The Underpricing of Spanish REITs When Going Public

51 Pages Posted: 11 May 2020

See all articles by Leticia Castaño

Leticia Castaño

University of Valencia - Department of Accounting

José Emilio Farinós Viñas

Universitat de València - Department of Corporate Finance

Ana M. Ibáñez

University of Valencia - Department of Corporate Finance

Date Written: October 31, 2019

Abstract

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

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

Leticia Castaño

University of Valencia - Department of Accounting ( email )

Edificio Departamental Oriental
Avda. dels Tarongers, s/n
Valencia 46071
Spain

José Emilio Farinós Viñas (Contact Author)

Universitat de València - Department of Corporate Finance ( email )

Av. dels Tarongers s/n
Valencia, 46022
Spain
0034963828369 (Phone)
0034963828370 (Fax)

Ana M. Ibáñez

University of Valencia - Department of Corporate Finance ( email )

Facultat d'Economia
Av. dels Tarongers s/n
46022 Valencia
Spain

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