Economic performance of property companies in Hong Kong

Chi Man Hui, Joseph T.L. OOI, Kelvin Wong

Research output: Journal article publicationJournal articleAcademic researchpeer-review

6 Citations (Scopus)

Abstract

This paper examines the economic performance of 16 property companies in Hong Kong, and how well they do in comparison with Singapore property companies. The results show that Hong Kong property companies that diversified into other sectors appeared to perform better than those focused solely in real estate. Property companies in Hong Kong generally achieved higher rate of returns on their capital invested than Singapore property companies. Government financial assistance for private homeownership is believed to play an important role in the relatively better performance of Hong Kong's companies, particularly after 1997. Meanwhile, firms in Hong Kong are exposed to higher weighted average cost of capital due to higher business risks, in addition to higher interest rate stemmed from a linked exchange rate system. On the whole, property companies in both Singapore and Hong Kong do not perform well from an Economic Value-Added (EVA) perspective, but this does not necessarily mean that they are poorly managed. The empirical results show that the performance of a company is influenced dramatically by profits generated from the sale of non-property assets.
Original languageEnglish
Pages (from-to)139-157
Number of pages19
JournalJournal of Property Research
Volume24
Issue number2
DOIs
Publication statusPublished - 1 Jun 2007

Keywords

  • Corporate strategy
  • Economic value added
  • Hong Kong
  • Real estate
  • Singapore

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Urban Studies

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