Sponsored REITs in Asia Show Low Conflict of Interest Levels.
The study looked at agency costs in real estate investment trusts (REITs) in Singapore, Hong Kong, and Japan. These markets use the external REIT model tied to a sponsor. The research found that agency costs in these sponsored REITs are not as severe as in more mature markets or real estate operating companies in the same countries. This suggests that sponsored REITs in these Asian markets are similar to internally advised REITs due to market pressures.