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Financial performance and operating strategies of Malaysian property development companies during the global financial crisis

Toong Khuan Chan (Faculty of Architecture Building and Planning, The University of Melbourne, Melbourne, Australia)
Abdul-Rashid Abdul-Aziz (School of Housing, Building and Planning, Universiti Sains Malaysia, Georgetown, Malaysia)

Journal of Financial Management of Property and Construction

ISSN: 1366-4387

Article publication date: 7 August 2017



The purpose of this paper is to characterise the financial performance and to identify the operating strategies of property development companies in Malaysia during the 2008 global financial crisis (GFC).


The research approach includes a comprehensive analysis of the financial statements and annual reports of 35 property development companies listed on the Kuala Lumpur stock exchange. The financial statements were analysed to evaluate the financial performance of these companies and to assess the severity of the impact of the GFC on revenues and profits. The operating strategies were determined from a content analysis of the statement to shareholders.


An aggregated analysis of the financial performance indicates a 23 per cent decline in net profit in 2008. Classifying these companies into two separate sets of distressed and non-distressed companies showed that poor financial performance and a high debt-to-equity ratio pre-GFC led to continuing poor performance during the GFC period and beyond. Survival strategies adopted by distressed companies include the disposal of assets to improve cash flow, refinancing loans, delaying the launch of new projects and reducing their workforce. Non-distressed companies adopted growth strategies such as purchasing land for development, focusing their offerings towards high-end products, vertically integrating and diversification.

Practical implications

The increased understanding of the financial performance and operational strategies will allow managers of property development companies to improve financial management and adopt appropriate strategies in response to the impact of future financial distress.


The study presented in this paper is the first to analyse the financial performance of Malaysian public-listed property development companies during the period of the 2008 GFC and to link their financial performance to operational strategies.



The authors gratefully acknowledge the support of the National Real Estate Research Coordinator Centre at the National Institute of Valuation Malaysian (INSPEN). The views expressed here are those of the authors and do not necessarily represent the views of the INSPEN. They thank the editor and three anonymous reviewers for their constructive comments, which helped them to improve the manuscript.


Chan, T.K. and Abdul-Aziz, A.-R. (2017), "Financial performance and operating strategies of Malaysian property development companies during the global financial crisis", Journal of Financial Management of Property and Construction, Vol. 22 No. 2, pp. 174-191.



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