REITS in Turkey: the impact of the deviations from the global systems

Yönder, Erkan
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.


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Citation Formats
E. Yönder, “REITS in Turkey: the impact of the deviations from the global systems,” Ph.D. - Doctoral Program, Middle East Technical University, 2015.