Corporate Governance and Performance of Externally Managed Singapore Reits

This paper employs a new scoring framework designed by the Asia Pacific Real Estate Association (APREA) to examine the link between corporate performance and quality of corporate governance among externally managed REITs listed on the Singapore Stock Exchange (S-REITs). The empirical tests provide evidence supporting a positive correlation between corporate governance practices and stock performances. However, we find no positive correlation with operating performance proxied by accounting measures. In other words, S-REITs with higher corporate governance tend to register better risk-adjusted returns but do not outperform operationally. To test for market efficiency, the study shows that S-REITs with the best corporate governance practices also have less information asymmetry.