A First Look at the Impact of the COVID-19 Pandemic on Spanish REITs

41 Pages Posted: 11 Jan 2022

See all articles by Leticia Castaño

Leticia Castaño

Universitat de València - Deparment of Corporate Finance

Miguel Arce Gisbert

University of Valencia - Department of Economics

José Emilio Farinós Viñas

University of Valencia - Department of Economics

Ana M. Ibáñez

University of Valencia - Department of Corporate Finance

Date Written: September 24, 2021

Abstract

This study analyses the impact of the COVID-19 pandemic on Spanish listed REITs during the first wave from both the stock market and the operating performance perspectives. First, we find that the Spanish stock market for REITs reacts with less intensity and later than the rest of the Spanish and worldwide REIT indexes. Moreover, we observe a significant negative abnormal return of our REIT index when the pandemic was declared (11 March 2020). This significant negative abnormal return extends during lockdown but becomes positive and significant during the de-escalation period. However, a firm-level analysis reveals that market prices do not reflect the impact of COVID-19 and in a multivariate analysis we find that, in general terms, market liquidity and the percentage of shares held by institutional investors are the only variables related to abnormal returns. Second, we observe a strong negative impact on the operating performance of REITs during the first half of 2020, regardless of the type of property and the incidence of COVID-19 by region according to the location of the assets.

Keywords: COVID-19, REIT, operating performance, Spanish market, event study

JEL Classification: G12, G14, I10, R30

Suggested Citation

Castaño, Leticia and Arce Gisbert, Miguel and Farinós Viñas, José Emilio and Ibáñez, Ana M., A First Look at the Impact of the COVID-19 Pandemic on Spanish REITs (September 24, 2021). Available at SSRN: https://ssrn.com/abstract=4005021 or http://dx.doi.org/10.2139/ssrn.4005021

Leticia Castaño

Universitat de València - Deparment of Corporate Finance ( email )

Av. dels Tarongers s/n
Valencia, Valencia 46022
Spain

Miguel Arce Gisbert

University of Valencia - Department of Economics ( email )

Av. dels Tarongers s/n
46071 Valencia
Spain

José Emilio Farinós Viñas (Contact Author)

University of Valencia - Department of Economics ( email )

Facultat d'Economia. Av. dels Tarongers s/n
València, 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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