Australian real estate investment trust sector : an evaluation of the impact on unitholder returns, Journal of property research, vol. 26, no. 4, pp. 283-307.

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Title Consolidation within the Australian real estate investment trust sector : an evaluation of the impact on unitholder returns
Author(s) Ratcliffe, Christopher
Dimovski, William
Keneley, Monica
Journal name Journal of property research
Volume number 26
Issue number 4
Start page 283
End page 307
Total pages 15
Publisher Routledge
Place of publication Abingdon, England
Publication date 2010-08-13
ISSN 0959-9916
1466-4453
Keyword(s) real estate investment trusts (REITs)
A-REITs
mergers
cumulative abnormal returns
abnormal returns
acquisitions
Summary Mergers and acquisitions within the Australian-real estate investment trusts (A-REITs) sector have become a noticeable trend in the last decade. Utilising
event study methodology, 36 successful A-REIT mergers and acquisitions
between January 1995 and December 2008 were examined. Both target and
bidding shareholders experience positive excess returns of 4.27% and 0.54%
respectively over the 41 day event window [−20, +20]. Analysis indicates that the
cumulative abnormal returns (CARs) for bidding firms are considerably greater
than previous research suggests. This study finds higher bidder CARs when scrip
or a combination of scrip and cash is used to finance the acquisition. We also find
that the relative size or the size of the acquirer have a positive and significant
impact on the excess returns of bidding A-REITs. This suggests that the
synergistic benefits from the acquisition are a result of economies of scale and
increased market power. There is also some evidence that the relative size and
method of payment influence the CARs of target firms during the event window.
Language eng
Field of Research 150403 Real Estate and Valuation Services
Socio Economic Objective 900299 Property, Business Support Services and Trade not elsewhere classified
HERDC Research category C1 Refereed article in a scholarly journal
HERDC collection year 2010
Copyright notice ©2009, Taylor & Francis
Persistent URL http://hdl.handle.net/10536/DRO/DU:30029940

Document type: Journal Article
Collections: Faculty of Business and Law
School of Accounting, Economics and Finance
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