32
Page 1 ed JS / sa- AH Central value Chinese demand continues to support Central office leasing market Tender of the Murray Road car-park building site in the spotlight Chinese demand continues to support Central’s office leasing market. According to Jones Lang LaSalle, office vacancy in Central stayed low at 1.5% as at end of March 2017. Limited space available for lease led to subdued leasing activities. China-based companies remain the key source of leasing demand for prime offices in Central. For example, CMB International Capital reportedly has agreed to take up two floors totalling more than 30,000 square feet (sf) at Three Garden Road in Central, which was previously occupied by Citibank. This represents some 50% of space surrendered by Citibank. CMB International Capital will consolidate its operations across different locations into this Grade A office building. Since the lease will only commence in the second half of 2017, the occupancy at Three Garden Road is anticipated to retreat to the low 90s in June 2017. But landlord Champion REIT should enjoy rental uplift of 35-40% upon re- letting the space to CMB International Capital. Overall, Central office rents grew c.2%in 1Q17 after rising 9.7% in 2016, according to Jones Lang LaSalle. Tender of the Murray Road car-park building site in the spotlight. Located near Hutchison House and Central MTR Station, this site will be the first office site in Central offered for sale in two decades. It will provide total gross floor area of 465,000sf upon completion. In view of its superb location and limited new office supply in the CBD, this prime office site is anticipated to attract tremendous interest from local and overseas property developers as well as Chinese enterprises. In the recent years, Chinese-based corporates have shown strong appetite to buy trophy office assets in Hong Kong on an en bloc basis for own occupation. In our view, this tender should provide an excellent opportunity for these institutions to develop an office tower for own use. As a result, fierce competition is well expected. Based on an assumed average monthly office rent of HK$140 per square foot (psf) upon completion and cap rate of 2.5%, we forecast that the site will go for HK$21.5bn or HK$46,257psf. Encouraging tender results may prompt the revaluation of office properties in Central/Admiralty. Hongkong Land, Cheung Kong Property, Champion REIT and Swire Properties stand to benefit given their office exposure in these locations. HSI: 24,476 ANALYST Jeff YAU CFA, +852 2820 4912 [email protected] Ian CHUI +852 2971 1915 [email protected] Three Garden Road Source: Champion REIT Murray Road Car Park building Source: DBS Vickers DBS Group Research . Equity 8 May 2017 China / Hong Kong Monthly Chart Book HK Property (Issue No. 87) Refer to important disclosures at the end of this report

China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

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Page 1: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

Page 1

ed JS / sa- AH

Central value Chinese demand continues to support Central office

leasing market

Tender of the Murray Road car-park building site in the

spotlight Chinese demand continues to support Central’s office leasing market. According to Jones Lang LaSalle, office vacancy in Central stayed low at 1.5% as at end of March 2017. Limited space available for lease led to subdued leasing activities. China-based companies remain the key source of leasing demand for prime offices in Central. For example, CMB International Capital reportedly has agreed to take up two floors totalling more than 30,000 square feet (sf) at Three Garden Road in Central, which was previously occupied by Citibank. This represents some 50% of space surrendered by Citibank. CMB International Capital will consolidate its operations across different locations into this Grade A office building. Since the lease will only commence in the second half of 2017, the occupancy at Three Garden Road is anticipated to retreat to the low 90s in June 2017. But landlord Champion REIT should enjoy rental uplift of 35-40% upon re-letting the space to CMB International Capital. Overall, Central office rents grew c.2%in 1Q17 after rising 9.7% in 2016, according to Jones Lang LaSalle.

Tender of the Murray Road car-park building site in the spotlight. Located near Hutchison House and Central MTR Station, this site will be the first office site in Central offered for sale in two decades. It will provide total gross floor area of 465,000sf upon completion. In view of its superb location and limited new office supply in the CBD, this prime office site is anticipated to attract tremendous interest from local and overseas property developers as well as Chinese enterprises. In the recent years, Chinese-based corporates have shown strong appetite to buy trophy office assets in Hong Kong on an en bloc basis for own occupation. In our view, this tender should provide an excellent opportunity for these institutions to develop an office tower for own use. As a result, fierce competition is well expected. Based on an assumed average monthly office rent of HK$140 per square foot (psf) upon completion and cap rate of 2.5%, we forecast that the site will go for HK$21.5bn or HK$46,257psf. Encouraging tender results may prompt the revaluation of office properties in Central/Admiralty. Hongkong Land, Cheung Kong Property, Champion REIT and Swire Properties stand to benefit given their office exposure in these locations.

HSI: 24,476 ANALYST Jeff YAU CFA, +852 2820 4912 [email protected]

Ian CHUI +852 2971 1915 [email protected]

Three Garden Road

Source: Champion REIT

Murray Road Car Park building

Source: DBS Vickers

DBS Group Research . Equity 8 May 2017

China / Hong Kong Monthly Chart Book

HK Property (Issue No. 87) Refer to important disclosures at the end of this report

Page 2: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 2

TABLE OF CONTENTS

Share price performance 3 

What were the transaction trends in primary and secondary markets? 9 

What are the factors affecting residential demand and supply? 11 

What projects were launched? 13 

Where are the upcoming projects? 14 

How about the office market? 15 

How about the retail market? 16 

What did corporates do? 18 

Discount to NAV – Property developers & investors 20 

Discount to NAV band – Property developers & investors 23 

Price to book NAV band - REITs 26 

Historical yield band - REITs 27 

Any important dates to look out for? 28 

Our past publications 29 

Page 3: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 3

Share price performance

Property developer index vs HSI Property developer index vs HSI (6 month)

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HK property developers share price index HSI

Rebased (01 Jan 01 = 100)

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HK property developers share price index HSI

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Property investor vs HSI Property investor index vs HSI (6 month)

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REIT vs HSI REIT index vs HSI (6 month)

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70 75 80 85 90 95

100 105 110 115

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/16

Dec

/16

Jan/

17

Jan/

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Feb/

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Mar

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REITs share price index HSI

Rebased (04 Nov 16 = 100)

Source: Thomson Reuters; DBS Vickers

Page 4: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 4

Valuation – Property developers

Disc . t o

M k t L ast 12- m PE PE Dec - 17 Dec - 17 Y ield Y ieldCompany Code F Y E Cap Pric e t arget Rec om F Y 17 F Y 18 NA V NA V F Y 17 F Y 18

HK $bn HK $ HK $ x x HK $ % % %

Cheung Kong Property 1113 HK Dec 211 56.20 62.10 BUY 11.8 n.a. 95.5 (41) 2.8 n.a.

Henderson Land 12 HK Dec 176 48.40 49.85 HOLD 11.7 15.4 83.1 (42) 3.2 3.2

K Wah Int'l 173 HK Dec 15 4.90 5.54 BUY 9.1 3.9 12.3 (60) 3.7 3.7

Kerry Props 683 HK Dec 41 28.70 30.60 BUY 7.9 11.1 76.6 (63) 3.8 3.8

Lai Sun Dev 488 HK J ul 6 0.201 0.247 BUY 25.5 7.0 0.6 (67) 0.9 0.9

MTR Corp 66 HK Dec 266 45.10 39.50 HOLD 30.8 31.1 46.2 (2) 7.3 2.4

New World Dev 17 HK J un 92 9.45 11.26 BUY 10.5 11.4 22.5 (58) 4.7 4.7

Sino Land 83 HK J un 82 13.00 14.50 BUY 15.9 16.6 24.1 (46) 3.9 3.9

SHKP 16 HK J un 338 116.60 124.3 BUY 13.5 11.8 207.2 (44) 3.4 3.5

Tai Cheung 88 HK Mar 5 7.49 8.52 BUY 30.8 9.6 21.3 (65) 4.0 4.0

Wheelock & Co. 20 HK Dec 121 59.50 60.00 BUY 11.1 10.3 75.1 (21) 2.2 2.2

Wing Tai Properties 369 HK Dec 7 5.14 6.45 BUY 13.4 11.1 16.1 (68) 3.5 3.5

^

^ Included proposed special dividend

Source: Thomson Reuters, DBS Vickers

Valuation – Property investors

Disc . t o

M k t Last 12- m PE PE Dec - 17 Dec - 17 Y ield Y ieldCompany Code F Y E Cap Price t arget Recom F Y 17 F Y 18 NA V NA V F Y 17 F Y 18

HK $bn HK $ HK $ x x HK $ % % %

Hang Lung Props 101 HK Dec 86 19.22 18.00 HOLD 17.0 16.7 32.7 (41) 3.9 3.9

HK Land @ HKL SP Dec 18 7.72 8.51 BUY 20.6 20.2 12.2 (36) 2.5 2.6Hysan Dev 14 HK Dec 38 36.45 32.10 HOLD 15.9 16.2 64.2 (43) 3.7 3.7

Swire Props 1972 HK Dec 149 25.45 26.70 BUY 19.1 19.9 41.1 (38) 2.8 2.8Wharf 4 HK Dec 199 65.75 64.00 HOLD 13.6 12.8 91.5 (28) 3.4 3.4

@ denominated in USD

Source: Thomson Reuters, DBS Vickers

Valuation –Diversified Properties

Disc . t o

M k t Last 12- m PE PE Dec - 17 Dec - 17 Y ield Y ieldCompany Code F Y E Cap Price t arget Recom F Y 17 F Y 18 NA V NA V F Y 17 F Y 18

HK $bn HK $ HK $ x x HK $ % % %

Far East Consortium 35 HK Mar 9 3.83 3.88 BUY 8.2 5.9 11.1 (65) 4.4 4.4

Great Eagle 41 HK Dec 26 38.40 36.30 HOLD 14.5 14.4 72.6 (47) 2.0 2.0

Source: Thomson Reuters, DBS Vickers

Page 5: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 5

Valuation – REITs

M k t Last 12- m Y ield Y ield Y ield Price/

REIT Code F Y E Cap Pric e T arget Recom F Y 16A F Y 17F F Y 18F BVHK $m HK $ HK $ % % % (x )

Champion REIT* 2778 HK Dec 29,176 5.02 4.82 BUY 4.6 4.7 4.7 0.58

Fortune REIT* 778 HK Dec 17,128 8.99 10.56 BUY 5.5 5.8 n.a. 0.70

Hui Xian REIT@^ 87001 HK Dec 17,100 3.12 n.a. NR 9.0 8.6 8.7 0.54

J inmao Investments* 6139 HK Dec 8,160 4.08 4.22 HOLD 8.0 7.8 8.1 1.01

Langham Hospitality^ 1270 HK Dec 6,611 3.18 n.a. NR 8.0 7.0 7.0 0.56

New Century REIT^ 1275 HK Dec 2,331 2.45 n.a. NR 13.3 7.1 n.a. 0.85

Prosperity REIT* 808 HK Dec 4,649 3.18 3.52 Hold 5.6 6.2 n.a. 0.65

Regal REIT^ 1881 HK Dec 7,427 2.28 n.a. NR 6.8 7.8 n.a. 0.55

Spring REIT^ 1426 HK Dec 4,067 3.25 n.a. NR 7.1 6.7 6.7 0.51

Sunlight REIT* 435 HK J un 8,015 4.89 4.93 HOLD 5.0 5.1 5.5 0.59

Link REIT* 823 HK Mar 123,264 55.70 53.10 HOLD 3.7 4.0 4.2 0.98

Yuexiu REIT^ 405 HK Dec 13,418 4.57 n.a. NR 6.1 6.5 6.7 0.82

@ denominated in RMB ^ DPU based on consensus Source: Thomson Reuters, *DBS Vickers

Page 6: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 6

Trading range comparison – Property developers and investors

LastPrice

F Y17FP/E atHighPrice

F Y17FP/E at

LowPrice

Discountto NA Vat High

Price

Discountto NA Vat Low

PriceHighPrice

LowPrice

HighPrice

LowPrice

HighPrice

LowPrice

HK$ x x % % HK$ HK$ HK$ HK$ HK$ HK$

Property dev elopersCK Property 1113 HK 56.20 11.9 10.7 -40% -46% 56.35 50.80 56.35 50.80 56.35 53.10

Henderson Land 12 HK 48.40 12.1 10.4 -40% -48% 50.05 42.80 50.05 44.75 50.05 48.40K Wah Int'l 173 HK 4.90 9.9 7.2 -55% -67% 5.34 3.90 5.34 4.37 5.34 4.90

Kerry Properties 683 HK 28.70 8.3 6.1 -60% -70% 30.00 22.05 30.00 24.45 30.00 28.00Lai Sun Dev 488 HK 0.201 28.2 20.7 -64% -73% 0.22 0.16 0.22 0.19 0.22 0.20

MTR Corp 66 HK 45.10 31.0 27.2 3% -10% 45.45 39.80 45.45 41.05 45.45 43.75New World Dev 17 HK 9.45 11.4 10.0 -53% -59% 10.22 8.99 10.08 9.45 9.94 9.45

Sino Land 83 HK 13.00 17.1 15.4 -42% -48% 13.98 12.60 13.98 12.88 13.76 12.88SHKP 16 HK 116.60 13.9 12.5 -41% -47% 119.30 108.00 119.30 112.00 119.30 115.00

Tai Cheung 88 HK 7.49 30.8 29.0 -65% -67% 7.49 7.05 7.49 7.05 7.49 7.08Wheelock & Co 20 HK 59.50 12.0 8.9 -15% -37% 63.90 47.45 63.90 50.85 63.90 59.50

Wing Tai Properties 369 HK 5.14 14.4 12.5 -66% -71% 5.55 4.81 5.55 5.14 5.55 5.14

Property inv estorsHang Lung Props 101 HK 19.22 18.3 17.0 -37% -41% 20.75 19.22 20.75 19.22 20.75 19.22

HK Land^ HKL SP 7.72 21.0 18.0 -31% -41% 7.85 6.73 7.85 6.84 7.85 7.60Hysan Dev 14 HK 36.45 16.1 15.1 -44% -48% 36.85 34.55 36.85 35.00 36.85 35.60

Swire Properties 1972 HK 25.45 19.7 16.6 -35% -45% 26.15 22.10 26.15 23.65 26.15 24.55Wharf 4 HK 65.75 14.3 11.9 -26% -38% 69.00 57.35 69.00 61.65 67.35 65.65

Div ersif ied Propert ies

Far East Consortium 35 HK 3.83 8.2 7.2 -65% -69% 3.84 3.36 3.84 3.49 3.84 3.52Great Eagle 41 HK 38.40 14.9 13.2 -46% -52% 39.20 34.75 39.20 36.45 39.20 37.05

Sector A v erageDev elopers 16.7 14.2 -33% -41%Inv estors 17.9 15.7 -32% -42%Div ersif ied Propert ies 11.5 10.2 -51% -57%Hang Seng Index 9.1 8.5

- - Last 3 month - - - - Last 3 month - - - - Last 3 month - - - - Last 1 month - -- - Last 2 month - -

^ denominated in USD

Source: Thomson Reuters; DBS Vickers

Page 7: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 7

Trading range comparison – REITs

LastPrice

F Y17FDiv y ield

at HighPrice

F Y17FDiv

y ield atLowPrice

P/BV atHigh Price

P/BV atLow Price

HighPrice

LowPrice

HighPrice

LowPrice

HighPrice

LowPrice

HK$ % % x x HK$ HK$ HK$ HK$ HK$ HK$

REIT s

Champion REIT 2778 HK 5.02 4.7 5.6 0.59 0.49 5.06 4.22 5.06 4.41 5.06 4.84

Fortune REIT 778 HK 8.99 5.7 6.1 0.72 0.67 9.17 8.53 9.10 8.53 9.10 8.92

Hui Xian REIT@ 87001 HK 3.12 8.4 8.8 0.55 0.52 3.19 3.06 3.19 3.06 3.12 3.06

J inmao Investments 6139 HK 4.08 7.6 8.0 1.03 0.99 4.15 3.98 4.15 4.00 4.15 4.07

Langham Hospitality 1270 HK 3.18 6.6 7.0 0.59 0.56 3.37 3.18 3.37 3.18 3.37 3.18

New Century REIT 1275 HK 2.45 6.9 7.4 0.88 0.82 2.52 2.35 2.52 2.45 2.52 2.45

Prosperity REIT 808 HK 3.18 6.1 6.4 0.66 0.63 3.24 3.08 3.22 3.08 3.21 3.16

Regal REIT 1881 HK 2.28 7.8 8.4 0.55 0.51 2.29 2.12 2.29 2.16 2.29 2.25

Spring REIT 1426 HK 3.25 6.5 6.9 0.52 0.49 3.35 3.14 3.35 3.16 3.29 3.20

Sunlight REIT 435 HK 4.89 5.1 5.5 0.59 0.55 4.89 4.52 4.89 4.52 4.89 4.67

Link REIT 823 HK 55.70 4.0 4.4 0.99 0.90 56.50 50.95 56.50 50.95 56.50 55.00

Yuexiu REIT 405 HK 4.57 6.5 7.1 0.85 0.77 4.70 4.30 4.70 4.50 4.70 4.52

Sector A v erage - REIT s 6.3 6.8 0.71 0.66Hang Seng Index 3.4 3.6

- - Last 3 month - - - - Last 3 month - - - - Last 2 month - -- - Last 1 month - -- - Last 3 month - -

@ denominated in RMB

Source: Thomson Reuters; DBS Vickers

Page 8: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 8

Share price movement comparison (%)

1- w k 2- w k 1- mt h 3- mt h 6- mth 1- y r Y T D 2012 2013 2014 2015 2016

CK Property 0.7 2.6 5.8 9.7 (2.9) 13.1 18.2 n.a. n.a. n.a. n.a. (5.7)

Henderson Land (1.8) (1.2) (1.1) 13.1 5.8 12.7 17.3 41.7 (11.0) 35.0 (3.8) (4.5)

K Wah Int'l (0.8) (1.6) (7.9) 25.6 15.0 41.0 36.1 89.3 26.0 (10.0) (15.6) 12.6

Kerry Properties (1.4) 2.1 (0.9) 30.2 16.9 37.6 36.3 56.6 (33.2) 4.6 (24.9) (0.5)Lai Sun Development (8.2) (4.7) (4.3) 22.6 23.3 74.8 37.7 192.0 (31.2) (15.9) (32.5) 28.1

MTR Corp 0.7 1.8 2.5 13.3 6.0 17.1 19.6 21.3 (3.8) 8.3 20.8 (1.8)

New World Dev (2.5) (2.0) (2.7) 5.1 (3.1) 27.0 15.2 92.0 (16.3) (3.2) (14.1) 7.0

Sino Land (1.4) 0.9 (5.1) 1.6 2.7 9.2 11.9 26.0 (24.0) 18.1 (9.3) 2.3

SHKP (0.1) 0.1 (0.3) 8.0 1.0 25.1 19.0 19.4 (15.4) 20.3 (20.9) 4.7

Tai Cheung 2.3 4.8 2.5 5.6 13.1 26.9 9.8 33.7 (7.6) 8.7 (2.7) 9.8

Wing Tai Properties (0.2) (3.6) (6.5) 6.9 7.3 9.8 9.8 106.1 (5.7) 5.0 (10.4) 4.5Wheelock and Co. (1.9) (3.3) (6.0) 25.4 25.0 66.7 36.3 102.7 (8.6) 1.5 (9.8) 33.7

Hang Lung Properties (5.8) (2.2) (7.1) (1.2) 15.0 31.5 16.9 39.4 (20.5) (11.2) (18.9) (6.8)HK Land 0.1 0.4 0.8 14.4 15.7 24.5 22.0 54.0 (15.6) 14.6 3.6 (9.6)

Hysan Development (0.7) (0.8) 0.6 2.2 3.0 10.6 13.7 46.1 (10.3) 3.7 (8.4) 0.9

Swire Properties (2.5) (0.2) 3.5 15.2 14.9 25.4 18.9 n.a. (24.2) 16.8 (2.2) (4.5)

Wharf Holdings (1.1) (0.6) (1.7) 12.4 14.1 59.0 27.5 72.6 (2.1) (5.6) (23.2) 19.9

Champion REIT (0.8) 1.0 3.7 19.0 14.1 20.1 19.5 27.1 (7.5) 5.0 7.8 8.2

Fortune REIT (0.6) (0.1) 0.8 (1.1) (2.8) 5.9 0.9 68.6 (3.1) 26.7 1.8 11.7

Yuexiu REIT (0.2) 0.2 (2.8) 6.3 3.2 4.8 11.7 7.3 2.7 2.9 6.9 (1.7)

Hui Xian REIT 1.0 1.3 1.0 1.0 (1.0) 0.3 (0.6) 16.6 (7.0) (9.8) (4.3) (5.7)

Link REIT (0.4) (0.3) (0.7) 5.3 2.1 18.4 10.5 35.3 (2.8) 29.1 (4.4) 8.6

Prosperity REIT 0.6 0.6 0.6 0.3 (4.8) 5.6 3.9 56.7 (3.8) 16.8 5.7 9.7Regal REIT 0.0 0.9 1.3 7.5 10.7 15.2 10.7 24.0 0.5 (8.1) (5.4) 6.2

Sunlight REIT 1.2 2.7 4.7 2.7 3.6 20.7 9.4 48.6 (9.1) 16.7 9.4 16.7

Spring REIT 0.0 (0.9) (0.9) 3.2 1.2 (3.8) 0.9 n.a. n.a. 15.5 (17.2) 6.3

New Century REIT (2.0) (1.2) (1.6) (2.0) (1.6) (9.3) (1.6) n.a. n.a. (9.3) (12.1) (14.1)

Great Eagle (0.5) 1.5 3.6 9.7 12.8 21.9 3.9 68.6 3.3 (4.9) 0.2 46.0

Far East Consort.Intl. 3.2 8.8 5.5 14.0 23.3 56.5 15.7 89.8 40.7 8.9 3.5 18.8

HSI Index (0.6) 1.8 0.3 5.8 8.1 19.7 11.3 22.9 2.9 1.3 (7.2) 0.4

HSP Index (1.5) (0.8) (1.0) 5.9 1.6 17.8 15.9 37.6 (9.2) 7.2 (2.1) (3.1)

Source: Thomson Reuters

Page 9: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 9

Residential

What were the transaction trends in primary and secondary markets?

Primary market transaction volume

Primary market transaction value

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-2.6% m-o-m

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3M17

180.7% y-o-y

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16A

pr-1

6Ju

l-16

Oct

-16

Jan-

17

HK$mMar-17

178.8% y-o-y

17.8% m-o-m

3M17

186.8% y-o-y

Source: Centaline Property Agency Source: Centaline Property Agency

Secondary market transaction volume

Secondary market transaction value

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Jan-

09A

pr-0

9Ju

l-09

Oct

-09

Jan-

10A

pr-1

0Ju

l-10

Oct

-10

Jan-

11A

pr-1

1Ju

l-11

Oct

-11

Jan-

12A

pr-1

2Ju

l-12

Oct

-12

Jan-

13A

pr-1

3Ju

l-13

Oct

-13

Jan-

14A

pr-1

4Ju

l-14

Oct

-14

Jan-

15A

pr-1

5Ju

l-15

Oct

-15

Jan-

16A

pr-1

6Ju

l-16

Oct

-16

Jan-

17

No of units Mar-17

70.3% m-o-m158.4% y-o-y

3M17

97.7% y-o-y

0 5,000

10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

Jan-

09A

pr-0

9Ju

l-09

Oct

-09

Jan-

10A

pr-1

0Ju

l-10

Oct

-10

Jan-

11A

pr-1

1Ju

l-11

Oct

-11

Jan-

12A

pr-1

2Ju

l-12

Oct

-12

Jan-

13A

pr-1

3Ju

l-13

Oct

-13

Jan-

14A

pr-1

4Ju

l-14

Oct

-14

Jan-

15A

pr-1

5Ju

l-15

Oct

-15

Jan-

16A

pr-1

6Ju

l-16

Oct

-16

Jan-

17

HK$mMar-17

207% y-o-y

57.3% m-o-m

3M17

124.6% y-o-y

Source: Centaline Property Agency Source: Centaline Property Agency

Page 10: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 10

Confirmor – Overall

Confirmor – Over HK$7m

0%1%2%3%4%5%6%7%8%9%10%

0 200 400 600 800

1,000 1,200 1,400 1,600 1,800

Jul-9

5Ju

l-96

Jul-9

7Ju

l-98

Jul-9

9Ju

l-00

Jul-0

1Ju

l-02

Jul-0

3Ju

l-04

Jul-0

5Ju

l-06

Jul-0

7Ju

l-08

Jul-0

9Ju

l-10

Jul-1

1Ju

l-12

Jul-1

3Ju

l-14

Jul-1

5Ju

l-16

No. of cases of confirmor (LHS)

As a % of total secondary registrations (RHS)

Mar-17 4, 0.09%

Feb-17 2, 0.08%

0%

5%

10%

15%

20%

25%

30%

0

50

100

150

200

250

300

350

Jul-9

5Ju

l-96

Jul-9

7Ju

l-98

Jul-9

9Ju

l-00

Jul-0

1Ju

l-02

Jul-0

3Ju

l-04

Jul-0

5Ju

l-06

Jul-0

7Ju

l-08

Jul-0

9Ju

l-10

Jul-1

1Ju

l-12

Jul-1

3Ju

l-14

Jul-1

5Ju

l-16

No. of cases of confirmor (LHS)

As a % of over $7m secondary registrations (RHS)

Mar-17 0, 0%

Feb-17 0, 0%

Source: Centaline Property Agency Source: Centaline Property Agency

Centa-City leading index (Secondary market price index)

Residential rents (Based on saleable area)

(4)

(2)

0

2

4

6

8

50

70

90

110

130

150

170

Mar

-09

Jul-0

9N

ov-0

9M

ar-1

0Ju

l-10

Nov

-10

Mar

-11

Jul-1

1N

ov-1

1M

ar-1

2Ju

l-12

Nov

-12

Mar

-13

Jul-1

3N

ov-1

3M

ar-1

4Ju

l-14

Nov

-14

Mar

-15

Jul-1

5N

ov-1

5M

ar-1

6Ju

l-16

Nov

-16

Mar

-17

Mom growth (RHS) CCL Index (LHS)

%

1.6% m-o-m

6.8% ytd

Apr-17

5 10 15 20 25 30 35 40 45

Jan-

07Ju

l-07

Jan-

08Ju

l-08

Jan-

09Ju

l-09

Jan-

10Ju

l-10

Jan-

11Ju

l-11

Jan-

12Ju

l-12

Jan-

13Ju

l-13

Jan-

14Ju

l-14

Jan-

15Ju

l-15

Jan-

16Ju

l-16

Jan-

17

Hong Kong KowloonNew Territories East New Territories WestOverall

HK$psf Mar-17

Overall: 3.1% m-o-m13.1% y-o-y

Source: Centaline Property Agency Source: Centaline Property Agency

Page 11: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 11

What are the factors affecting residential demand and supply?

Real GDP growth

Unemployment rate

(10)

(8)

(6)

(4)

(2)

0

2

4

6

8

10

1Q05

3Q05

1Q06

3Q06

1Q07

3Q07

1Q08

3Q08

1Q09

3Q09

1Q10

3Q10

1Q11

3Q11

1Q12

3Q12

1Q13

3Q13

1Q14

3Q14

1Q15

3Q15

1Q16

3Q16

%4Q16: 3.1% y-o-y

2

3

4

5

6

7

8

9

Jan/

01Ja

n/02

Jan/

03Ja

n/04

Jan/

05Ja

n/06

Jan/

07Ja

n/08

Jan/

09Ja

n/10

Jan/

11Ja

n/12

Jan/

13Ja

n/14

Jan/

15Ja

n/16

Jan/

17

%Jan-17 -Mar-17: 3.2%

Dec-16 -Feb-17: 3.3%

Source: CEIC Source: CEIC

3-mth HIBOR vs Prime rate

Effective mortgage rate

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0

Jan-

07Ju

l-07

Jan-

08Ju

l-08

Jan-

09Ju

l-09

Jan-

10Ju

l-10

Jan-

11Ju

l-11

Jan-

12Ju

l-12

Jan-

13Ju

l-13

Jan-

14Ju

l-14

Jan-

15Ju

l-15

Jan-

16Ju

l-16

Jan-

17

3-mth HIBOR HK Prime rate

% Apr-17

3-mth HIBOR: 0.88%Prime rate: 5%

0

2

4

6

8

10

12

Jan-

96Ja

n-97

Jan-

98Ja

n-99

Jan-

00Ja

n-01

Jan-

02Ja

n-03

Jan-

04Ja

n-05

Jan-

06Ja

n-07

Jan-

08Ja

n-09

Jan-

10Ja

n-11

Jan-

12Ja

n-13

Jan-

14Ja

n-15

Jan-

16Ja

n-17

% Apr-17: 1.72%

Mar-17: 1.74%

Source: CEIC Source: CEIC, DBS Vickers

Page 12: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 12

Housing affordability – private households

Rental yields (mass market projects) (Based on Saleable Area)

0%

20%

40%

60%

80%

100%

120%

Jan-

94Ja

n-95

Jan-

96Ja

n-97

Jan-

98Ja

n-99

Jan-

00Ja

n-01

Jan-

02Ja

n-03

Jan-

04Ja

n-05

Jan-

06Ja

n-07

Jan-

08Ja

n-09

Jan-

10Ja

n-11

Jan-

12Ja

n-13

Jan-

14Ja

n-15

Jan-

16Ja

n-17

Prime base HIBOR base

Prime base HIBOR base

Mar-17

Feb-17 55.0

56.7

53.3%

54.6%

0%

1%

2%

3%

4%

5%

6%

7%

Jan-

96Ja

n-97

Jan-

98Ja

n-99

Jan-

00Ja

n-01

Jan-

02Ja

n-03

Jan-

04Ja

n-05

Jan-

06Ja

n-07

Jan-

08Ja

n-09

Jan-

10Ja

n-11

Jan-

12Ja

n-13

Jan-

14Ja

n-15

Jan-

16Ja

n-17

Mar-173.27%

Source: Centaline Property Agencys Source: Centaline Property Agency

Yield spread

Housing supply

(10)

(8)

(6)

(4)

(2)

0

2

4

6

Jan-

96Ja

n-97

Jan-

98Ja

n-99

Jan-

00Ja

n-01

Jan-

02Ja

n-03

Jan-

04Ja

n-05

Jan-

06Ja

n-07

Jan-

08Ja

n-09

Jan-

10Ja

n-11

Jan-

12Ja

n-13

Jan-

14Ja

n-15

Jan-

16Ja

n-17

%

Jun-03

Max:

3.77%

0 5,000

10,000 15,000 20,000 25,000 30,000 35,000 40,000

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

E20

18E

2019

E20

20E

2021

E

Completion No of primary units sold

Average

No of units

Average completion (96-16)

17,827 units

Source: CEIC, Centaline Property Agency, DBS Vickers Source: DBS Vickers

Page 13: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 13

What projects were launched?

Project Launches (April 2017)

Launch Project s Locat ion Dev eloper Total Unit s

Unit s sold

% sold A SP(HK$psf )

Apr-17 Harbour Glory North Point Cheung Kong Property 378 247 65% 32,000

Apr-17 Eight Regency Tuen Mun SHKP 321 245 76% 13,300

Apr-17 Parc Inverness Kowloon Tong Chinachem 134 78 58% 24,000

Source: DBS Vickers

Occupation permits issued (Feb 2017)

Project s Locat ion Locat ion Dev elopers No of unit s

6 Moorsom Road Shouson Hill HK Private developer 1

9 Belfran Road Prince Edward Kln Private developer 7 Source: Buildings Department

Page 14: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 14

Where are the upcoming projects?

Pre-sale consent granted (Mar 2017)

Project Dev elopers Locat ion Locat ion No. of unitSt. Barths (Ph1) SHKP NT Ma On Shan 353St. Barths (Ph2) SHKP NT Ma On Shan 67RBL 1190 Nan Fung Group HK Island South 54

Source: Lands Department

Pre-sale consent pending approval (Mar 2017)

Project Dev elopers Locat ion Locat ion No. of unitIL 9038 URA HK Central 18545 Tai Tam Road National Electronics Consortium HK Island South 7IL 8949 (Ph1) Cheung Kong Property HK Mid-levels 11512 Shiu Fai Terrace Chinese Estates HK Mid-levels 24IL 9027 RP (Ph1) SHKP HK North Point 355SIL 854 Wing Tai Props HK Shau Kei Wan 75Victoria Skye K&K Property Kln Kai Tak 822NKIL 6541 Wheelock & Co. Kln Kai Tak 648NKIL 6532 Kerry Properties Kln Kowloon Tong 45NKIL 6538 Emperor Int'l/URA Kln Sham Shui Po 136NKIL 6539 URA Kln Sham Shui Po 87Lot 385 in DD 352 & Extension HKR NT Discovery Bay 196Edition 178 Global Convention NT Kwai Chung 1363 Clear Water Bay V ice Chairman of Agile NT Sai Kung 8Marin Point Far East Consortium NT Sha Tau Kok 261Mount V ienna Hanison Construction Holdings Ltd NT Shatin 12STTL 565 Wing Tai Props/Manhattan Realty NT Shatin 69La Vetta Wing Tai Props/Manhattan Realty NT Shatin 158STTL 587 Wang On Group NT Shatin 336STTL 578 Paliburg/Regal Hotels NT Shatin 160TPTL 213 Billion Development NT Tai Po 667TKOTL 110 HK Housing Society NT Tseung Kwan O 330L'Aquatique MCC NT Tsing Lung Tau 198TWTL 401 (Ph3) Cheung Kong Property NT Tsuen Wan 970Ocean Pride (Ph3A) Cheung Kong Property NT Tsuen Wan 1,436TWTL 417 Chinachem NT Tsuen Wan 953T Plus Chun Wo NT Tuen Mun 356CPTL 18 and TMTL 99 New World NT Tuen Mun 100TMTL 545 HK Housing Society NT Tuen Mun 290Lot 2131 in DD121 New World NT Yuen Long 123Park V ista (Ph2A) SHKP NT Yuen Long 683

Source: Lands Department

Page 15: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 15

How about the office market?

Office rentals

Office capital values

0

50

100

150

200

250

Aug

-07

Dec

-07

Apr

-08

Aug

-08

Dec

-08

Apr

-09

Aug

-09

Dec

-09

Apr

-10

Aug

-10

Dec

-10

Apr

-11

Au g

-11

Dec

-11

Apr

-12

Aug

-12

Dec

-12

Apr

-13

Aug

-13

Dec

-13

Apr

-14

Au g

-14

Dec

-14

Apr

-15

Aug

-15

Dec

-15

Apr

-16

Aug

-16

Dec

-16

Premium Central Traditional Central

HK$psf/mth P remium Central

Mar-17: 0.4% m-o-m

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Sep-

07Ja

n-08

Ma y

-08

Sep-

08Ja

n-09

May

-09

Sep-

09Ja

n-10

May

-10

Sep-

10Ja

n-11

May

-11

Sep-

11Ja

n-12

Ma y

-12

Sep-

12Ja

n-13

May

-13

Sep-

13Ja

n-14

May

-14

Sep-

14Ja

n-15

May

-15

Sep-

15Ja

n-16

Ma y

-16

Sep-

16Ja

n-17

Overall Central

HK$psf/mth Mar-17

HK$33,245psf, 0% m-o-mOverall Ce ntral

Source: Knight Frank Source: Knight Frank

Office vacancy

Office vacancy in Central

1.52.6 2.5 1.9

10.0

4.4

1.52.7 3.1

1.8

9.7

4.3

0.01.02.03.04.05.06.07.08.09.0

10.011.0

Cen

tral

Wan

chai

/ Cau

sew

ay

Bay

HK

Eas

t

Tsim

shat

sui

Kow

loon

Eas

t

Ove

rall

Feb-17 Mar-17

%

0

1

2

3

4

5

6

Jun-

10

Dec

-10

Jun-

11

Dec

-11

Jun-

12

Dec

-12

Jun-

13

Dec

-13

Jun-

14

Dec

-14

Jun-

15

Dec

-15

Jun-

16

Dec

-16

Office Vacancy - Central

(%)Mar-17: 1.5%

Source: Jones Lang LaSalle Source: Knight Frank

Page 16: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 16

How about the retail market?

Private retail rent index

Private retail price index

80

100

120

140

160

180

200

Jan/

93Ja

n/94

Jan/

95Ja

n/96

Jan/

97Ja

n/98

Jan/

99Ja

n/00

Jan/

01Ja

n/02

Jan/

03Ja

n/04

Jan/

05Ja

n/06

Jan/

07Ja

n/08

Jan/

09Ja

n/10

Jan/

11Ja

n/12

Jan/

13Ja

n/14

Jan/

15Ja

n/16

Jan/

17

Rental Index (1999=100)

Feb-170.6% m-o-m

2% y-o-y

50

150

250

350

450

550

Jan/

93Ja

n/94

Jan/

95Ja

n/96

Jan/

97Ja

n/98

Jan/

99Ja

n/00

Jan/

01Ja

n/02

Jan/

03Ja

n/04

Jan/

05Ja

n/06

Jan/

07Ja

n/08

Jan/

09Ja

n/10

Jan/

11Ja

n/12

Jan/

13Ja

n/14

Jan/

15Ja

n/16

Jan/

17

Price Index (1999=100)

Feb-170.6% m-o-m

2.7% y-o-y

Source: Rating and Valuation Department Source: Rating and Valuation Department

Overall retail sales growth

Monthly retail sales growth of jewelleries/watches

(30)

(20)

(10)

0

10

20

30

40

Jan-

08Ju

l-08

Jan-

09Ju

l-09

Jan-

10Ju

l-10

Jan-

11Ju

l-11

Jan-

12Ju

l-12

Jan-

13Ju

l-13

Jan-

14Ju

l-14

Jan-

15Ju

l-15

Jan-

16Ju

l-16

Jan-

17

Yoy, % Mar-17: 3.1% y-o-y

3M17: -1.3% y-o-y

(40)

(20)

0

20

40

60

80

Jan-

Feb

08Ju

n-08

Oct

-08

Mar

-09

Jul-0

9N

ov-0

9A

pr-1

0A

u g-1

0D

ec-1

0M

a y-1

1Se

p-11

Jan-

Feb

12Ju

n-12

Oct

-12

Mar

-13

Jul-1

3N

ov-1

3A

pr-1

4A

u g-1

4D

ec-1

4M

a y-1

5Se

p-15

Jan-

Feb

16Ju

n-16

Oct

-16

Mar

-17

Yoy, % Mar-17: 8.4% y-o-y

3M17: 1.4% y-o-y

Source: CEIC Source: CEIC

Page 17: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 17

Monthly retail sales growth of consumer durable goods

Monthly retail sales growth of supermarket items

(30)

(20)

(10)

0

10

20

30

40

50

Jan-

Feb

08Ju

n-08

Oct

-08

Mar

-09

Jul-0

9N

ov-0

9A

pr-1

0A

u g-1

0D

ec-1

0M

a y-1

1Se

p-11

Jan-

Feb

12Ju

n-12

Oct

-12

Mar

-13

Jul-1

3N

ov-1

3A

pr-1

4A

u g-1

4D

ec-1

4M

a y-1

5Se

p-15

Jan-

Feb

16Ju

n-16

Oct

-16

Mar

-17

Yoy, % Mar-17: -1.4% y-o-y

3M17: -10.8% y-o-y

(5)

0

5

10

15

20

Jan-

Feb

08Ju

n-08

Oct

-08

Mar

-09

Jul-0

9N

ov-0

9A

pr-1

0A

ug-1

0D

ec-1

0M

ay-1

1Se

p-11

Jan-

Feb

12Ju

n-12

Oct

-12

Mar

-13

Jul-1

3N

ov-1

3A

pr-1

4A

ug-1

4D

ec-1

4M

ay-1

5Se

p-15

Jan-

Feb

16Ju

n-16

Oct

-16

Mar

-17

Yoy, % Mar-17: 2.6% y-o-y

3M17: -1.7% y-o-y

Source: CEIC Source: CEIC

Visitor arrivals growth – overall

Visitor arrivals growth – China

(30)

(20)

(10)

0

10

20

30

40

50

Jan/

08Ju

l/08

Jan/

09Ju

l/09

Jan/

10Ju

l/10

Jan/

11Ju

l/11

Jan/

12Ju

l/12

Jan/

13Ju

l/13

Jan/

14Ju

l/14

Jan/

15Ju

l/15

Jan/

16Ju

l/16

Jan/

17

Yoy, % Mar-17: 8.8% y-o-y3.7% y-o-y3M17:

(40)

(30)

(20)

(10)

0

10

20

30

40

50

60

Jan/

08Ju

l/08

Jan/

09Ju

l/09

Jan/

10Ju

l/10

Jan/

11Ju

l/11

Jan/

12Ju

l/12

Jan/

13Ju

l/13

Jan/

14Ju

l/14

Jan/

15Ju

l/15

Jan/

16Ju

l/16

Jan/

17

Yoy, %Mar-17: 10.4% y-o-y

3.8% y-o-y3M17:

Source: CEIC Source: CEIC

Page 18: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 18

What did corporates do?

Major corporate actions

Date Ev ent

1-Apr Patina at Kwun Tong reportedly sold en-bloc to a private investor for HK$1.4bn (GFA: 84,365sf, HK$16,595psf)

8-Apr A grade-B office in Sheung Wan sold for HK$112m (GFA: 7,192sf, HK$16,824psf)

9-Apr Link REIT buys Metropolitan Plaza in Guangzhou for Rmb4.065bn11-Apr HK government announces that local first-time home buyers purchasing

multiple flats in a single transaction are now subject to 15% stamp duty12-Apr Mt. Kelly International School leased whole block of East retail villa (GFA

13,000sf) of Cheung Kei Centre at Hung Hom13-Apr Chuang's Consortium (367.HK) buys commercial property (GFA: 47,257sf) in

Sham Shui Po for c.HK$300m (HK$6,373psf).13-Apr Henderson Land (12.HK) buys 9 shops and 2 residential units in Hung Hom

for HK$210m13-Apr Hang Lung Prop (101.HK) 1Q17 retail portfolio shows mid-single digit

improvement in sales. Hang Lung began its HK$2bn AEI plan in 2012.13-Apr Banks in HK are now offering mortgages at H+1.28% (prev: H+1.30%). The

minimum loan size restriction has also been relaxed.18-Apr Amazon (AMZN.US) reportedly leased GFA 11,000sf (HK$ 70psf) office space

at Tower 535, Causeway Bay.20-Apr Hsin Chong Group (404.HK) announces sale of industrial property Hsin

Chong Center in Kwun Tong for c.HK$760m (HK$9,219psf, GFA: 82,434sf) but will lease back the property for HK$2.4m/month.

25-Apr China Shipping Industry Corp buys 2 floors at 650 Cheung Sha Wan Road for HK$259m (HK$19,000psf)

25-Apr 35 developers submitted expression of interest for residential project at Kam Sheung Road MTR station,  Yuen Long (GFA 1.23m sf)

26-Apr The Equal Opportunities Commission will rent 22,000 sf (HK$25 psf/mon) of space at 41 Heung Yip Road, Wong Chuk Hang

27-Apr Pegasus Entertainment (1326.HK) will replace MCL JP as cinema operator at Patterson St, Causeway Bay (20,000sf space c.HK$50psf/month rent).

28-Apr 6 developers submit tenders for Kwai Chung industrial site (KCTL 524 GFA 176,905sf)

Source: DBS Vickers, local press, HKEx, Lands Department

Page 19: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 19

Stake change by major shareholders

Tai Cheung (88.HK)

Name of substant ial shareholder

No. of shares inv olv ed

Buy /Sell A v erage price per share

No. of shares interested

% of issued share capital

Date of relev ant ev ent

Chan Pun David 1,000 Buy 7.15 118,767,971 19.230 21-Apr-17Chan Pun David 2,000 Buy 7.18 118,766,971 19.230 18-Apr-17Chan Pun David 3,000 Buy 7.23 118,764,971 19.230 13-Apr-17Chan Pun David 1,000 Buy 7.29 118,761,971 19.230 07-Apr-17

Source: HK Exchange

Page 20: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 20

Discount to NAV – Property developers & investors

Property developers

CK Property Henderson Land

(60)

(55)

(50)

(45)

(40)

(35)

(30)

(25)

Jun-

15Ju

l-15

Aug

-15

Sep-

15O

ct-1

5N

ov-1

5D

ec-1

5Ja

n-16

Feb-

16M

ar-1

6A

pr-1

6M

a y-1

6Ju

n-16

Jul-1

6A

ug-1

6Se

p-16

Oct

-16

Nov

-16

Dec

-16

Jan-

17Fe

b-17

Mar

-17

Apr

-17

Ma y

-17

Average: -44%

+1SD: -38%

-1SD: -50%

+2SD: -32%

-2SD: -56%

(70)(60)(50)(40)(30)(20)(10)

0 10 20 30

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Jan-

17

%

Average: -32%

+2SD: -1%

+1SD: -16%

-1SD: -48%

-2SD: -63%

K.Wah International Kerry Properties

(85)(80)(75)(70)(65)(60)(55)(50)(45)(40)(35)

Sep-

09

Jul-1

0

May

-11

Apr

-12

Feb-

13

Dec

-13

Oct

-14

Aug

-15

Jul-1

6

%

Average: -63%

+2SD: -51%

+1SD: -57%

-1SD: -69%

-2SD: -75%

(100)

(80)

(60)

(40)

(20)

0

20

40

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Jan-

17

%

Average: -42%

+2SD: 9%

+1SD: -17%

-1SD: -68%

-2SD: -93%

MTRC New World Development

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

5

May

-09

Nov

-09

Apr

-10

Sep-

10M

ar-1

1A

ug-1

1Ja

n-12

Jul-1

2D

ec-1

2M

ay-1

3N

ov-1

3A

pr-1

4Se

p-14

Mar

-15

Aug

-15

Jan-

16Ju

l-16

Dec

-16

%

Average: -13%

+2SD: -1%

+1SD: -7%

-1SD: -20%

-2SD: -26%

(90)

(80)

(70)

(60)

(50)

(40)

(30)

(20)

(10)

0

Jan-

07Ju

l-07

Jan-

08Ju

l-08

Jan-

09Ju

l-09

Jan-

10Ju

l-10

Jan-

11Ju

l-11

Jan-

12Ju

l-12

Jan-

13Ju

l-13

Jan-

14Ju

l-14

Jan-

15Ju

l-15

Jan-

16Ju

l-16

Jan-

17

%

Average: -51%

+2SD: -22%

+1SD: -36%

-1SD: -65%

-2SD: -80%

Source: Thomson Reuters, DBS Vickers

Page 21: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 21

Property developers (continued)

Sino Land Sun Hung Kai Properties

(80)

(60)

(40)

(20)

0

20

40

60

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Jan-

17

%

Average: -33%

+2SD: 6%

+1SD: -13%

-1SD: -53%

-2SD: -72%

(80)

(60)

(40)

(20)

0

20

40

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Jan-

17

%

Average: -27%

+2SD: 12%

+1SD: -7%

-1SD: -46%

-2SD: -66%

Tai Cheung Wheelock & Co.

(90)

(80)

(70)

(60)

(50)

(40)

(30)

(20)

Jan-

07Ju

l-07

Feb-

08A

ug-0

8Fe

b-09

Sep-

09M

ar-1

0Se

p-10

Apr

-11

Oct

-11

Apr

-12

Oct

-12

May

-13

Nov

-13

May

-14

Dec

-14

Jun-

15D

ec-1

5Ju

l-16

Jan-

17

%

Average: -62%

+2SD: -46%

+1SD: -54%

-1SD: -70%

-2SD: -78%

(60)

(50)

(40)

(30)

(20)

(10)

0

10

20

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Jan-

17

%

Average: -28%

+2SD: -2%

+1SD: -15%

-1SD: -41%

-2SD: -54%

Wing Tai Properties Sector average

(80)

(75)

(70)

(65)

(60)

(55)

(50)

(45)

(40)

Nov

-11

Jan-

12M

ar-1

2M

a y-1

2Ju

l-12

Sep-

12N

ov-1

2Ja

n-13

Mar

-13

May

-13

Jul-1

3Se

p-13

Nov

-13

Jan-

14M

ar-1

4M

ay-1

4Ju

l-14

Sep-

14N

ov-1

4Ja

n-15

Mar

-15

May

-15

Jul-1

5Se

p-15

Nov

-15

Jan-

16M

ar-1

6M

a y-1

6Ju

l-16

Sep-

16N

ov-1

6Ja

n-17

Mar

-17

May

-17

%

Average: -65%

-2SD: -75%

-1SD: -70%

+1SD: -60%

+2SD: -55%

(60)

(50)

(40)

(30)

(20)

(10)

0

10

20

30

Jan/

07

Jan/

08

Jan/

09

Jan/

10

Jan/

11

Jan/

12

Jan/

13

Jan/

14

Jan/

15

Jan/

16

Jan/

17

%

+2SD: 1%

+1SD: -13%

Average: -27%

-1SD: -41%

-2SD: -55%

Source: Thomson Reuters, DBS Vickers

Page 22: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 22

Property investors

Hang Lung Properties Hong Kong Land

(80)

(60)

(40)

(20)

0

20

40

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Jan-

17

%

Average: -21%

+2SD: 24%

+1SD: 2%

-1SD: -43%

-2SD: -66%

(70)

(60)

(50)

(40)

(30)

(20)

(10)

0

10

20

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Jan-

17

%

Average: -27%

-2SD: -57%

-1SD: -42%

+1SD: -12%

+2SD: 3%

Hysan Swire Properties

(80)

(70)

(60)

(50)

(40)

(30)

(20)

(10)

0

Jan-

07

Jan-

09

Jan-

11

Feb-

13

Feb-

15

Feb-

17

%

Average: -40%

-2SD: -60%

-1SD: -50%

+1SD: -29%

+2SD: -19%

(55)(50)(45)(40)(35)(30)(25)(20)(15)(10)(5)

Jan-

12

Jun-

12

Nov

-12

Apr

-13

Sep-

13

Jan-

14

Jun-

14

Nov

-14

Apr

-15

Sep-

15

Feb-

16

Jul-1

6

Nov

-16

Apr

-17

%

Average: -35%

-2SD: -53%

-1SD: -44%

+1SD: -26%

+2SD: -17%

Wharf Sector average

(70)

(60)

(50)

(40)

(30)

(20)

(10)

0

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Jan-

17

%

Average: -30%

-2SD: -56%

-1SD: -43%

+1SD: -16%

+2SD: -3%

(70)

(60)

(50)

(40)

(30)

(20)

(10)

0

10

20

Jan-

07

Feb-

09

Mar

-11

Apr

-13

May

-15

%

Average: -27%

+2SD: 3%

+1SD: -11%

-1SD: -38%

-2SD: -52%

Source: Thomson Reuters, DBS Vickers

Page 23: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 23

Discount to NAV band – Property developers & investors

Property developers

CK Property Henderson Land

35

40

45

50

55

60

65

70

Jun-

15Ju

l-15

Aug

-15

Sep-

15O

ct-1

5N

ov-1

5D

ec-1

5Ja

n-16

Feb-

16M

ar-1

6A

pr-1

6M

a y-1

6Ju

n-16

Jul-1

6A

u g-1

6Se

p-16

Oct

-16

Nov

-16

Dec

-16

Jan-

17Fe

b-17

Mar

-17

Apr

-17

Ma y

-17

HK$

-58%

-51%

-44%

-37%

-30%

0

20

40

60

80

100

120

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Jan-

17

HK$

-63%

-43%

-23%

-2%

18%

K Wah International Kerry Properties

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Sep-

09

Jul-1

0

May

-11

Apr

-12

Feb-

13

Dec

-13

Oct

-14

Aug

-15

Jul-1

6

HK$

-82%

-73%

-64%

-55%

-46%

0

20

40

60

80

100

120

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Jan-

17

HK$

-77%

-24%

3%

30%

-50%

MTRC New World Development

22

27

32

37

42

47

52

May

-09

Nov

-09

Apr

-10

Sep-

10M

ar-1

1A

ug-1

1Ja

n-12

Jul-1

2D

ec-1

2M

ay-1

3N

ov-1

3A

pr-1

4Se

p-14

Mar

-15

Aug

-15

Jan-

16Ju

l-16

Dec

-16

HK$

-27%

-20%

-13%

-5%

2%

0

5

10

15

20

25

30

35

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Jan-

17

HK$

-81%-61%-42%

-22%

-2%

Source: Thomson Reuters, DBS Vickers

Page 24: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 24

Property developers (continued)

Sino Land Sun Hung Kai Properties

0

5

10

15

20

25

30

35

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Jan-

17

HK$

-73%

-45%

-17%

12%

40%

20

70

120

170

220

270

320

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Jan-

17

HK$

-58%

-14%

8%

30%

-36%

Tai Cheung Wheelock & Co.

0

2

4

6

8

10

12

14

Jan-

07Ju

l-07

Feb-

08A

u g-0

8Fe

b-09

Sep-

09M

ar-1

0Se

p-10

Apr

-11

Oct

-11

Apr

-12

Oct

-12

Ma y

-13

Nov

-13

Ma y

-14

Dec

-14

Jun-

15D

ec-1

5Ju

l-16

Jan-

17

HK$

-83%

-38%

-49%

-61%

-72%

0 10 20 30 40 50 60 70 80 90

100

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Jan-

17

HK$

-47%

-31%-15%

1%

17%

Wing Tai Properties

Source: Thomson Reuters, DBS Vickers

Page 25: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 25

Property investors

Hang Lung Properties Hong Kong Land

0

10

20

30

40

50

60

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Jan-

17

HK$

-61%

-37%

35%

13%

-9%

0

2

4

6

8

10

12

14

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Jan-

17

US$

-62%

-44%

-26%

-7%

11%

Hysan Swire Properties

3

13

23

33

43

53

63

Jan-

07

Sep-

08

May

-10

Jan-

12

Oct

-13

Jun-

15

Feb-

17

HK$

-69%

-54%

-40%

-25%

-10%

15

20

25

30

35

40

Jan-

12

Jun-

12

Nov

-12

Apr

-13

Sep-

13

Jan-

14

Jun-

14

Nov

-14

Apr

-15

Sep-

15

Feb-

16

Jul-1

6

Nov

-16

Apr

-17

HK$

-51%

-42%

-32%

-23%

-13%

Wharf

0 10 20 30 40 50 60 70 80 90

100

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Jan-

17

HK$

-66%

-1%

-17%

-33%

-50%

Source: Thomson Reuters, DBS Vickers

Page 26: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 26

Price to book NAV band - REITs

REITs

Champion REIT Fortune REIT

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Jan-

07Ju

l-07

Jan-

08Ju

l-08

Jan-

09Ju

l-09

Jan-

10Ju

l-10

Jan-

11Ju

l-11

Jan-

12Ju

l-12

Jan-

13Ju

l-13

Jan-

14Ju

l-14

Jan-

15Ju

l-15

Jan-

16Ju

l-16

Jan-

17

HK$

0.2x

0.3x

0.5x

0.7x

0.8x

0

2

4

6

8

10

12

14

16

Aug

/03

Feb/

04A

ug/0

4Fe

b/05

Aug

/05

Feb/

06A

u g/0

6Fe

b/07

Aug

/07

Feb/

08A

ug/0

8Fe

b/09

Au g

/09

Feb/

10A

ug/1

0Fe

b/11

Au g

/11

Feb/

12A

ug/1

2Fe

b/13

Au g

/13

Feb/

14A

u g/1

4Fe

b/15

Aug

/15

Feb/

16A

u g/1

6Fe

b/17

0.2x

0.4x

0.7x

HK$

1.0x

1.3x

Link REIT Prosperity REIT

-55

152535455565758595

Jan-

07

Dec

-07

Nov

-08

Oct

-09

Sep-

10

Aug

-11

Jul-1

2

Jun-

13

May

-14

Apr

-15

Mar

-16

Feb-

17

HK$

0.8x

1.0x

1.3x

1.5x

1.7x

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

Jan/

07

Jan/

08

Jan/

09

Jan/

10

Jan/

11

Jan/

12

Jan/

13

Jan/

14

Jan/

15

Jan/

16

Jan/

17

HK$

0.2x

0.4x

0.5x

0.6x

0.8x

Sunlight REIT

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Jan-

07

Apr

-08

Aug

-09

Dec

-10

Mar

-12

Jul-1

3

Nov

-14

Feb-

16

HK$

0.3x

0.4x

0.6x

0.7x

0.9x

Source: Thomson Reuters, DBS Vickers

Page 27: China / Hong Kong Monthly Chart Book HK Property...China / Hong Kong Monthly Chart Book HK Property Page 3 Share price performance Property developer index vs HSI Property developer

China / Hong Kong Monthly Chart Book

HK Property

Page 27

Historical yield band - REITs

REITs

Champion REIT Fortune REIT

0

1

2

3

4

5

6

7

8

9

Jan-

07Ju

l-07

Jan-

08Ju

l-08

Jan-

09Ju

l-09

Jan-

10Ju

l-10

Jan-

11Ju

l-11

Jan-

12Ju

l-12

Jan-

13Ju

l-13

Jan-

14Ju

l-14

Jan-

15Ju

l-15

Jan-

16Ju

l-16

Jan-

17

HK$

Floor 24%

Ceiling 4%

Champion REIT

Mid 14%

0

2

4

6

8

10

12

14

Aug

-03

Feb-

04A

ug-0

4Fe

b-05

Aug

-05

Feb-

06A

ug-0

6Fe

b-07

Aug

-07

Feb-

08A

ug-0

8Fe

b-09

Au g

-09

Feb-

10A

ug-1

0Fe

b-11

Au g

-11

Feb-

12A

ug-1

2Fe

b-13

Aug

-13

Feb-

14A

u g-1

4Fe

b-15

Aug

-15

Feb-

16A

ug-1

6Fe

b-17

HK$

Fortune REIT

Ceiling 4%

Mid 13%

Floor 22%

Link REIT Prosperity REIT

5

15

25

35

45

55

65

75

Jan-

07

Dec

-07

Nov

-08

Sep-

09

Aug

-10

Jul-1

1

Jun-

12

May

-13

Apr

-14

Mar

-15

Feb-

16

Jan-

17

HK$

Link REIT

Ceiling 3% Mid 5%

Floor 7%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Jan/

07

Jan/

08

Jan/

09

Jan/

10

Jan/

11

Jan/

12

Jan/

13

Jan/

14

Jan/

15

Jan/

16

Jan/

17

HK$

Prosperity REIT

Ceiling 5%

Mid 11%

Floor 17%

Sunlight REIT

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Jan-

07

Apr

-08

Aug

-09

Dec

-10

Mar

-12

Jul-1

3

Nov

-14

Feb-

16

HK$

Sunlight REIT

Ceiling 5%

Mid 15%

Floor 25%

Source: Thomson Reuters, DBS Vickers

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Any important dates to look out for?

Major upcoming events

5-May Retail statistics for March 201712-May GDP 1Q1712-May IL9051 (Murray Road car park) tender close19-May Unemployment rate Feb 2017 - Apr 2017

1-Jun Retail statistics for April 201720-Jun CPI May 201720-Jun Unemployment rate Mar 2017 - May 201726-Jun Wage and payroll stat for March 201729-Jun Retail statistics for May 2017

J une 2017

May 2017

Source: Census and Statistics Department, Lands Department, HK Exchange, DBS Vickers

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Our past publications

1 Mar (SHKP ) Leader of the pack 1 Mar (Great Eagle ) Crystallises value of US office 1 Mar (Hongkong Land) FY16 final results prev iew 3 Mar (Hongkong Land) A bargain 6 Mar (Far East Consortium) Unlocking hotel value 6 Mar (HK Property ) Office supply emerging in Kowloon West 6 Mar (Hongkong Land) Stepping up pace on regional residential investments 7 Mar (Wharf Holdings) FY16 final results prev iew 7 Mar (Wheelock) FY16 final results prev iew 8 Mar (MTR Corporation) Tapping the buoyant land market 9 Mar (Champion REIT) Takeaways from Post Results NDR in Singapore 10 Mar (Wharf Holdings) Simpler is better 13 Mar (Wheelock) Residential sales to unlock value 13 Mar (Swire Properties ) FY16 final results prev iew 15 Mar (K Wah International) FY16 final results prev iew 16 Mar (Kerry Properties ) FY16 final results prev iew 17 Mar (Swire Properties ) China rentals a bright spot 17 Mar (Henderson Land ) FY16 final results prev iew 20 Mar (Kerry Properties ) Unexpected div idend hike 20 Mar (HK Property Sector) Panic buy ing 22 Mar (Henderson Land ) Value unlocking 22 Mar (K Wah International) Enhanced earnings profile, strong financial muscle 22 Mar (Lai Sun Development) FY17 interim result prev iew 22 Mar (MTR Corporation) Conclusion of early FAM rev iew 24 Mar (Wing Tai Properties) Steady climb 24 Mar (Lai Sun Development) Strong development earnings v isibility

3 Apr (HK Property Sector) Investment drive 5 Apr (HK Property ) Comparative analysis of retail mall performance 10 Apr (Link REIT) Diversify ing into Guangzhou retail property market 12 Apr (HK Property Sector) Legal loophole closed 12 Apr (Sunlight REIT) Mixed bag 18 Apr (HK Property Sector) Litmus test of local end-user demand 20 Apr (Link REIT) Steady as she goes 21 Apr (Sunlight REIT) Earnings accretion v ia favourable debt refinancing 21 Apr (Great Eagle ) Crystallises value of US office 21 Apr (Wharf Holdings) New Chapter for I Cable 27 Apr (Tai Cheung) Repulse Bay project a crown jewel

4 May (Hongkong Land) Riding on sweet office upcycle 8 May (Sino Land ) Disciplined land banking approach works

A pril 2017

May 2017

March 2017

Source: DBS Vickers

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DBSVHK recommendations are based an Absolute Total Return* Rating system, defined as follows:

STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)

BUY (>15% total return over the next 12 months for small caps, >10% for large caps)

HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps)

FULLY VALUED (negative total return i.e. > -10% over the next 12 months)

SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)

Share price appreciation + dividends Completed Date: 8 May 2017 14:17:32 (HKT) Dissemination Date: 8 May 2017 14:48:56 (HKT)

Sources for all charts and tables are DBS Vickers unless otherwise specified.

GENERAL DISCLOSURE/DISCLAIMER This report is prepared by DBS Vickers (Hong Kong) Limited (“DBSVHK”). This report is solely intended for the clients of DBS Bank Ltd., DBS Vickers Securities (Singapore) Pte Ltd. (“DBSVS”) and DBSVHK, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVHK. The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS Bank Ltd., DBSVS and DBSVHK, its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively, the “DBS Group”)) have not conducted due diligence on any of the companies, verified any information or sources or taken into account any other factors which we may consider to be relevant or appropriate in preparing the research. Accordingly, we do not make any representation or warranty as to the accuracy, completeness or correctness of the research set out in this report. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. The DBS Group, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. The DBS Group, may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies. Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed, it may not contain all material information concerning the company (or companies) referred to in this report and the DBS Group is under no obligation to update the information in this report. This publication has not been reviewed or authorized by any regulatory authority in Singapore, Hong Kong or elsewhere. There is no planned schedule or frequency for updating research publication relating to any issuer. The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that: (a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and (b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk

assessments stated therein. Please contact the primary analyst for valuation methodologies and assumptions associated with the covered companies or price targets. Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report. DBSVUSA, a US-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage in market-making.

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ANALYST CERTIFICATION

The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the

companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her

compensation was, is, or will be, directly or indirectly, related to specific recommendations or views expressed in the report. The research analyst (s)

primarily responsible for the content of this research report, in part or in whole, certifies that he or his associate1 does not serve as an officer of the

issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the real

estate investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the

management of the issuer or the new listing applicant) and the research analyst(s) primarily responsible for the content of this research report or

his associate does not have financial interests2 in relation to an issuer or a new listing applicant that the analyst reviews. DBS Group has

procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of

research reports. The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment

banking function of the DBS Group and procedures are in place to ensure that confidential information held by either the research or investment

banking function is handled appropriately. There is no direct link of DBS Group's compensation to any specific investment banking function of the

DBS Group. COMPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBSVHK and its subsidiaries do not have a proprietary position in the securities recommended/mentioned in this report as of 05 May

2017.

2. Neither DBS Bank Ltd, DBS HK nor DBSV HK market makes in equity securities of the issuer(s) or company(ies) mentioned in this Research Report.

3. DBS Bank Ltd., DBSVS, DBSVHK, DBSVUSA, their subsidiaries and/or other affiliates have a net long position exceeding 0.5% of the total issued share capital in Fortune Real Estate Investment Trust (778 HK) and Yuexiu Real Estate Investment Trust (405 HK) recommended in this report as of 02 May 2017.

4. DBS Bank Ltd., DBSVS, DBSVHK, DBSVUSA, their subsidiaries and/or other affiliates beneficially own a total of 1% of any class of common equity securities of Yuexiu Real Estate Investment Trust (405 HK) as of 02 May 2017.

5. Compensation for investment banking services: DBS Bank Ltd., DBSVS, DBSVHK, their subsidiaries and/or other affiliates of DBSVUSA have received compensation, within the past 12 months for investment banking services from Far East Consortium International Limited (35 HK) and Prosperity Real Estate Investment Trust (808 HK) as of 31 Mar 2017. DBS Bank Ltd., DBSVS, DBSVHK, their subsidiaries and/or other affiliates of DBSVUSA, within the next 3 months, will receive or intend to seek compensation for investment banking services from MTR Corporation Limited (66 HK) as of 31 Mar 2017. DBS Bank Ltd., DBSVS, DBSVHK, their subsidiaries and/or other affiliates of DBSVUSA have managed or co-managed a public offering of securities for MTR Corporation Limited (66 HK) and Far East Consortium International Limited (35 HK) in the past 12 months, as of 31 Mar 2017. DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.

6. Disclosure of previous investment recommendation produced: DBS Bank Ltd, DBSVS, DBSVHK, their subsidiaries and/or other affiliates of DBSVUSA may have published other investment recommendations in respect of the same securities / instruments recommended in this research report during the preceding 12 months. Please contact the primary analyst listed in the first page of this report to view previous investment recommendations published by DBS Bank Ltd, DBSVHK, their subsidiaries and/or other affiliates of DBSVUSA in the preceding 12 months.

1 An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the

trustee of a trust of which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions or instructions of the analyst.

2 Financial interest is defined as interests that are commonly known financial interest, such as investment in the securities in respect of an issuer or a new listing applicant, or financial accommodation arrangement between the issuer or the new listing applicant and the firm or analysis. This term does not include commercial lending conducted at arm's length, or investments in any collective investment scheme other than an issuer or new listing applicant notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant.

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RESTRICTIONS ON DISTRIBUTION

General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

Australia This report is being distributed in Australia by DBS Bank Ltd. (“DBS”) or DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”) or DBS Vickers (Hong Kong) Limited (“DBSVHK”), which are exempted from the requirement to hold an Australian Financial Services Licence under the Corporation Act 2001 (“CA”) in respect of financial services provided to the recipients. Both DBS and DBSVS are regulated by the Monetary Authority of Singapore under the laws of Singapore, and DBSVHK is regulated by the Securities and Futures Commission of Hong Kong under the laws of Hong Kong, which differ from Australian laws. Distribution of this report is intended only for “wholesale investors” within the meaning of the CA.

Hong Kong This report is being distributed in Hong Kong by DBSVHK which is licensed and regulated by the Hong Kong Securities and Futures Commission.

Indonesia This report is being distributed in Indonesia by PT DBS Vickers Sekuritas Indonesia.

Malaysia This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR"). Recipients of this report, received from ADBSR are to contact the undersigned at 603-2604 3333 in respect of any matters arising from or in connection with this report. In addition to the General Disclosure/Disclaimer found at the preceding page, recipients of this report are advised that ADBSR (the preparer of this report), its holding company Alliance Investment Bank Berhad, their respective connected and associated corporations, affiliates, their directors, officers, employees, agents and parties related or associated with any of them may have positions in, and may effect transactions in the securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory and other services for the subject companies. They may also have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and other services from the subject companies.

Wong Ming Tek, Executive Director, ADBSR

Singapore This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No. 198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from, or in connection with the report.

Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd. Research reports distributed are only intended for institutional clients only and no other person may act upon it.

United Kingdom

This report is produced by DBSVHK which is regulated by the Securities and Futures Commission of Hong Kong. This report is disseminated in the United Kingdom by DBS Vickers Securities (UK) Ltd (“DBSVUK”). DBSVUK is authorised and regulated by the Financial Conduct Authority in the United Kingdom. In respect of the United Kingdom, this report is solely intended for the clients of DBSVUK, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVUK. This communication is directed at persons having professional experience in matters relating to investments. Any investment activity following from this communication will only be engaged in with such persons. Persons who do not have professional experience in matters relating to investments should not rely on this communication.

Dubai

This research report is being distributed in The Dubai International Financial Centre (“DIFC”) by DBS Bank Ltd., (DIFC Branch) having its office at PO Box 506538, 3rd Floor, Building 3, East Wing, Gate Precinct, Dubai International Financial Centre (DIFC), Dubai, United Arab Emirates. DBS Bank Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority. This research report is intended only for professional clients (as defined in the DFSA rulebook) and no other person may act upon it.

United States This report was prepared by DBSVHK. DBSVUSA did not participate in its preparation. The research analyst(s) named on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate.

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