TECHNICAL, SCALE AND MANAGERIAL EFFICIENCIES IN MALAYSIAN REITS: A NON-PARAMETRIC APPROACH

The paper examined technical, managerial and scale efficiencies scores of Malaysian Real Estate Investment Trust (M-REITs). A non-parametric approach of VRS-DEA examined the input and output variables to determine REIT efficiency. We examined their determinants using GLS regression in the second stage. On average, the M-REIT industry has faced technical inefficiency, that involves scale and managerial inefficiencies. This paper presents new estimates through discussion on return as REIT output. The empirical results indicate Islamic REITs exhibited higher efficiency scores than their counterparts. The results from GLS regression analysis suggest that efficient REITs are smaller in size with higher concentration in property sector and geographical area. Having examined these values, there is still some catching-up for the inefficient REITs in the sample to be more competitive to stay relevant in the global market.