Abstract
Listed property performance has been shown to be influenced by several macroeconomic and firm-specific financial factors. These factors, however, vary by country and the sort of underlying properties in which each listed property company invests in. Although research on the impact of macroeconomic factors on the performance of listed property companies has previously been conducted, there is limited research in South Africa, particularly those that incorporate financial factors. Therefore, this study aims to investigate the impact of macroeconomic and financial factors on the performance of the South African listed property industry. The study examines the relationship between macroeconomic factors and the SAPY index return and the relationship between macroeconomic and financial factors and Real Estate Investment Trusts (REITs) share prices. Two different statistical models were employed, with the multiple regression used to examine the relationship between macroeconomic factors and the SAPY index return, while the Generalised Method of Moments (GMM) was used as the preferred panel regression model to examine the relationship between both macroeconomic and financial factors and REIT share prices.
The study found a positive but insignificant relationship between the SAPY index return and the GDP growth rate. The unemployment rate and interest rate were found to have a negative and significant relationship with the SAPY index return. Furthermore, when it came to macroeconomic factors, inflation rate, GDP growth rate, and unemployment rate were found to have a positive relationship with REIT share prices, whereas interest rate was found to have a negative relationship. For financial factors, the study found a positive but insignificant relationship between the debt-to-equity ratio and the REIT share price, whereas the Return on equity was found to have a positive and significant relationship with the REITs share prices.