Reits in Turkey: The impact of the deviations from the global systems

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Tezin Türü: Doktora

Tezin Yürütüldüğü Kurum: Orta Doğu Teknik Üniversitesi, İktisadi ve İdari Bilimler Fakültesi, İktisat Bölümü, Türkiye

Tezin Onay Tarihi: 2015

Öğrenci: ERKAN YÖNDER

Danışman: ERKAN ERDİL

Özet:

This dissertation aims to evaluate the impacts of divergence of Turkish Real Estate Investment Trust (REIT) sector/industry from the global REIT markets. Turkish REITs do not have to pay out any certain level of income to shareholders and have a sponsored ownership structure, governed by regulations different from the global REITs, while they are still tax-exempted. The dissertation investigates the tax arbitrage, impacts of corporate governance issues such as board composition and sponsor ownership on the corporate financial performance of Turkish REITs. I find a significant market value increase for lead stakeholders around REIT IPOs highly likely due to tax arbitrage. Tax arbitrage arises from the tax exemption without any mandatory payout rule. I also find that REITs with larger board size, more independent members and higher non-sponsor ownership exhibit better financial performance. There is also a nonlinear relation between lead stakeholder ownership and operating performance. Additionally, operating performance worsens if the lead stakeholder is government-backed corporation or a bank. Depending on the findings of this dissertation, I make policy implications such as implementing mandatory payout rule and limiting the business relation between the lead stakeholders and the REITs.