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Economic Performance of Property Companies in Hong Kong

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  • Eddie Hui
  • Joseph OOI
  • Kelvin Wong

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.

Suggested Citation

  • Eddie Hui & Joseph OOI & Kelvin Wong, 2007. "Economic Performance of Property Companies in Hong Kong," Journal of Property Research, Taylor & Francis Journals, vol. 24(2), pages 139-157.
    • Handle: RePEc:taf:jpropr:v:24:y:2007:i:2:p:139-157
    DOI: 10.1080/09599910701440123
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    Cited by:

    1. Chen, Kun & Song, Yao-yao & Pan, Jiao-feng & Yang, Guo-liang, 2020. "Measuring destocking performance of the Chinese real estate industry: A DEA-Malmquist approach," Socio-Economic Planning Sciences, Elsevier, vol. 69(C).
    2. Yang, Guo-liang & Fukuyama, Hirofumi & Chen, Kun, 2019. "Investigating the regional sustainable performance of the Chinese real estate industry: A slack-based DEA approach," Omega, Elsevier, vol. 84(C), pages 141-159.
    3. Chia-Nan Wang & Hsien-Pin Hsu & Jing-Wein Wang & Yang-Chin Kao & Thi-Phuong Nguyen, 2020. "Strategic Alliance for Vietnam Domestic Real Estate Companies Using a Hybrid Approach Combining GM (1,1) with Super SBM DEA," Sustainability, MDPI, vol. 12(5), pages 1-23, March.

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