The Underpricing of Spanish REITs When Going Public

This study analyses underpricing in a sample of 41 Real Estate Investment Trusts (REITs) from the Spanish market between November 2013 and January 2019. The results show a significant underpricing on the initial-day (either when we compute raw or market-adjusted initial returns) concentrated in the primary market. Besides, price adjustment continues until the third day as we find significant raw and market-adjusted buy-and-hold returns. This underpricing is not accounted for by the theories of information asymmetry but instead by some signalling theories related to capital structure, by the pre-listing stock market conditions and by the peculiarities of the market analysed.

Keywords: REIT, going public, underpricing, Spanish market

JEL Classification: G12, G14, G23, G24

Suggested Citation: Suggested Citation

Castaño, Leticia and Farinós Viñas, José Emilio and Ibáñez, Ana M., The Underpricing of Spanish REITs When Going Public (October 31, 2019). Available at SSRN: https://ssrn.com/abstract=3577594 or http://dx.doi.org/10.2139/ssrn.3577594