The effect of diversification on the performance of real estate investment trusts in Turkey

As a collective investment company, real estate investment trusts (REIT) are important institutions for both investors and the country's economy. Although they are subject to different establishment conditions and legislative provisions in each country, their main purpose is to bring together small savings and invest in large real estate projects. There are many investment opportunities that REITs can invest in, from housing to land, from tourism to commercial, from shopping malls to hotels. In this sense, the question of how much to invest in which real estate reveals the concept of diversification. Based on this, the aim of this study is to investigate the effect of property diversification on the performance of Turkish REITs. In this framework, panel data analysis was conducted for the period 2013Q1-2021Q1 of 18 REITs operating in Turkey. According to the results obtained, property type diversification has only a positive effect on the performance of Turkish REITs on return on equity (ROE).