HK - Commercial Properties & REITs

[winston]

Hong Kong Office Rents, World’s Highest, Jump to Twice London’s

April 19 (Bloomberg) -- Hong Kong’s prime office rents, the world’s highest, jumped more than a third in 2010 with tenants paying almost double the cost in the City of London, according to Colliers International Research.

Prime office buildings in Hong Kong fetched $2,066.35 per square meter (11 square feet) as of Dec. 31, 2010, compared with $1,523.31 a year ago, Colliers said in its Global Office Real Estate Review.

London’s West End was the second-most expensive, costing $1,431.82 a square meter, while the City of London was fifth at $1,073.92 a square meter. Tokyo and Paris were in third and fourth place, at $1,130.21 and $1,099.53 respectively.

http://www.businessweek.com/news/2011-0 ... don-s.html

[winston]

Top-grade office rents set to soar 30pc as supply tightens by Karen Ha
Thursday, May 05, 2011

Jones Lang LaSalle foresees rent for grade A offices in Hong Kong rising 30 percent this year as supply remains tight.

Rental hikes in Kowloon East could outperform the rest of the city, rising as much as 45 percent this year to HK$30 per square foot from the current HK$23.

"The government included two sites in Kowloon East for public land sale, which shows that it is keen to boost the growing acceptance of Kowloon East as a commercial cluster," said Gavin Morgan, deputy managing director and head of leasing for the real estate firm.

In the next three years, Kowloon East is expected to provide around 2.2 million sq ft of grade A office space - about 43 percent of total supply for the period.

"But Kowloon East will only be a non-core commercial hub," he said. "The traditional central business district - Central and Admiralty - is likely to expand to Wan Chai and Causeway Bay."

Currently, grade A office rents in Wan Chai and Causeway Bay average HK$50 psf, while those in Central average HK$99.

"The building quality, infrastructure and amenities are all ready to go in Wan Chai and Causeway Bay. Companies migrating to the area need not worry about [compromising]," Morgan said, adding the rental gap between the central business district and the two emerging areas is likely to narrow in the future.

In the first four months, overall grade A rents in Hong Kong jumped 11.8 percent, while rents in Central climbed 13.3 percent.


http://www.thestandard.com.hk/news_deta ... 10505&fc=7

[winston]

Commercial Properties not sure thing ?

The HK$5m shop that turned out to be a wall

A woman who thought she was buying a HK$5 million ground-floor shop in Kowloon City turned out to have paid for only an external wall suspected of being an illegal structure.

Source: SCMP

Same story in the Standard HK:-

http://www.thestandard.com.hk/news_deta ... 10523&fc=1

[winston]

Not vested

Stock picks: We continue to prefer Hong Kong landlords over developers given the clearer picture in the office rental outlook than the residential market and lack of policy risks.

Among the landlords, we like Hongkong Land for its Central office portfolio, Hysan for its earnings uplift from Hysan Place completion and Swire (covered by Benjamin Lo) for its decentralized office portfolio.

Source: JPM

[winston]

The average rent for street-level shops in Hong Kong's four traditional shopping districts rose 7.4 percent in the second quarter, surpassing the record levels of mid-2008, according to a report by Colliers International Asia.


Source: SOUTH CHINA MORNING POST

[winston]

not vested

DJ MARKET TALK: HK Landlords Facing Double Whammy
- UOB KayHian

0925 [Dow Jones] The sharp fall in the stock market and increasing global economic uncertainty are taking a toll on the Hong Kong office market, says UOB KayHian.

It says the combination of falling rent and rising cap rate means that landlords' NAV will be under pressure, and given there are still a lot of uncertainties in the global scene that will directly affect how rents will move in Hong Kong as a financial hub, the house decides to use December 2011's NAV (which includes a 10% drop in office value in 2H11), instead of one-year forward NAV, to calculate its price target, using 2 standard deviations below historical mean discount to NAV to account for the forthcoming rental downturn.

Under such scenario UOB says Swire Pacific (0019.HK) and Hongkong Land (H78.SG) fare better, while Wharf (0004.HK) and Hysan (0014.HK) are least preferred.

Source: Dow Jones Newswire

[winston]

DJ MARKET TALK: HK Office Rents To Fall 20%-25% By End-2012 - UBS

1541 [Dow Jones] In light of the global economic downturn, UBS says it expects HK office rents to fall 20%-25% from current levels by the end of 2012, but this is still 15% above the trough in 2008-2009.

"We believe the low new supply and vacancy rates currently should provide better rental support than in the last crisis."

It tips rents in Tsim Sha Tsui and Island East to be more stable than core Central rents, as the large gap between office rents in Central and decentralized locations leaves Central vulnerable to economic downturns.

The house favors Wharf (0004.HK) for its exposure to retail and steady Tsim Sha Tsui office rents and believes Swire Pacific (0019.HK) will maintain pricing power in Island East office rents.

Source: Dow Jones Newswire

[winston]

RBS, Aon Move Staff Out of Hong Kong’s Central as Rents Soar by Kelvin Wong

Oct. 25 (Bloomberg) -- Global financial firms, including Royal Bank of Scotland Group Plc and Aon Corp., plan to move some operations out of Hong Kong’s Central business district, as a space shortage pushed up rents in the world’s most expensive city to lease offices.

RBS will give up two floors of more than 26,000 square feet in total at AIA Central and relocate some staff to the Taikoo Place complex in the Island East district, spokeswoman Lisa Irvine said in an e-mail.

Aon, the world’s largest insurance broker, will move its entire operation to the Causeway Bay area, according to three people with knowledge of the shift.

The prime office vacancy rate in Central fell 1.5 percentage points from two years ago to 4.25 percent in September as financial services firms expanded with no new supply added from 2007 to 2010, according to CB Richard Ellis Group Inc.

Rents in the district average about HK$120 ($15) per square foot a month, while those in Island East, about a 15- minute train ride away, are about HK$45, the Los Angeles-based broker said.

Accounting firm KPMG said in June it will relocate “a substantial proportion” of its front office staff in Central to Hysan Place in Causeway Bay when the building is finished next year.

Hong Kong is followed by London’s West End and Paris, with Tokyo in fourth place, Colliers said.

Allianz Global, the investment unit of Allianz SE, Europe’s largest insurer, in May moved from Cheung Kong Center to nearby Citibank Plaza, where average rents were about 30 percent lower at the time.

http://www.businessweek.com/news/2011-1 ... -soar.html

[winston]

Hong Kong Office Rents May Fall Up to 40%, Barclays Says BusinessWeek

By Kelvin Wong Oct. 26 (Bloomberg) -- Office rents in Hong Kong, the world's costliest place to lease commercial space, may fall as much as 40 percent over the next two years if China goes through an economic “hard landing,” said Barclays Capital.

http://www.businessweek.com/news/2011-1 ... -says.html

[winston]

not vested

DJ MARKET TALK: CLSA Keeps HK Office Landlords At Underweight

1449 [Dow Jones] CLSA keeps HK office landlords at Underweight, as hiring expectations have softened sharply and the first dip in office rents has just surfaced with more to come.

It notes the massive infrastructure development going on in HK may change the axis of the city in the long run, with the building of a central business district (CBD) II at Kai Tak redevelopment, with the bears arguing such development would hurt Central landlords by bringing pressure on office rents.

The house believes "the longer-term impact on Central office demand will be subject to whether the creation of CBD II along with other infrastructure upgrades will improve HK's competitiveness and generates incremental space demand exceeding the new space built."

Hysan (0014.HK) is up 1.7% at HK$24.15 and Swire (0019.HK) is up 0.8% at HK$92.05.

Source: Dow Jones Newswire