Abstract

In this paper, we examine the impact of corporate governance on the performance of externally managed real estate investment trusts (REITs) in Singapore (S-REITs) from 2008 to 2012 using the Corporate Governance Index (CGI) developed by the Asia Pacific Real Estate Association (APREA). We employ the generalized method of moments (GMM) method, which is more robust compared to previous studies that used pooled ordinary least squares (OLS) and panel data. The results indicate that corporate governance has a significant impact on return on assets (ROA) and excess returns of S-REITs even though S-REITs are in a highly regulated industry. The results further indicate that individual corporate governance influences and affects the value of S-REITs. In addition, the findings also indicate that the S-REIT board of directors could mitigate and curtail related party transactions, which would have significant impact on the excess returns of S-REITs.