HK - Commercial Properties & REITs

[winston]

CS expects a 10% drop in residential prices in 2012 , while office and retail rents are expected to fall 25% and rise 10%, respectively.

Source: Dow Jones Newswire

[winston]

not vested

DJ MARKET TALK: Macquarie Prefers HK Land, Wharf Over Swire Pacific

1446 [Dow Jones] STOCK CALL: Macquarie says Swire Pacific (0019.HK) is trading at about a 28% discount to its NAV, and its core Hong Kong investment property portfolio continues to perform well, despite the deteriorating economic environment and weak equity markets which are putting pressure on rents.

It keeps its Outperform call with a HK$128.90 target, but continues to prefer Hongkong Land (H78.SG) and Wharf (0004.HK) among the Hong Kong landlords.

Swire Pacific bounces 0.3% to HK$92.80 after Wednesday's 1.5% knee-jerk fall to news that its spin-off of Swire Properties (0962.HK) is approved and Swire Properties will start trading on Jan. 18.

Source: Dow Jones Newswire

[winston]

not vested

Steady dividend-payer LINK Reit (0823) is still the best place to park your surplus funds.

For higher dividends look at Fortune REIT (0778) which owns more than 16 local malls.

Source: Dr. Check, The Standard HK

[winston]

Prime office rentals set to slide further by Victor Cheung
Wednesday, February 08, 2012

Office rents in Central will drop another 15 percent this year after falling for five consecutive months as financial institutions rent less space, a top realtor says.

"Financial institutions are looking to reduce occupancy by, say, consolidating offices in one place," said Paul Yien Wei-ching, national director of office leasing at Jones Lang LaSalle.

And landlords keen to retain tenants are reducing the asking rents.

Vacancies will remain below 5 percent, JLL predicts, because of tight supply in the prime business area.

Average annual rents in Central was US$1,666 (HK$12,918) per square meter in the fourth quarter, or HK$100.60 per square foot per month.

http://www.thestandard.com.hk/news_deta ... 20208&fc=4

[winston]

not vested

DJ MARKET TALK: BofA-ML Turns More Selective On HK Landlords

0926 [Dow Jones] Bank of America-Merrill Lynch says it's turning more selective on Hong Kong landlords after recent rally, noting HK landlord stocks are up 16.7% year-to-date, and are now trading at less than 1 standard deviation wider than historical average discount to NAV.

"Recent events have reinforced our confidence that retail spot rents will stay resilient, but we remain cautious on central office spot rents."

The house downgrades Hysan (0014.HK) to Neutral from Buy but raises its target to HK$33.50 vs HK$29.00; the stock is indicated to rise 1.2% to HK$30.50 at pre-open.

Its order of preference is Wharf (0004.HK), Hysan (0014.HK), Swire (0019.HK) and HK Land (H78.SG).

Source: Dow Jones Newswire

[winston]

Hong Kong, Singapore Office Rents to Drop at Least 15%, JLL Says By Nichola Saminather

Hong Kong and Singapore commercial property rents and prices will drop by more than 15 percent in 2012 as financial services companies keep a lid on growth or shrink, according to Jones Lang LaSalle Inc. (JLL)

Hong Kong rents will drop by 15 percent this year and prices by 16 percent, while Singapore rents will fall 11 percent and values 20 percent, Alastair Hughes, Asia-Pacific chief executive officer of the world’s second-biggest publicly traded commercial-property broker, said at a presentation in Sydney.

http://www.businessweek.com/news/2012-0 ... t-jll-says

[winston]

Fall may be over for Central office rents

Office rents in Central may have bottomed out as lower rents drive demand for space, according to an analyst.

"As markets correct downwards we generally see tenants jockeying for position before the bottom is reached. This is because the rent becomes sufficiently attractive and the desire to secure better office space takes over," said Edward Farrelly, CBRE head of research, Hong Kong, Macau and Taiwan.

"While lower market rents may be achieved further along the cycle, the type of space currently on offer in the best buildings may not then be available."

During the first quarter, office rents overall fell by more than 3 percent.

Average rents in Central fell by more than 15 percent from the peak of July 2011.

In Kowloon on the other hand, rents gained by 2 percent in the first quarter, thanks to increased demand, which also pushed down vacancy levels.

Demand for office space in Kowloon East is likely to keep rising, Farrelly said.

http://www.thestandard.com.hk/news_deta ... 20412&fc=7

[winston]

Office rents may tumble 10pc by Natalie Ngan

Local office rentals could fall 5-10 percent while the growth in retail rents may ease during the second half amid bearish prospects for the global economy, real-estate consultancy DTZ Debenham Tie Leung forecast yesterday.

"Office leasing has been generally quieter since mid-April as the euro zone crisis entered a new phase of uncertainty with the recent developments in Greece," said Alva To Yu-hung, DTZ head of consulting, North Asia.

During the second quarter, overall office rentals in the SAR fell by 8.82 percent from a year back to HK$62 psf.

Rents in the Central Business District had the steepest fall with monthly rentals plunging 18.13 percent from a year ago to HK$131 psf during the April to June period.

On the upside, DTZ expects office rentals in Kowloon East to increase steadily in the second half as more high-quality office buildings are completed and more companies move away from the CBD, To said.

Office rents in Kowloon East are now at HK$31 psf per month. During the three months ending June, vacancy rates were the highest in Central and Admiralty at 6.4 percent, followed by Kowloon East at 6 percent.

The outlook on retail rentals is less bullish than before, but thanks to the continuing flow of mainland shoppers they are tipped to rise.

http://www.thestandard.com.hk/news_deta ... 20620&fc=4

[winston]

Central office rents fall as Kowloon East rises by Natalie Ngan

Office rents in Central fell 7 percent during the first half from a year ago, Jones Lang LaSalle said yesterday.

Rentals in Kowloon East, however, rose steadily from January to June.

"Offices are relocating out of Central due to the lack of suitable space, hike in rents, technological advancements and infrastructure improvements," said Marcos Chan, national director and head of research at Jones Lang LaSalle.

The global property services agency released a paper on how the local Grade-A office market is being affected by rising yuan deposits and the Closer Economic Partnership Arrangement between between Hong Kong and the mainland.

"A major driving force for office demand will be the development of Hong Kong as an offshore yuan market," Chan said.

The banking and finance sector makes up 56 percent of Grade-A office tenants in Hong Kong.

An additional demand for six million square feet of office space may emerge by 2020 from the banking and finance sectors if they continue steady growth.

But Central can only supply 3.5 million sq ft of office space during the next decade. Meanwhile, many multinational banks have begun to relocate their offices out of Central.

A case in point is Morgan Stanley, which has relocated from offices of 200,000 sq ft, divided between Exchange Square and The Landmark, to a 490,000 sq ft office in West Kowloon's International Commerce Centre.

Chan thinks Kowloon East is necessary and he expects that area to become as large as Central by 2020, reaching 54 million sq ft.

"We don't see a need for banks to expand now and some may need less space than before. In the long term, such a need may increase," Chan said.

Real-estate sector advisers Debenham Tie Leung said demand for local office space and rentals are likely to remain subdued until the global economic situation stabilizes.
http://www.thestandard.com.hk/news_deta ... 20712&fc=7

[winston]

Investors switch from offices to estate malls

Hong Kong property investors have shifted their focus from grade A offices and prime retail space, to shopping malls in non-core locations, in response to rising prices in the city's main commercial.

Source: SCMP