Performance of property companies in Hong Kong : a style analysis approach

This study analyzes the returns of publicly traded property companies using the style analysis approach. Our results show that the proportion of direct real estate has increased over time. This suggests that indirect and direct real estate are becoming closer substitutes for each other. Furthermore, the findings indicate that the performance of most property companies is not significantly different from the performance of the underlying implied portfolio before transaction costs are taken into account. This implies that the performance of a property company is mainly attributable to its investment style characterized by the implied portfolio rather than management skills.