THE LONG-TERM PERFORMANCE OF AUSTRALIAN REIT IPOs.

Investor returns in new Australian Real Estate Investment Trust (A-REIT) listings appear to have underperformed the market on average by 30% over a three-year investment period. We examine whether certain firm and market characteristics help to explain the long-term performance of A-REIT initial public offerings (IPOs). The analysis is structured to test whether those variables known to investors prior to listing (publically available in prospectuses), could help predict the abnormal long-term return performance. Additionally, models utilizing after listing variables allowed for a comparative insight into long-term performance. The findings indicate that on average, larger A-REIT IPOs appear to perform better at the one-year performance period, while stapled A-REIT IPOs (those generally involved in property development activities) appear to per form more poorly at the three-year period. On average, larger A-REIT IPOs appear to perform better at the end of first year following listing. Furthermore, the Global Financial Crisis had a clear negative effect on the long-term return of newly listed A-REITs. [ABSTRACT FROM AUTHOR]