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Deutsche Bank Markets Research
Asia
Hong Kong
Property
Industry
HK Property Monthly
Date
7 December 2015
Industry Update
Secondary volume hit an all-time low in Nov; ASP softened
Developers accelerated the pace of launches; undercut secondary market
________________________________________________________________________________________________________________
Deutsche Bank AG/Hong Kong
Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI (P) 124/04/2015.
Tony Tsang
Research Analyst
(+852) 2203 6256
Jason Ching, CFA
Research Analyst
(+852) 2203 6205
Top picks
CK Property (1113.HK),HKD52.35 Buy
Sino Land Co (0083.HK),HKD11.70 Buy
New World Dev (0017.HK),HKD7.84 Buy
MTR Corp (0066.HK),HKD36.45 Buy
Hang Lung Properties (0101.HK),HKD18.54
Buy
Source: Deutsche Bank
Companies Featured
CK Property (1113.HK),HKD52.35 Buy
Sino Land Co (0083.HK),HKD11.70 Buy
New World Dev (0017.HK),HKD7.84 Buy
MTR Corp (0066.HK),HKD36.45 Buy
Hang Lung Properties (0101.HK),HKD18.54
Buy
Henderson Land Dev. Co. (0012.HK),HKD48.05
Buy
Hongkong Land Holdings Ltd (HKLD.SI),USD7.23
Hold
Hysan Development (0014.HK),HKD32.70 Sell
Great Eagle Hldgs (0041.HK),HKD25.40 Sell
Source: Deutsche Bank
In general, volume in the secondary market continued to be sluggish in Nov on the back of multiple project launches in the primary market. Specifically, secondary volume reached an all-time low of just 1,854, down a further 8% MoM from the previous low of 2,007 recorded in Oct. As of Dec 3, secondary volume amounted to just 39,121 YTD, implying a 21% drop as compared with 2014. Meanwhile, the residential price index compiled by the Rating and Valuation Department posted a MoM drop of 1.11% in Oct (first decline in 19 months from a historic high in Sept). This is in line with the softening trend in CCL Index, which together reaffirm the turning point of HK residential market.
Developers accelerated launches with more attractive pricing/payment options A total of 2,441 units have been launched over six new primary projects in Nov, including CK Prop’s Yuccie Square in Yuen Long (798 units), Kerry’s Bloomsway in Tuen Mun (591 units), Wheelock’s CAPRI in Tseung Kwan O (420 units), SHKP’s Park Vista 1A in Yuen Long (269 units) and King’s Hill in Sai Ying Pun (79 units), Kowloon Development’s South Coast in Aberdeen (150 units), and Henderson’s The Zutten in Ma Tau Kok (134 units). Most of these new units were launched at or below the market prices nearby, coupled with attractive payment options such as vendor financing plans for up to 95% LTV. Overall, such incentives have received positive market responses. In particular, the Yuccie Square project, which was priced below-market at HK$12,256psf with up to 80% LTV mortgage plans, has impressively received some 10,000 subscriptions of interests on its first launch; the project has so far recorded sales of 608 units (or 76% of total units launched). The strong primary market has further hit the secondary side, as a majority of secondary sellers still refused to take sufficient price cuts in order to compete for buyers. As a reference, the primary market’s share to total volume has reached a new 10-year high of 28% YTD (25% in 2014).
More retailers scaled down operations amid weak market sentiment In Oct, retail sale value fell 3% YoY to HK$37.2bn, of which sales of jewellery and watches registered a further YoY drop of 17% (HK$6.1bn). During the period, total visitor arrivals fell 3% YoY to 5.07m, with Chinese visitors arriving via IVS recording another marked YoY decline of 15% (2.2m). Overall, the outlook on retail remained dim as the softness of inbound tourism continued to be a drag. On the weak backdrop, in addition to numerous rental cuts, lately multiple retailers have announced to scale down their operations in HK, including Chow Tai Fook (jewellery), Broadway Circuits (cinema) and Burger King (fast food chain). Nevertheless, the investment market has also turned less active, with 11M15 retail property sales volume falling 29% YoY to 1,838.
We prefer names with strong defensive quality for Hong Kong properties Our top picks are CK Prop (for its relatively low land cost), Sino Land (for high net cash position and high dividend yields supported by recurrent income), and MTRC and Hang Lung Prop (for their defensive portfolios), as we believe their current share prices already factor in a residential price decline of 30%. We also like NWD for its attractive valuation and improving management track record. We remain concerned about the outlook for HK retail and hotel markets, and retain Sell on Hysan and Great Eagle. Our TPs are based on NAV discounts. Key risks: unexpected economic and political volatility.
7 December 2015
Property
HK Property Monthly
Page 2 Deutsche Bank AG/Hong Kong
Table of contents
Secondary volume hit an all-time low in Nov; ASP softened ............................................................................... 3
HK residential property market update ............................. 11
HK commercial property market update ........................... 19
HK macro update .............................................................. 22
Taking a look at valuations ................................................ 25
7 December 2015
Property
HK Property Monthly
Deutsche Bank AG/Hong Kong Page 3
Secondary volume hit an all-time low in Nov; ASP softened
Developers accelerated the pace of launches; undercut secondary market
In general, volume in the secondary market continued to be sluggish in Nov on
the back of multiple project launches in the primary market. Specifically,
secondary volume reached an all-time low of just 1,854, down a further 8%
MoM from the previous low of 2,007 recorded in Oct. As of Dec 3, secondary
volume amounted to just 39,121 YTD, implying a 21% drop as compared with
2014. Meanwhile, the residential price index compiled by the Rating and
Valuation Department posted a MoM drop of 1.11% in Oct (first decline in
19 months from a historic high in Sept). This is in line with the softening trend
in CCL Index, which together reaffirm the turning point of HK residential
market.
Figure 1: Weekend primary sales volume
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Nov-01 Nov-03 Nov-05 Nov-07 Nov-09 Nov-11 Nov-13 Nov-15
Units
Total weekend primary sales Historical Average Source: Sing Tao, HKET, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Page 4 Deutsche Bank AG/Hong Kong
Hong Kong property stocks down 2.84% MoM in November, mildly outperforming HSI by 80bp
The Hang Seng Properties Index (HSP) lost 2.84% MoM to 29,843 during
November. As compared with the Hang Seng Index (HSI), which registered a
MoM drop of 3.64% in the month, HSP slightly outperformed by 80bp. During
November, the top-performing stock was Chinese Estates (+18.22% MoM),
followed by MTRC (+2.27% MoM) and Link REIT (+1.51% MoM). On the other
hand, the bottom performer of the month was SHKP (-8.28% MoM), followed
by Wheelock (-7.59% MoM) and CK Property (-7.25% MoM).
Figure 2: One-month share price performance of HK developers/landlords
18.22%
2.27%
1.51%
-0.30%
-1.57%
-2.14%
-2.54%
-2.73%
-2.80%
-3.64%
-3.83%
-3.99%
-4.19%
-4.33%
-4.52%
-4.93%
-5.00%
-5.33%
-7.10%
-7.25%
-7.59%
-8.28%
Chinese Estates
MTRC
Link REIT
K. Wah Int'l
Wing Tai Properties
Hopewell
Great Eagle
Average
Langham Hospitality Investments
Swire Properties
Henderson Land
Wharf
Shun Tak
Sino Land
Hang Lung
Hysan Dev
Kerry Properties
Hongkong Land
New World Dev
CK Property
Wheelock
SHKP
Source: Bloomberg Finance LP, Deutsche Bank. As of 30 November, 2015.
7 December 2015
Property
HK Property Monthly
Deutsche Bank AG/Hong Kong Page 5
Figure 3: Three-month share price performance for HK developers/landlords
18.22%
14.72%
4.97%
4.20%
3.78%
3.77%
3.32%
2.75%
1.71%
0.20%
0.00%
-0.17%
-1.57%
-2.03%
-2.95%
-4.29%
-4.69%
-5.06%
-5.82%
-6.91%
-7.02%
-12.65%
Chinese Estates
Link REIT
Hysan Dev
MTRC
Hopewell
Hang Lung
Great Eagle
Hongkong Land
Wharf
Average
Henderson Land
Sino Land
Wing Tai Properties
New World Dev
SHKP
K. Wah Int'l
Wheelock
Swire Properties
Kerry Properties
CK Property
Langham Hospitality Investments
Shun Tak
Source: Bloomberg Finance LP, Deutsche Bank. As of 30 November, 2015.
Figure 4: Six-month share price performance for HK developers/landlords
4.78%
2.80%
-3.10%
-7.49%
-9.41%
-13.40%
-14.77%
-15.02%
-16.03%
-16.25%
-16.66%
-16.82%
-17.42%
-17.51%
-19.86%
-25.34%
-25.88%
-27.47%
-29.03%
-32.46%
-33.62%
Link REIT
Chinese Estates
MTRC
Hysan Dev
Hopewell
Sino Land
Swire Properties
Great Eagle
Henderson Land
Wing Tai Properties
Average
Wharf
Hongkong Land
Langham Hospitality Investments
Wheelock
New World Dev
Hang Lung
SHKP
K. Wah Int'l
Kerry Properties
Shun Tak
Source: Bloomberg Finance LP, Deutsche Bank. As of 30 November, 2015.
7 December 2015
Property
HK Property Monthly
Page 6 Deutsche Bank AG/Hong Kong
Figure 5: YTD share price performance for HK developers/landlords
13.21%
5.18%
4.73%
-1.39%
-1.75%
-2.88%
-3.17%
-3.27%
-5.48%
-7.46%
-8.15%
-8.27%
-12.40%
-13.45%
-14.58%
-16.51%
-17.26%
-18.49%
-19.44%
-20.54%
-22.38%
MTRC
Hongkong Land
Chinese Estates
Great Eagle
Swire Properties
Link REIT
Hopewell
Henderson Land
Hysan Dev
Wheelock
Sino Land
Average
Wing Tai Properties
New World Dev
Shun Tak
Hang Lung
Langham Hospitality Investments
K. Wah Int'l
SHKP
Wharf
Kerry Properties
Source: Bloomberg Finance LP, Deutsche Bank. As of 30 November, 2015.
Figure 6: 12-month share price performance for HK developers/landlords
24.89%
15.57%
2.75%
1.01%
-3.17%
-4.55%
-4.60%
-6.64%
-8.65%
-9.24%
-9.59%
-13.78%
-14.10%
-15.96%
-16.63%
-17.75%
-20.46%
-21.57%
-21.82%
-22.06%
-27.65%
Chinese Estates
MTRC
Hongkong Land
Henderson Land
Hopewell
Link REIT
Great Eagle
Swire Properties
Hysan Dev
Average
Sino Land
Wing Tai Properties
Wheelock
SHKP
New World Dev
Langham Hospitality Investments
Wharf
Shun Tak
Kerry Properties
Hang Lung
K. Wah Int'l
Source: Bloomberg Finance LP, Deutsche Bank. As of 30 November, 2015.
7 December 2015
Property
HK Property Monthly
Deutsche Bank AG/Hong Kong Page 7
Figure 7: HK property – valuation table
DB Trade Report Mkt Cap
12M Daily T/O
4 Dec Target Implied Est. NAV EPS PE(x)
Company Ticker Rating Ccy Ccy USDm USDm Price Price Upside NAV Disc FY14 FY15E FY16E FY14 FY15E FY16E
Covered
SHKP 16 HK Buy HKD HKD 36,139 66.6 96.80 133.00 37% 166.3 -42% 7.95 7.07 8.01 12.2 13.7 12.1
MTRC 66 HK Buy HKD HKD 27,537 14.9 36.45 40.74 12% 58.2 -37% 1.99 1.95 1.87 18.3 18.7 19.4
CK Property 1113 HK Buy HKD HKD 26,071 93.8 52.35 75.00 43% 100.0 -48% 3.64 3.83 4.31 14.4 13.7 12.2
Henderson Land 12 HK Buy HKD HKD 20,501 23.1 48.05 56.18 17% 80.3 -40% 3.12 2.99 3.15 15.4 16.1 15.3
Wharf 4 HK Hold HKD HKD 17,326 34.8 44.30 49.82 12% 83.0 -47% 3.38 3.83 4.09 13.1 11.6 10.8
Hongkong Land HKL SP Hold USD USD 16,893 19.0 7.19 7.20 0% 9.7 -26% 0.40 0.36 0.38 18.2 20.0 19.0
Link REIT 823 HK Hold HKD HKD 13,573 35.0 46.70 42.00 -10% 49.1 -5% 1.66 1.77 1.93 28.2 26.3 24.1
Hang Lung 101 HK Buy HKD HKD 10,758 17.1 18.54 30.16 63% 40.2 -54% 2.33 1.36 1.27 8.0 13.7 14.6
Sino Land 83 HK Buy HKD HKD 9,239 8.4 11.70 15.73 34% 21.0 -44% 0.83 0.88 0.88 14.0 13.3 13.3
New World Dev 17 HK Buy HKD HKD 9,101 20.9 7.84 13.00 66% 20.0 -61% 0.75 0.75 0.81 10.4 10.4 9.6
Hysan Dev 14 HK Sell HKD HKD 4,476 6.2 32.70 27.66 -15% 46.1 -29% 2.03 2.07 2.03 16.1 15.8 16.1
Kerry Properties 683 HK Hold HKD HKD 3,992 7.3 21.40 29.00 36% 52.7 -59% 2.58 2.46 2.89 8.3 8.7 7.4
Great Eagle 41 HK Sell HKD HKD 2,178 1.3 25.40 19.10 -25% 47.8 -47% 3.00 2.43 2.36 8.5 10.5 10.8
Shun Tak 242 HK Hold HKD HKD 1,205 2.1 3.07 3.80 24% 11.0 -72% 0.71 0.43 0.44 4.3 7.2 6.9
Not Rated
Swire Properties 1972 HK NR HKD HKD 17,550 7.9 23.25 NA NA NA NA 1.18 1.31 1.29 19.7 17.7 18.1
Wheelock 20 HK NR HKD HKD 8,743 6.8 33.35 NA NA NA NA 4.55 4.85 5.07 7.3 6.9 6.6
Chinese Estates 127 HK NR HKD HKD 5,107 0.3 20.75 NA NA NA NA NA NA NA
Hopewell 54 HK NR HKD HKD 3,054 1.8 27.15 NA NA NA NA 1.45 1.70 2.14 18.8 16.0 12.7
K. Wah Int'l 173 HK NR HKD HKD 1,202 0.9 3.28 NA NA NA NA 0.25 0.32 0.52 13.1 10.3 6.3
Wing Tai Properties 369 HK NR HKD HKD 760 0.2 4.39 NA NA NA NA 0.34 0.30 0.24 12.9 14.6 18.3
Langham Hospitality 1270 HK NR HKD HKD 730 0.5 2.77 NA NA NA NA 0.23 0.17 0.17 12.0 16.3 16.3
Overall average -44% 13.7 14.1 13.5 Source: Deutsche Bank estimates, Company data, Bloomberg Finance LP Consensus estimates for companies NR
7 December 2015
Property
HK Property Monthly
Page 8 Deutsche Bank AG/Hong Kong
Figure 8: HK property – valuations table (cont.)
EPS growth % BVPS PB(x) DPS Dividends yield % Net gearing %
Company Ticker FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E
Covered
SHKP 16 HK 0 -11 13 152.2 159.4 159.5 0.6 0.6 0.6 3.4 3.4 3.4 3.5 3.5 3.5 15.7 11.2 11.7
MTRC 66 HK 34 -2 -4 28.1 28.7 29.4 1.3 1.3 1.2 1.1 1.2 1.2 2.9 3.2 3.3 17.9 22.7 24.8
CK Property 1113 HK NA 5 12 58.7 61.0 63.6 0.9 0.9 0.8 0.0 1.5 1.7 0.0 2.9 3.3 15.6 10.4 10.4
Henderson Land 12 HK 2 -4 5 79.4 81.2 83.0 0.6 0.6 0.6 1.1 1.2 1.3 2.3 2.5 2.7 18.4 17.0 14.9
Wharf 4 HK -7 13 7 100.8 102.9 105.3 0.4 0.4 0.4 1.8 1.8 1.8 4.1 4.1 4.1 19.4 18.1 13.6
Hongkong Land HKL SP -1 -9 6 11.7 11.9 12.0 0.6 0.6 0.6 0.2 0.2 0.2 2.6 2.7 2.8 9.6 12.7 12.7
Link REIT 823 HK 13 7 9 41.7 51.5 51.5 1.1 0.9 0.9 1.7 1.8 1.9 3.5 3.9 4.1 14.4 14.0 13.8
Hang Lung 101 HK 95 -42 -6 29.5 30.1 30.6 0.6 0.6 0.6 0.8 0.8 0.8 4.1 4.2 4.2 NA 2.2 4.1
Sino Land 83 HK -25 5 0 18.6 19.5 19.9 0.6 0.6 0.6 0.5 0.5 0.5 4.3 4.3 4.3 NA NA NA
New World Dev 17 HK -21 0 8 18.4 19.9 20.6 0.4 0.4 0.4 0.4 0.4 0.4 5.4 5.4 5.4 29.3 25.9 33.7
Hysan Dev 14 HK 6 2 -2 63.0 63.6 64.3 0.5 0.5 0.5 1.2 1.3 1.3 3.8 3.8 3.8 4.0 3.1 3.1
Kerry Properties 683 HK 230 -5 17 55.4 57.0 58.8 0.4 0.4 0.4 0.9 0.9 1.1 4.2 4.2 4.9 24.5 31.8 31.5
Great Eagle 41 HK 14 -19 -3 81.0 84.6 88.1 0.3 0.3 0.3 0.7 0.6 0.6 2.9 2.5 2.3 25.8 21.0 19.1
Shun Tak 242 HK 471 -40 4 8.7 9.2 9.5 0.4 0.3 0.3 0.2 0.1 0.1 7.0 4.2 4.3 3.0 5.7 16.9
Not Rated
Swire Properties 1972 HK 17 11 -2 35.4 36.1 36.8 0.7 0.6 0.6 0.6 0.7 0.7 2.7 2.9 3.0 16.5 17.1 16.9
Wheelock 20 HK 15 7 4 86.6 99.1 103.4 0.4 0.3 0.3 1.1 1.2 1.2 3.3 3.5 3.7 52.8 41.5 37.2
Chinese Estates 127 HK NA NA NA NA NA NA NA NA NA NA NA NA
Hopewell 54 HK -2 17 26 49.4 50.8 54.6 0.5 0.5 0.5 1.1 1.1 1.2 4.2 4.2 4.5 0.1 NA NA
K. Wah Int'l 173 HK -52 28 62 8.5 8.4 8.9 0.4 0.4 0.4 0.2 0.2 0.2 4.6 4.6 4.6 40.1 36.4 21.4
Wing Tai Properties 369 HK 10 -12 -20 NA NA NA 0.1 0.1 0.1 3.2 3.2 3.2 NA NA NA
Langham Hospitality 1270 HK -2 -26 0 5.1 5.2 5.1 0.5 0.5 0.5 0.3 0.2 0.2 10.4 8.7 8.7 63.0 63.0 63.0
Overall average 42 -4 7 0.6 0.6 0.6 3.9 3.9 4.0 21.8 20.8 20.5 Source: Deutsche Bank estimates, Company data, Bloomberg Finance LP Consensus estimates for companies NR
7 December 2015
Property
HK Property Monthly
Deutsche Bank AG/Hong Kong Page 9
Figure 9: HK Property disc to NAV
-80%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
Jan
-92
Dec
-93
Dec
-95
Dec
-97
Dec
-99
Dec
-01
Dec
-03
Dec
-05
Dec
-07
Dec
-09
Dec
-11
Dec
-13
Dec
-15
Sector Disc to NAV -1SD Avg +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Figure 10: HK Property P/E Figure 11: HK Property P/B
0
5
10
15
20
25
30
35
Jan
-92
Dec
-93
Dec
-95
Dec
-97
Dec
-99
Dec
-01
Dec
-03
Dec
-05
Dec
-07
Dec
-09
Dec
-11
Dec
-13
Dec
-15
Sector P/E -1SD Avg +1SD
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
Jan
-92
Dec
-93
Dec
-95
Dec
-97
Dec
-99
Dec
-01
Dec
-03
Dec
-05
Dec
-07
Dec
-09
Dec
-11
Dec
-13
Dec
-15
Sector P/B -1SD Avg +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Page 10 Deutsche Bank AG/Hong Kong
Figure 12: Developer discount to NAV Figure 13: Landlord discount to NAV
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
Jan
-92
Dec
-93
Dec
-95
Dec
-97
Dec
-99
Dec
-01
Dec
-03
Dec
-05
Dec
-07
Dec
-09
Dec
-11
Dec
-13
Dec
-15
Developer Disc to NAV -1SD Avg +1SD
-80%
-60%
-40%
-20%
0%
20%
40%
Jan
-92
Dec
-93
Dec
-95
Dec
-97
Dec
-99
Dec
-01
Dec
-03
Dec
-05
Dec
-07
Dec
-09
Dec
-11
Dec
-13
Dec
-15
Landlord Disc to NAV -1SD Avg +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
Figure 14: Developer P/E Figure 15: Landlord P/E
0
5
10
15
20
25
30
35
Jan
-92
Dec
-93
Dec
-95
Dec
-97
Dec
-99
Dec
-01
Dec
-03
Dec
-05
Dec
-07
Dec
-09
Dec
-11
Dec
-13
Dec
-15
Developer P/E -1SD Avg +1SD
0
5
10
15
20
25
30
35
40
45
50
Jan
-92
Dec
-93
Dec
-95
Dec
-97
Dec
-99
Dec
-01
Dec
-03
Dec
-05
Dec
-07
Dec
-09
Dec
-11
Dec
-13
Dec
-15
Landlord P/E -1SD Avg +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
Figure 16: Developer P/B Figure 17: Landlord P/B
0.0
0.5
1.0
1.5
2.0
2.5
Jan
-92
Dec
-93
Dec
-95
Dec
-97
Dec
-99
Dec
-01
Dec
-03
Dec
-05
Dec
-07
Dec
-09
Dec
-11
Dec
-13
Dec
-15
Developer P/B -1SD Avg +1SD
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
Jan
-92
Dec
-93
Dec
-95
Dec
-97
Dec
-99
Dec
-01
Dec
-03
Dec
-05
Dec
-07
Dec
-09
Dec
-11
Dec
-13
Dec
-15
Landlord P/B -1SD Avg +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Deutsche Bank AG/Hong Kong Page 11
HK residential property market update
Figure 18: No. of transactions in primary market Figure 19: No. of transactions in secondary market
-
2
4
6
8
10
12
14
16
18
20
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Ja
n-9
9
Ja
n-0
0
Ja
n-0
1
Ja
n-0
2
Ja
n-0
3
Ja
n-0
4
Ja
n-0
5
Ja
n-0
6
Ja
n-0
7
Ja
n-0
8
Ja
n-0
9
Ja
n-1
0
Ja
n-1
1
Ja
n-1
2
Ja
n-1
3
Ja
n-1
4
Ja
n-1
5
Volume (# transactions) - LHS Average Volume (# transactions) - LHS
Average Value Per Transaction (HK$mn)
HK$ MUnit
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Jan-9
9
Jan-0
0
Jan-0
1
Jan-0
2
Jan-0
3
Jan-0
4
Jan-0
5
Jan-0
6
Jan-0
7
Jan-0
8
Jan-0
9
Jan-1
0
Jan-1
1
Jan-1
2
Jan-1
3
Jan-1
4
Jan-1
5
Volume (# transactions) - LHS Average Volume (# transactions) - LHS
Average Value Per Transaction (HK$mn)
HK$ MUnit
Source: Midland, Deutsche Bank
Source: Midland, Deutsche Bank
Figure 20: Annual residential volume - breakdown
10-year average: 13,057 units
5-year average: 12,708 units
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000Units
Source: Midland, Deutsche Bank
Figure 21: Annual residential volume - breakdown
Type 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 15YTD
Private – Primary 21,997 16,379 20,563 26,489 27,378 25,874 15,071 12,158 16,218 8,863 14,715 12,917 10,854 12,961 9,986 16,822 14,915
HOS/PSPS/HS 14,614 8,979 12,647 1,300 0 0 0 0 1,066 822 0 809 0 0 1,041 3 20
Private + HOS/PSPS/HS 36,611 25,358 33,210 27,789 27,378 25,874 15,071 12,158 17,284 9,685 14,715 13,726 10,854 12,961 11,027 16,825 14,935
Private – Secondary 58,239 50,767 50,983 48,095 46,131 76,668 88,337 70,209 100,300 87,993 102,298 183,805 68,366 70,183 41,784 49,538 39,121
Total 94,850 76,125 84,193 75,884 73,509 102,542 103,408 82,367 117,584 97,678 117,013 197,531 79,220 83,144 52,811 66,363 54,056
Source: Midland, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Page 12 Deutsche Bank AG/Hong Kong
Figure 22: CCL index
20
40
60
80
100
120
140
160
Fe
b-9
4
Mar-
95
Ap
r-96
Ma
y-97
Ju
n-9
8
Ju
l-99
Au
g-0
0
Se
p-0
1
Oct-
02
No
v-0
3
De
c-0
4
Ja
n-0
6
Fe
b-0
7
Mar-
08
Apr-
09
May-
10
Ju
n-1
1
Ju
l-12
Au
g-1
3
Se
p-1
4
Oct-
15
CCL Index
CCL(LHS) Average
Source: Centaline, Deutsche Bank
Figure 23: Weekend primary sales volume Figure 24: Weekly secondary volume (top-35 estates)
0
100
200
300
400
500
600
700
800
900
Jan-14 Apr-14 Aug-14 Nov-14 Mar-15 Jun-15 Oct-15
Units
10
30
50
70
90
110
130
Jan-14 Apr-14 Aug-14 Nov-14 Mar-15 Jun-15 Oct-15
Units
Source: Sing Tao, HKET, Deutsche Bank
Source: Midland, Deutsche Bank
Figure 25: Number of confirmor’s transactions Figure 26: Confirmors’ transactions since SSD
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
0
200
400
600
800
1,000
1,200
Sep
-98
Sep
-99
Sep
-00
Sep
-01
Sep
-02
Sep
-03
Sep
-04
Sep
-05
Sep
-06
Sep
-07
Sep
-08
Sep
-09
Sep
-10
Sep
-11
Sep
-12
Sep
-13
Sep
-14
Sep
-15
No of Confirmor's Transactions - LHS
% of Confirmor's Transactions in Secondary Market - RHS
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
0
100
200
300
400
De
c-1
0
Ma
r-1
1
Ju
n-1
1
Se
p-1
1
De
c-1
1
Ma
r-1
2
Ju
n-1
2
Se
p-1
2
De
c-1
2
Ma
r-1
3
Jun
-13
Se
p-1
3
De
c-1
3
Ma
r-1
4
Ju
n-1
4
Se
p-1
4
De
c-1
4
Ma
r-1
5
Ju
n-1
5
Se
p-1
5
No of Confirmor's Transactions - LHS% of Confirmor's Transactions in Secondary Market - RHS
Source: Midland, Deutsche Bank
Source: Midland, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Deutsche Bank AG/Hong Kong Page 13
Figure 27: HK rating & valuation department residential
price indices – all residential
Figure 28: HK rating & valuation department residential
price indices – class A residential
0
50
100
150
200
250
300
350
Ja
n 9
3
Ja
n 9
4
Ja
n 9
5
Ja
n 9
6
Ja
n 9
7
Ja
n 9
8
Ja
n 9
9
Ja
n 0
0
Ja
n 0
1
Ja
n 0
2
Ja
n 0
3
Ja
n 0
4
Ja
n 0
5
Ja
n 0
6
Ja
n 0
7
Ja
n 0
8
Ja
n 0
9
Ja
n 1
0
Ja
n 1
1
Ja
n 1
2
Ja
n 1
3
Ja
n 1
4
Ja
n 1
5
All Residential
0
50
100
150
200
250
300
350
400
Ja
n-9
3
Ja
n-9
4
Ja
n-9
5
Ja
n-9
6
Ja
n-9
7
Ja
n-9
8
Ja
n-9
9
Ja
n-0
0
Ja
n-0
1
Ja
n-0
2
Ja
n-0
3
Jan
-04
Jan
-05
Jan
-06
Jan
-07
Jan
-08
Ja
n-0
9
Ja
n-1
0
Ja
n-1
1
Ja
n-1
2
Ja
n-1
3
Ja
n-1
4
Ja
n-1
5
Class A Residential
Source: CEIC, Deutsche Bank
Source: CEIC, Deutsche Bank
Figure 29: HK rating & valuation department residential
price indices – class B residential
Figure 30: HK rating & valuation department residential
price indices – class C residential
0
50
100
150
200
250
300
350
Ja
n 9
3
Ja
n 9
4
Ja
n 9
5
Ja
n 9
6
Ja
n 9
7
Ja
n 9
8
Ja
n 9
9
Ja
n 0
0
Ja
n 0
1
Ja
n 0
2
Ja
n 0
3
Ja
n 0
4
Ja
n 0
5
Ja
n 0
6
Ja
n 0
7
Ja
n 0
8
Ja
n 0
9
Ja
n 1
0
Ja
n 1
1
Ja
n 1
2
Ja
n 1
3
Ja
n 1
4
Ja
n 1
5
Class B Residential
0
50
100
150
200
250
300Ja
n 9
3
Ja
n 9
4
Ja
n 9
5
Ja
n 9
6
Ja
n 9
7
Ja
n 9
8
Ja
n 9
9
Ja
n 0
0
Ja
n 0
1
Ja
n 0
2
Ja
n 0
3
Ja
n 0
4
Ja
n 0
5
Ja
n 0
6
Ja
n 0
7
Ja
n 0
8
Ja
n 0
9
Ja
n 1
0
Ja
n 1
1
Ja
n 1
2
Ja
n 1
3
Ja
n 1
4
Ja
n 1
5
Class C Residential
Source: CEIC, Deutsche Bank
Source: CEIC, Deutsche Bank
Figure 31: HK rating & valuation department residential
price indices – class D residential
Figure 32: HK rating & valuation department residential
price indices – class E residential
0
50
100
150
200
250
300
Jan 9
3
Jan 9
4
Ja
n 9
5
Jan 9
6
Jan 9
7
Jan 9
8
Jan 9
9
Jan 0
0
Jan 0
1
Ja
n 0
2
Jan 0
3
Jan 0
4
Jan 0
5
Jan 0
6
Jan 0
7
Jan 0
8
Ja
n 0
9
Jan 1
0
Jan 1
1
Jan 1
2
Jan 1
3
Jan 1
4
Jan 1
5
Class D Residential
0
50
100
150
200
250
300
350
Jan 9
3
Jan 9
4
Jan 9
5
Jan 9
6
Jan 9
7
Jan 9
8
Ja
n 9
9
Jan 0
0
Jan 0
1
Jan 0
2
Jan 0
3
Jan 0
4
Jan 0
5
Ja
n 0
6
Jan 0
7
Jan 0
8
Jan 0
9
Jan 1
0
Jan 1
1
Jan 1
2
Ja
n 1
3
Jan 1
4
Jan 1
5
Class E Residential
Source: CEIC, Deutsche Bank
Source: CEIC, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Page 14 Deutsche Bank AG/Hong Kong
Figure 33: Trend of home rents (HK$ psf)
8
10
12
14
16
18
20
22
24
26
28
Jan-0
0
Jan-0
1
Jan-0
2
Jan-0
3
Jan-0
4
Jan-0
5
Jan-0
6
Jan-0
7
Jan-0
8
Jan-0
9
Jan-1
0
Jan-1
1
Jan-1
2
Jan-1
3
Jan-1
4
Jan-1
5
Source: Midland, Deutsche Bank
Figure 34: Private property market yield (%pa) for
domestic premise
Figure 35: Difference between mortgage yield and rental
yield
2
3
4
5
6
7
Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
%
Class A Class B Class C Class D Class E
-5
-4
-3
-2
-1
0
1
2
3
4
5
Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
%
Class A Class B Class C Class D Class E
Source: Rating and Valuation Department, Deutsche Bank
Source: Rating and Valuation Department, Deutsche Bank
Figure 36: Residential prices and real mortgage rates Figure 37: Residential prices and nominal mortgage rates
-10%
-5%
0%
5%
10%
15%
20%
0
50
100
150
200
250
300
350
Jan-9
3
Jan-9
4
Jan-9
5
Jan-9
6
Jan-9
7
Jan-9
8
Jan-9
9
Jan-0
0
Jan-0
1
Jan-0
2
Jan-0
3
Jan-0
4
Jan-0
5
Jan-0
6
Jan-0
7
Jan-0
8
Jan-0
9
Jan-1
0
Jan-1
1
Jan-1
2
Jan-1
3
Jan-1
4
Jan-1
5
Residential Property Prices Index (1999=100)(LHS) Real Mortgage Rate(RHS)
0%
2%
4%
6%
8%
10%
12%
14%
0
50
100
150
200
250
300
350
Jan-9
3
Jan-9
4
Jan-9
5
Jan-9
6
Jan-9
7
Jan-9
8
Jan-9
9
Jan-0
0
Jan-0
1
Jan-0
2
Jan-0
3
Jan-0
4
Jan-0
5
Jan-0
6
Jan-0
7
Jan-0
8
Jan-0
9
Jan-1
0
Jan-1
1
Jan-1
2
Jan-1
3
Jan-1
4
Jan-1
5
Residential Property Prices Index (1999=100)(LHS) HK Mortgage Rate (Nominal)
Source: RV&D, Bloomberg Finance LP, Midland, Deutsche Bank
Source: RV&D, Bloomberg Finance LP, Midland, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Deutsche Bank AG/Hong Kong Page 15
Transacted prices of major housing estates
Figure 38: Taikoo Shing (HK$ psf) Figure 39: South Horizons (HK$ psf)
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Sep-95 Sep-97 Sep-99 Sep-01 Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 Sep-13 Sep-15
Taikoo Shing
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Sep-95 Sep-97 Sep-99 Sep-01 Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 Sep-13 Sep-15
South Horizons
Source: Midland, Deutsche Bank
Source: Midland, Deutsche Bank
Figure 40: Whampoa Garden (HK$ psf) Figure 41: Mei Foo Sun Chuen (HK$ psf)
1,000
3,000
5,000
7,000
9,000
11,000
13,000
Sep-95 Sep-97 Sep-99 Sep-01 Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 Sep-13 Sep-15
Whampoa Garden
1,000
3,000
5,000
7,000
9,000
Sep-95 Sep-97 Sep-99 Sep-01 Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 Sep-13 Sep-15
Mei Foo Sun Chuen
Source: Midland, Deutsche Bank
Source: Midland, Deutsche Bank
Figure 42: Sceneway Garden (HK$ psf) Figure 43: Telford Garden (HK$ psf)
1,000
3,000
5,000
7,000
9,000
11,000
Sep-95 Sep-97 Sep-99 Sep-01 Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 Sep-13 Sep-15
Sceneway Garden
1,000
3,000
5,000
7,000
9,000
11,000
Sep-95 Sep-97 Sep-99 Sep-01 Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 Sep-13 Sep-15
Telford Gardens
Source: Midland, Deutsche Bank
Source: Midland, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Page 16 Deutsche Bank AG/Hong Kong
Figure 44: Luk Yeung Sun Chuen (HK$ psf) Figure 45: Kingswood Villas (HK$ psf)
1,000
3,000
5,000
7,000
9,000
11,000
13,000
Sep-95 Sep-97 Sep-99 Sep-01 Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 Sep-13 Sep-15
Luk Yeung Sun Chuen
0
2,000
4,000
6,000
8,000
Sep-95 Sep-97 Sep-99 Sep-01 Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 Sep-13 Sep-15
Kingswood Villas
Source: Midland, Deutsche Bank
Source: Midland, Deutsche Bank
Figure 46: Metro City (HK$ psf) Figure 47: Sunshine City (HK$ psf)
1,000
3,000
5,000
7,000
9,000
11,000
Sep-97 Sep-99 Sep-01 Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 Sep-13 Sep-15
Metro City
1,000
3,000
5,000
7,000
9,000
11,000
Sep-95 Sep-97 Sep-99 Sep-01 Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 Sep-13 Sep-15
Sunshine City
Source: Midland, Deutsche Bank
Source: Midland, Deutsche Bank
Figure 48: City one Shatin (HK$ psf) Figure 49: Discovery Park (HK$ psf)
1,000
3,000
5,000
7,000
9,000
11,000
Sep-95 Sep-97 Sep-99 Sep-01 Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 Sep-13 Sep-15
City one shatin
0
2000
4000
6000
8000
10000
12000
Sep-95 Sep-97 Sep-99 Sep-01 Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 Sep-13 Sep-15
Discovery Park
Source: Midland, Deutsche Bank
Source: Midland, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Deutsche Bank AG/Hong Kong Page 17
Figure 50: Future residential supply
-
10
20
30
40
50
60
70
80
90
1Q05 1Q06 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 1Q15
('000 units)
Total Available Completed but unsold
Under construction and unsold Units from disposed site where construction may start anytime Source: Deutsche Bank, R&VD
Figure 51: Primary unsold inventory data (in units)
4,000
8,000
12,000
16,000
20,000
24,000
28,000
Sep-98 Sep-00 Sep-02 Sep-04 Sep-06 Sep-08 Sep-10 Sep-12 Sep-14
Units
Source: Centaline, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Page 18 Deutsche Bank AG/Hong Kong
Figure 52: Land sale in fiscal year 2015/16 (Apr-15 to Mar-16)
Lot No. Location Use Site Area (Ha)
Site Area (sf)
Launch Schedule
Rolled Over Sites
(i) Residential
TPTL 226 Chong San Road, Pak Shek Kok, Tai Po Residential R2 1.71 184,290 K. Wah: HK$3bn
TPTL 227 Chong San Road, Pak Shek Kok, Tai Po Residential R2 2.87 308,927 1H
TPTL 228 Fo Yin Road, Pak Shek Kok, Tai Po Residential R2 1.08 116,144 1H
NKIL 6534 Junction of Fuk Wa Street / Camp Street / Fuk Wing Street, Cheung Sha Wan, Kowloon
Residential R1 0.32 34,154 Tender Close: 29 Jan
NKIL 6542 Yin Ping Road, Tai Wo Ping, Kowloon Residential R2 2.04 219,596 Shimao: HK$7.02bn
TPTL 223 Lo Fai Road, Tai Po Residential R3 2.19 235,732 1H
TPTL 229 Lo Fai Road, Tai Po Residential R3 1.03 110,869 1H
RBL 1201 Wong Ma Kok Road, Stanley, Hong Kong Residential R3 2.53 272,329 2H
RBL 1202 Wong Ma Kok Road, Stanley, Hong Kong Residential R3 0.42 45,209 2H
TMTL 523 Castle Peak Road – Tai Lam, Tuen Mun Residential R2 0.70 75,348 2H
(iii) Commercial/Business
AIL 462 Yip Kan Street and Wong Chuk Hang Road, Wong Chuk Hang, Hong Kong
Business 0.18 18,945 2H
New Sites
(i) Residential
Lot 1066 in DD 103 Au Tau, Yuen Long Residential R3 2.85 306,236 Tender Close: 22 Jan
TMTL 542 Castle Peak Road – Castle Peak Bay, Area 48, Tuen Mun Residential R3 0.82 88,157 Poly-H: HK$1.73bn
TYTL 190 Sai Shan Road, Tsing Yi Residential R1 0.62 66,737 Failed
TPTL 230 Tai Po Road, Tai Po Kau, Tai Po Residential R3 2.70 290,628 2H
TMTL 516 Tsing Ha Lane, Castle Peak Road – Castle Peak Bay, Area 20, Tuen Mun
Residential R2 0.61 65,660 2H
TMTL 497 So Kwun Wat Road, Area 56, Tuen Mun Residential R2 0.73 78,685 Tender Close: 18 Dec
KIL 11257 Sheung Shing Street, Ho Man Tin, Kowloon Residential R1 0.91 97,952 2H
TPTL 221 Shan Tong Road, Lai Chi Shan, Tai Po Residential R2 3.99 429,484 Tender Close: 5 Feb
NKIL 6533 Lung Cheung Road, Beacon Hill, Kowloon Residential R3 2.18 234,655 2H
STTL 611 Whitehead, Ma On Shan, Sha Tin Residential R3 0.46 49,773 2H
STTL 609 To Shek Street, Sha Tin Residential R2 0.88 94,185 2H
STTL 610 Tai Po Road – Sha Tin Heights, Sha Tin Residential R3 0.29 31,216 2H
YTIL 44 Junction of Shung Shun Street and Yan Yue Wai, Yau Tong, Kowloon
Residential R2 1.06 114,346 2H
(ii) Commercial/Business
YLTL 532 Junction of Wang Yip Street West and Hong Yip Street, Tung Tau Industrial Area, Yuen Long
Business 0.92 99,029 Tender Close: 18 Dec
KCTL 517 Tai Lin Pai Road, Kwai Chung Commercial 0.12 13,003 2H
NKIL 6505 King Lam Street, Cheung Sha Wan, Kowloon Business 0.77 83,098 2H
NKIL 6547 Kai Tak Area 4C Site 5, Kowloon Hotel 0.93 100,536 2H
Additional Sites
(i) Residential
TMTL 546 Castle Peak Road – So Kwun Wat, Area 48, Tuen Mun Residential R2 2.72 292,781 2H
TMTL 547 Castle Peak Road – So Kwun Wat, Area 48, Tuen Mun Residential R2 2.18 234,655 2H
(ii) Business
STTL 617 On Yiu Street, Shek Mun, Sha Tin Business 0.17 18,299 SHKP: HK$675.5mn
Source: The Lands Department, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Deutsche Bank AG/Hong Kong Page 19
HK commercial property market update
Figure 53: Savills residential indices Figure 54: Savills Grade A office indices
50
100
150
200
250
300
350
400
450
500
1Q
92
1Q
93
1Q
94
1Q
95
1Q
96
1Q
97
1Q
98
1Q
99
1Q
00
1Q
01
1Q
02
1Q
03
1Q
04
1Q
05
1Q
06
1Q
07
1Q
08
1Q
09
1Q
10
1Q
11
1Q
12
1Q
13
1Q
14
1Q
15
Savills Residential Indices
Luxury Residential Rent Luxury Residential Price Mass Residential Price
50
100
150
200
250
300
350
1Q
92
1Q
93
1Q
94
1Q
95
1Q
96
1Q
97
1Q
98
1Q
99
1Q
00
1Q
01
1Q
02
1Q
03
1Q
04
1Q
05
1Q
06
1Q
07
1Q
08
1Q
09
1Q
10
1Q
11
1Q
12
1Q
13
1Q
14
1Q
15
Savills Grade A Office Indices
Grade 'A' Office Rent Grade 'A' Office Price
Source: Savills, Deutsche Bank
Source: Savills, Deutsche Bank
Figure 55: Savills retail indices Figure 56: Grade A office property yield
50
100
150
200
250
300
350
400
1Q
92
1Q
93
1Q
94
1Q
95
1Q
96
1Q
97
1Q
98
1Q
99
1Q
00
1Q
01
1Q
02
1Q
03
1Q
04
1Q
05
1Q
06
1Q
07
1Q
08
1Q
09
1Q
10
1Q
11
1Q
12
1Q
13
1Q
14
1Q
15
Savills Retail Indices
Prime Street Shop Rent Shopping Centre Rent
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
Average
+1SD
-1SD
Source: Savills, Deutsche Bank
Source: CEIC, Rating & Valuation Department, Deutsche Bank
Figure 57: Retail property yield Figure 58: Grade A and B office yield
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
Average
+1SD
-1SD
2
3
4
5
6
7
8
9
10
Grade A yield Grade B yield
Source: CEIC, Rating & Valuation Department, Deutsche Bank
Source: CEIC, Rating & Valuation Department, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Page 20 Deutsche Bank AG/Hong Kong
Figure 59: Retail sales value and volume index Figure 60: Central office cap value index vs. rental index
-
50
100
150
200
250
300
350
Jan-8
1
Jan-8
3
Jan-8
5
Jan-8
7
Jan-8
9
Jan-9
1
Jan-9
3
Jan-9
5
Jan-9
7
Jan-9
9
Jan-0
1
Jan-0
3
Jan-0
5
Jan-0
7
Jan-0
9
Jan-1
1
Jan-1
3
Jan-1
5
HK: Retail Sales Value Index: All Retail Outlets (10/04-9/05=100)
HK: Retail Sales Vol Index: All Retail Outlets (10/04-9/05=100)
-
200
400
600
800
1,000
1,200
1,400
1Q841Q861Q881Q901Q921Q941Q961Q981Q001Q021Q041Q061Q081Q101Q121Q14
Central office capital value index Central office rental index
Source: Census and Statistics Department, Deutsche Bank
Source: JLL, Deutsche Bank
Figure 61: JLL office rental index Figure 62: JLL office capital value index
0
100
200
300
400
500
600
3Q
88
3Q
89
3Q
90
3Q
91
3Q
92
3Q
93
3Q
94
3Q
95
3Q
96
3Q
97
3Q
98
3Q
99
3Q
00
3Q
01
3Q
02
3Q
03
3Q
04
3Q
05
3Q
06
3Q
07
3Q
08
3Q
09
3Q
10
3Q
11
3Q
12
3Q
13
3Q
14
3Q
15
JLL Office Rental Index
Overall Central Wanchai/Causeway Bay Tsim Sha Tsui HK East
-
200
400
600
800
1,000
1,200
3Q
88
3Q
89
3Q
90
3Q
91
3Q
92
3Q
93
3Q
94
3Q
95
3Q
96
3Q
97
3Q
98
3Q
99
3Q
00
3Q
01
3Q
02
3Q
03
3Q
04
3Q
05
3Q
06
3Q
07
3Q
08
3Q
09
3Q
10
3Q
11
3Q
12
3Q
13
3Q
14
3Q
15
JLL Office Capital Value Index
Overall Central Wanchai/Causeway Bay Tsim Sha Tsui HK East
Source: JLL, Deutsche Bank
Source: JLL, Deutsche Bank
Figure 63: JLL retail rental index Figure 64: JLL retail capital value index
50
100
150
200
250
300
350
1Q
01
3Q
01
1Q
02
3Q
02
1Q
03
3Q
03
1Q
04
3Q
04
1Q
05
3Q
05
1Q
06
3Q
06
1Q
07
3Q
07
1Q
08
3Q
08
1Q
09
3Q
09
1Q
10
3Q
10
1Q
11
3Q
11
1Q
12
3Q
12
1Q
13
3Q
13
1Q
14
3Q
14
1Q
15
3Q
15
JLL Retail Rental Index
High Street Shops Prime Area Retail Centers
50
150
250
350
450
550
650
1Q
01
3Q
01
1Q
02
3Q
02
1Q
03
3Q
03
1Q
04
3Q
04
1Q
05
3Q
05
1Q
06
3Q
06
1Q
07
3Q
07
1Q
08
3Q
08
1Q
09
3Q
09
1Q
10
3Q
10
1Q
11
3Q
11
1Q
12
3Q
12
1Q
13
3Q
13
1Q
14
3Q
14
1Q
15
3Q
15
JLL Retail Capital Value Index
High Street Shops Prime Area Retail Centers Source: JLL, Deutsche Bank
Source: JLL, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Deutsche Bank AG/Hong Kong Page 21
Figure 65: Future Grade-A office supply by district
Project Developer District HK Island KLN / NT Total
2016
NKIL 6314 J/O Kai Cheung Road and Wang Kwong Road, Kowloon bay
Goldin Financial Kowloon Bay 681,890
KIL 11111 J/O Hung Luen Road and Kin Wan Street, Hung Hom Wheelock Hung Hom 474,240
STTL463 Junction of On Yiu Street and On Kwan Street, Shek Mun
Billion Development Shatin 344,319
New supply in 2016 1,500,450
2017
14-30 King Wah Road Henderson North Point 275,809
New World Centre Redevelopment NWD Tsim Sha Tsui 260,000
Junction of Hang Yip Street, Wai Yip Street, Yan Yip Street and Kwun Tong Road
Mapletree Kwun Tong 528,241
Junction of Wang Chiu Road and Lam Lee Road Swire Properties Kowloon Bay 555,000
NKIL 6311 J/O Sheung Yuet Road, Wang Tai Road and Wang Yuen Street
HK Pacific Investments Kowloon Bay 266,499
2 Ng Fong Street, San Po Kong Billion Development San Po Kong 314,214
Hong Kong Science Park, Phase 3 (Bldg 20E & 22E), Pak Shek Kok
HKSAR Tai Po 200,000
New supply in 2017 2,399,763
2018
1 Hennessy Road, Wanchai Chinachem Wanchai 251,999
Sunning Plaza and Sunning Court Redevelopment Hysan Causeway Bay 300,000
Taikoo Place Phase 2A (ex-Somerset House) Swire Properties Quarry Bay 716,002
180 Wai Yip Street, Kwun Tong SHKP /Wong’s Kwun Tong 383,364
650 Cheung Sha Wan Road First Group Cheung Sha Wan 154,827
33 Tseuk Luk Street, San Po Kong SHKP San Po Kong 245,748
New supply in 2018 2,051,940
2019
704-730 King's Road & 201-227 Tsat Tsz Mui Road NWD Quarry Bay 389,989
Junction of Hung Yip Street, Wai Yip Street, Shun Yip Street Nan Fung / Link REIT Kwun Tong 883,888
123 Hoi Bun Road Wheelock Kwun Tong 476,972
8-10 Wong Chuk Hang Road Swire Properties Aberdeen / Wong Chuk Hang
308,000
New supply in 2019 2,058,849
Source: Savills, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Page 22 Deutsche Bank AG/Hong Kong
HK macro update
Figure 66: Hong Kong interbank rate – 3 month Figure 67: HK-US prime spread
0
2
4
6
8
10
12
14
16
18%
(1.50)
(1.00)
(0.50)
-
0.50
1.00
1.50
2.00
2.50 % HK-US Prime Spread
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
Figure 68: Real prime rate Figure 69: HK unemployment rate (%)
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
%Real Prime Rate
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
Ja
n-8
2
Ja
n-8
4
Ja
n-8
6
Ja
n-8
8
Ja
n-9
0
Ja
n-9
2
Ja
n-9
4
Ja
n-9
6
Ja
n-9
8
Ja
n-0
0
Ja
n-0
2
Jan-0
4
Ja
n-0
6
Jan-0
8
Ja
n-1
0
Ja
n-1
2
Ja
n-1
4
Source: Bloomberg Finance LP, Deutsche Bank
Source: Census and Statistics Department, Deutsche Bank
Figure 70: Median monthly household income –
including bonus (HK$)
Figure 71: Median monthly household income –
excluding bonus (HK$)
11,000
13,000
15,000
17,000
19,000
21,000
23,000
25,000
27,000
1Q
93
1Q
94
1Q
95
1Q
96
1Q
97
1Q
98
1Q
99
1Q
00
1Q
01
1Q
02
1Q
03
1Q
04
1Q
05
1Q
06
1Q
07
1Q
08
1Q
09
1Q
10
1Q
11
1Q
12
1Q
13
1Q
14
1Q
15
12,000
14,000
16,000
18,000
20,000
22,000
24,000
26,000
1Q
93
1Q
94
1Q
95
1Q
96
1Q
97
1Q
98
1Q
99
1Q
00
1Q
01
1Q
02
1Q
03
1Q
04
1Q
05
1Q
06
1Q
07
1Q
08
1Q
09
1Q
10
1Q
11
1Q
12
1Q
13
1Q
14
1Q
15
Source: Census and Statistics Department, Deutsche Bank
Source: Census and Statistics Department, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Deutsche Bank AG/Hong Kong Page 23
Figure 72: HK Nominal Wage Index (Sep 1992=100) Figure 73: HK real GDP (YoY growth)
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
-
50
100
150
200
250
Jun-8
3
Jun-8
5
Jun-8
7
Jun-8
9
Jun-9
1
Jun-9
3
Jun-9
5
Jun-9
7
Jun-9
9
Jun-0
1
Jun-0
3
Jun-0
5
Jun-0
7
Jun-0
9
Jun-1
1
Jun-1
3
Jun-1
5
HK Nominal Wage Index (Sep 1992=100) YoY Chg
-10%
-5%
0%
5%
10%
15%
2Q
96
2Q
97
2Q
98
2Q
99
2Q
00
2Q
01
2Q
02
2Q
03
2Q
04
2Q
05
2Q
06
2Q
07
2Q
08
2Q
09
2Q
10
2Q
11
2Q
12
2Q
13
2Q
14
2Q
15
HK Real GDP (YoY Growth)
Source: CEIC, Deutsche Bank
Source: Census and Statistics Department, Deutsche Bank
Figure 74: HK real GDP (seasonally adj. QoQ growth) Figure 75: Average price to income ratio of HK
-4%
-2%
0%
2%
4%
6%
8%
1Q
93
1Q
94
1Q
95
1Q
96
1Q
97
1Q
98
1Q
99
1Q
00
1Q
01
1Q
02
1Q
03
1Q
04
1Q
05
1Q
06
1Q
07
1Q
08
1Q
09
1Q
10
1Q
11
1Q
12
1Q
13
1Q
14
1Q
15
4
6
8
10
12
14
16
18
Mar-
85
Mar-
87
Mar-
89
Mar-
91
Mar-
93
Mar-
95
Mar-
97
Mar-
99
Mar-
01
Mar-
03
Mar-
05
Mar-
07
Mar-
09
Mar-
11
Mar-
13
Mar-
15
Price-to-Income ratio 10-year average -1SD +1SD
Years
Less Affordable
More Affordable
Source: Census and Statistics Department, Deutsche Bank
Source: RV&D, CEIC, Bloomberg Finance LP, Deutsche Bank
Figure 76: Average affordability ratio of HK Figure 77: Affordability – unadjusted
0
20
40
60
80
100
120
140
Ma
r-85
Ma
r-87
Ma
r-89
Ma
r-91
Ma
r-93
Ma
r-95
Ma
r-97
Ma
r-99
Ma
r-01
Ma
r-03
Ma
r-05
Ma
r-07
Ma
r-09
Ma
r-11
Ma
r-13
Ma
r-15
%
Less Affordable
More Affordable
Average (Ex 93-97)
Average (1985-Now)
0
20
40
60
80
100
120
140
Mar-
85
Mar-
87
Mar-
89
Mar-
91
Mar-
93
Mar-
95
Mar-
97
Mar-
99
Mar-
01
Mar-
03
Mar-
05
Mar-
07
Mar-
09
Mar-
11
Mar-
13
Mar-
15
Affordability ratio (unadjusted) Average -1SD +1SD
%
Source: RV&D, CEIC, Bloomberg Finance LP, Deutsche Bank
Source: RV&D, Bloomberg Finance LP, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Page 24 Deutsche Bank AG/Hong Kong
Figure 78: Affordability – 40-69.9sqm flat Figure 79: Affordability – all households
0
20
40
60
80
100
120
140
Mar-
85
Mar-
87
Mar-
89
Mar-
91
Mar-
93
Mar-
95
Mar-
97
Mar-
99
Mar-
01
Mar-
03
Mar-
05
Mar-
07
Mar-
09
Mar-
11
Mar-
13
Mar-
15
%
Less Affordable
More Affordable
Banks' Threshold (50% of Monthly Income)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%All Household affordability (Monthly Instalment/Median Household Income)
Affordability Ratio - P base Affordability Ratio - H base
Le
ss
A
ffo
rda
ble
Mo
re
Aff
ord
ab
le
Source: RV&D, Deutsche Bank
Source: RV&D, Deutsche Bank
Figure 80: Affordability – private households Figure 81: Property transaction vs. stock & HK GDP
0%
20%
40%
60%
80%
100%
120%
Private Household affordability (Monthly Instalment/Median Household Income)
Affordability Ratio - P base Affordability Ratio - H base
Less
Aff
ord
ab
leM
ore
A
ffo
rdab
le
0%
5%
10%
15%
20%
25%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
10M
15
Property transaction vs stock (RHS) Private property stock / HK GDP (LHS)
Source: RV&D, Deutsche Bank
Source: RV&D, Deutsche Bank
Figure 82: Number of domestic households by monthly household income and type of housing in 3Q 2015
Monthly household income Type of housing
(HK$) Public rental housing
Subsidized sale flats Private permanent housing
Temporary housing Total
('000) ('000) ('000) ('000) ('000)
< 4,000 18.8 19.2 75.2 1.4 114.6
4,000 - 5,999 74.6 11.0 28.2 0.7 114.5
6,000 - 7,999 60.4 9.6 33.4 # 103.8
8,000 - 9,999 50.7 9.3 36.8 # 97.3
10,000 - 14,999 145.7 35.8 93.0 2.8 277.3
15,000 - 19,999 119.7 40.6 104.1 1.0 265.5
20,000 - 24,999 96.2 40.4 103.5 1.1 241.3
25,000 - 29,999 70.3 39.7 85.8 0.6 196.4
30,000 - 39,999 80.1 69.7 179.3 1.4 330.5
40,000 and over 57.5 105.7 580 0.9 744
Total 774 380.9 1319.3 10.9 2485.2 Source: Census and Statistics Department, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Deutsche Bank AG/Hong Kong Page 25
Taking a look at valuations
Figure 83: Developer discount to NAV Figure 84: Landlord discount to NAV
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
Jan
-92
Dec
-93
Dec
-95
Dec
-97
Dec
-99
Dec
-01
Dec
-03
Dec
-05
Dec
-07
Dec
-09
Dec
-11
Dec
-13
Dec
-15
Developer Disc to NAV -1SD Avg +1SD
-80%
-60%
-40%
-20%
0%
20%
40%
Jan
-92
Dec
-93
Dec
-95
Dec
-97
Dec
-99
Dec
-01
Dec
-03
Dec
-05
Dec
-07
Dec
-09
Dec
-11
Dec
-13
Dec
-15
Landlord Disc to NAV -1SD Avg +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
Figure 85: Developer P/E Figure 86: Landlord P/E
0
5
10
15
20
25
30
35
Jan
-92
Dec
-93
Dec
-95
Dec
-97
Dec
-99
Dec
-01
Dec
-03
Dec
-05
Dec
-07
Dec
-09
Dec
-11
Dec
-13
Dec
-15
Developer P/E -1SD Avg +1SD
0
5
10
15
20
25
30
35
40
45
50
Jan
-92
Dec
-93
Dec
-95
Dec
-97
Dec
-99
Dec
-01
Dec
-03
Dec
-05
Dec
-07
Dec
-09
Dec
-11
Dec
-13
Dec
-15
Landlord P/E -1SD Avg +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
Figure 87: Developer P/B Figure 88: Landlord P/B
0.0
0.5
1.0
1.5
2.0
2.5
Jan
-92
Dec
-93
Dec
-95
Dec
-97
Dec
-99
Dec
-01
Dec
-03
Dec
-05
Dec
-07
Dec
-09
Dec
-11
Dec
-13
Dec
-15
Developer P/B -1SD Avg +1SD
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
Jan
-92
Dec
-93
Dec
-95
Dec
-97
Dec
-99
Dec
-01
Dec
-03
Dec
-05
Dec
-07
Dec
-09
Dec
-11
Dec
-13
Dec
-15
Landlord P/B -1SD Avg +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Page 26 Deutsche Bank AG/Hong Kong
Figure 89: SHKP – discount to NAV Figure 90: Sino Land – discount to NAV
-80%
-60%
-40%
-20%
0%
20%
40%
Jan
-92
Ap
r-9
3
Jul-
94
Oct
-95
Jan
-97
Ap
r-9
8
Jul-
99
Oct
-00
Jan
-02
Ap
r-0
3
Jul-
04
Oct
-05
Jan
-07
Ap
r-0
8
Jul-
09
Oct
-10
Jan
-12
Ap
r-1
3
Jul-
14
Oct
-15
Discount to NAV -1SD Average +1SD
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
Jan
-92
Jun
-93
Dec
-94
Jun
-96
Dec
-97
Jun
-99
No
v-0
0
May
-02
No
v-0
3
May
-05
No
v-0
6
Ap
r-0
8
Oct
-09
Ap
r-1
1
Oct
-12
Ap
r-1
4
Oct
-15
Discount to NAV -1SD Average +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
Figure 91: Henderson – discount to NAV Figure 92: New World Development – discount to NAV
-80%
-60%
-40%
-20%
0%
20%
40%
60%
Jan
-92
Au
g-9
3
Mar
-95
Oct
-96
May
-98
Dec
-99
Jul-
01
Feb
-03
Sep
-04
Ap
r-0
6
No
v-0
7
Jun
-09
Jan
-11
Au
g-1
2
Mar
-14
Oct
-15
Discount to NAV -1SD Average +1SD
-90%
-80%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
Jul-
03
Ap
r-0
4
Jan
-05
Oct
-05
Au
g-0
6
May
-07
Feb
-08
No
v-0
8
Au
g-0
9
Jun
-10
Mar
-11
Dec
-11
Sep
-12
Jul-
13
Ap
r-1
4
Jan
-15
Oct
-15
Discount to NAV -1SD Average +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
Figure 93: Hang Lung – discount to NAV Figure 94: CK Property – discount to NAV
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
Jan
-92
Au
g-9
3
Mar
-95
Oct
-96
May
-98
Dec
-99
Jul-
01
Feb
-03
Sep
-04
Ap
r-0
6
No
v-0
7
Jun
-09
Jan
-11
Au
g-1
2
Mar
-14
Oct
-15
Discount to NAV -1SD Average +1SD
-55%
-50%
-45%
-40%
-35%
-30%
-25%
Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15
Discount to NAV -1SD Average +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Deutsche Bank AG/Hong Kong Page 27
Figure 95: Kerry – discount to NAV Figure 96: HK Land – discount to NAV
-100%
-50%
0%
50%
100%
150%
200%
250%
Au
g-9
6
Jun
-97
Ap
r-9
8
Feb
-99
Dec
-99
Oct
-00
Au
g-0
1
Jun
-02
Ap
r-0
3
Feb
-04
Dec
-04
Oct
-05
Au
g-0
6
Jun
-07
Ap
r-0
8
Feb
-09
Dec
-09
Oct
-10
Au
g-1
1
Jun
-12
Ap
r-1
3
Feb
-14
Dec
-14
Oct
-15
Discount to NAV -1SD Average +1SD
-80%
-60%
-40%
-20%
0%
20%
40%
Jan
-92
Ap
r-9
3
Jul-
94
Oct
-95
Jan
-97
Ap
r-9
8
Jul-
99
Oct
-00
Jan
-02
Ap
r-0
3
Jul-
04
Oct
-05
Jan
-07
Ap
r-0
8
Jul-
09
Oct
-10
Jan
-12
Ap
r-1
3
Jul-
14
Oct
-15
Discount to NAV -1SD Average +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
Figure 97: Wharf – discount to NAV Figure 98: Great Eagle – discount to NAV
-90%
-80%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
Jan
-96
Feb
-97
Mar
-98
Ap
r-9
9
May
-00
Jun
-01
Au
g-0
2
Sep
-03
Oct
-04
No
v-0
5
Dec
-06
Jan
-08
Mar
-09
Ap
r-1
0
May
-11
Jun
-12
Jul-
13
Au
g-1
4
Oct
-15
Discount to NAV -1SD Average +1SD
-90%
-80%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
Oct
-05
Jul-
06
Ap
r-0
7
Dec
-07
Sep
-08
May
-09
Feb
-10
Oct
-10
Jul-
11
Mar
-12
Dec
-12
Au
g-1
3
May
-14
Jan
-15
Oct
-15
Discount to NAV -1SD Average +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
Figure 99: Hysan – discount to NAV Figure 100: Link REIT – discount to NAV
-80%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
Jan
-92
Mar
-93
May
-94
Jul-
95
Oct
-96
Dec
-97
Feb
-99
May
-00
Jul-
01
Sep
-02
Dec
-03
Feb
-05
Ap
r-0
6
Jun
-07
Sep
-08
No
v-0
9
Jan
-11
Ap
r-1
2
Jun
-13
Au
g-1
4
Oct
-15
Discount to NAV -1SD Average +1SD
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
Sep
-11
Dec
-11
Mar
-12
Jun
-12
Sep
-12
Dec
-12
Ap
r-1
3
Jul-
13
Oct
-13
Jan
-14
Ap
r-1
4
Jul-
14
Oct
-14
Jan
-15
Ap
r-1
5
Jul-
15
Oct
-15
Discount to NAV -1SD Average +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Page 28 Deutsche Bank AG/Hong Kong
Figure 101: SHKP – PE Figure 102: Sino Land – PE
0
5
10
15
20
25
30
Jan
-92
Ap
r-9
3
Jul-
94
Oct
-95
Jan
-97
Ap
r-9
8
Jul-
99
Oct
-00
Jan
-02
Ap
r-0
3
Jul-
04
Oct
-05
Jan
-07
Ap
r-0
8
Jul-
09
Oct
-10
Jan
-12
Ap
r-1
3
Jul-
14
Oct
-15
PE -1SD Average +1SD
0
5
10
15
20
25
30
Jun
-95
No
v-9
6
Mar
-98
Jul-
99
No
v-0
0
Ap
r-0
2
Au
g-0
3
Dec
-04
May
-06
Sep
-07
Jan
-09
May
-10
Oct
-11
Feb
-13
Jun
-14
Oct
-15
PE -1SD Average +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
Figure 103: Henderson – PE Figure 104: New World Development – PE
0
10
20
30
40
50
60
70
80
Dec
-93
Jul-
95
Feb
-97
Sep
-98
Mar
-00
Oct
-01
May
-03
No
v-0
4
Jun
-06
Jan
-08
Jul-
09
Feb
-11
Sep
-12
Ap
r-1
4
Oct
-15
PE -1SD Average +1SD
0
5
10
15
20
25
30
35
40
45
50
Jul-
03
Ap
r-0
4
Jan
-05
Oct
-05
Au
g-0
6
May
-07
Feb
-08
No
v-0
8
Au
g-0
9
Jun
-10
Mar
-11
Dec
-11
Sep
-12
Jul-
13
Ap
r-1
4
Jan
-15
Oct
-15
PE -1SD Average +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
Figure 105: Hang Lung – PE Figure 106: CK Property – PE
0
10
20
30
40
50
60
Jan
-92
Au
g-9
3
Mar
-95
Oct
-96
May
-98
Dec
-99
Jul-
01
Feb
-03
Sep
-04
Ap
r-0
6
No
v-0
7
Jun
-09
Jan
-11
Au
g-1
2
Mar
-14
Oct
-15
PE -1SD Average +1SD
12
13
14
15
16
17
18
19
Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15
PE -1SD Average +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Deutsche Bank AG/Hong Kong Page 29
Figure 107: Kerry – PE Figure 108: HK Land – PE
0
5
10
15
20
25
30
35
40
45
Au
g-9
6
Jun
-97
Ap
r-9
8
Feb
-99
Dec
-99
Oct
-00
Au
g-0
1
Jun
-02
Ap
r-0
3
Feb
-04
Dec
-04
Oct
-05
Au
g-0
6
Jun
-07
Ap
r-0
8
Feb
-09
Dec
-09
Oct
-10
Au
g-1
1
Jun
-12
Ap
r-1
3
Feb
-14
Dec
-14
Oct
-15
PE -1SD Average +1SD
0
10
20
30
40
50
60
Jan
-92
Ap
r-9
3
Jul-
94
Oct
-95
Jan
-97
Ap
r-9
8
Jul-
99
Oct
-00
Jan
-02
Ap
r-0
3
Jul-
04
Oct
-05
Jan
-07
Ap
r-0
8
Jul-
09
Oct
-10
Jan
-12
Ap
r-1
3
Jul-
14
Oct
-15
PE -1SD Average +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
Figure 109: Wharf – PE Figure 110: Great Eagle – PE
0
5
10
15
20
25
30
35
40
45
Jan
-96
Feb
-97
Mar
-98
Ap
r-9
9
May
-00
Jul-
01
Au
g-0
2
Sep
-03
Oct
-04
No
v-0
5
Dec
-06
Feb
-08
Mar
-09
Ap
r-1
0
May
-11
Jun
-12
Jul-
13
Sep
-14
Oct
-15
PE -1SD Average +1SD
-20
0
20
40
60
80
100
Jan
-96
Mar
-97
May
-98
Jul-
99
Au
g-0
0
Oct
-01
Dec
-02
Feb
-04
Ap
r-0
5
Jun
-06
Au
g-0
7
Oct
-08
Dec
-09
Feb
-11
Ap
r-1
2
Jun
-13
Au
g-1
4
Oct
-15
PE -1SD Average +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
Figure 111: Hysan – PE Figure 112: Link REIT – PE
0
5
10
15
20
25
30
35
40
Jan
-92
Mar
-93
May
-94
Jul-
95
Oct
-96
Dec
-97
Feb
-99
May
-00
Jul-
01
Sep
-02
Dec
-03
Feb
-05
Ap
r-0
6
Jun
-07
Sep
-08
No
v-0
9
Jan
-11
Ap
r-1
2
Jun
-13
Au
g-1
4
Oct
-15
PE -1SD Average +1SD
17
19
21
23
25
27
29
31
Sep
-11
Dec
-11
Mar
-12
Jun
-12
Sep
-12
Dec
-12
Ap
r-1
3
Jul-
13
Oct
-13
Jan
-14
Ap
r-1
4
Jul-
14
Oct
-14
Jan
-15
Ap
r-1
5
Jul-
15
Oct
-15
PE -1SD Average +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Page 30 Deutsche Bank AG/Hong Kong
Figure 113: SHKP – PB Figure 114: Sino Land – PB
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
Jan
-92
Ap
r-9
3
Jul-
94
Oct
-95
Jan
-97
Ap
r-9
8
Jul-
99
Oct
-00
Jan
-02
Ap
r-0
3
Jul-
04
Oct
-05
Jan
-07
Ap
r-0
8
Jul-
09
Oct
-10
Jan
-12
Ap
r-1
3
Jul-
14
Oct
-15
PB -1SD Average +1SD
0.0
0.5
1.0
1.5
2.0
2.5
Jun
-95
No
v-9
6
Mar
-98
Jul-
99
No
v-0
0
Ap
r-0
2
Au
g-0
3
Dec
-04
May
-06
Sep
-07
Jan
-09
May
-10
Oct
-11
Feb
-13
Jun
-14
Oct
-15
PB -1SD Average +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
Figure 115: Henderson – PB Figure 116: New World Development – PB
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Dec
-93
Jul-
95
Feb
-97
Sep
-98
Mar
-00
Oct
-01
May
-03
No
v-0
4
Jun
-06
Jan
-08
Jul-
09
Feb
-11
Sep
-12
Ap
r-1
4
Oct
-15
PB -1SD Average +1SD
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
Jul-
03
Ap
r-0
4
Jan
-05
Oct
-05
Au
g-0
6
May
-07
Feb
-08
No
v-0
8
Au
g-0
9
Jun
-10
Mar
-11
Dec
-11
Sep
-12
Jul-
13
Ap
r-1
4
Jan
-15
Oct
-15
PB -1SD Average +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
Figure 117: Hang Lung – PB Figure 118: CK Property – PB
0.0
0.5
1.0
1.5
2.0
2.5
Jan
-92
Au
g-9
3
Mar
-95
Oct
-96
May
-98
Dec
-99
Jul-
01
Feb
-03
Sep
-04
Ap
r-0
6
No
v-0
7
Jun
-09
Jan
-11
Au
g-1
2
Mar
-14
Oct
-15
PB -1SD Average +1SD
0.80
0.85
0.90
0.95
1.00
1.05
1.10
1.15
1.20
1.25
Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15
PB -1SD Average +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Deutsche Bank AG/Hong Kong Page 31
Figure 119: Kerry –PB Figure 120: HK Land – PB
0.0
0.5
1.0
1.5
2.0
2.5
Au
g-9
6
Jun
-97
Ap
r-9
8
Feb
-99
Dec
-99
Oct
-00
Au
g-0
1
Jun
-02
Ap
r-0
3
Feb
-04
Dec
-04
Oct
-05
Au
g-0
6
Jun
-07
Ap
r-0
8
Feb
-09
Dec
-09
Oct
-10
Au
g-1
1
Jun
-12
Ap
r-1
3
Feb
-14
Dec
-14
Oct
-15
PB -1SD Average +1SD
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
Jan
-92
Ap
r-9
3
Jul-
94
Oct
-95
Jan
-97
Ap
r-9
8
Jul-
99
Oct
-00
Jan
-02
Ap
r-0
3
Jul-
04
Oct
-05
Jan
-07
Ap
r-0
8
Jul-
09
Oct
-10
Jan
-12
Ap
r-1
3
Jul-
14
Oct
-15
PB -1SD Average +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
Figure 121: Wharf – PB Figure 122: Great Eagle – PB
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
Jan
-96
Feb
-97
Mar
-98
Ap
r-9
9
May
-00
Jul-
01
Au
g-0
2
Sep
-03
Oct
-04
No
v-0
5
Dec
-06
Feb
-08
Mar
-09
Ap
r-1
0
May
-11
Jun
-12
Jul-
13
Sep
-14
Oct
-15
PB -1SD Average +1SD
0.0
0.2
0.4
0.6
0.8
1.0
1.2
Jan
-96
Mar
-97
May
-98
Jul-
99
Au
g-0
0
Oct
-01
Dec
-02
Feb
-04
Ap
r-0
5
Jun
-06
Au
g-0
7
Oct
-08
Dec
-09
Feb
-11
Ap
r-1
2
Jun
-13
Au
g-1
4
Oct
-15
PB -1SD Average +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
Figure 123: Hysan – PB Figure 124: Link REIT – PB
0.0
0.2
0.4
0.6
0.8
1.0
1.2
Jan
-92
Mar
-93
May
-94
Jul-
95
Oct
-96
Dec
-97
Feb
-99
May
-00
Jul-
01
Sep
-02
Dec
-03
Feb
-05
Ap
r-0
6
Jun
-07
Sep
-08
No
v-0
9
Jan
-11
Ap
r-1
2
Jun
-13
Au
g-1
4
Oct
-15
PB -1SD Average +1SD
0.6
0.8
1.0
1.2
1.4
1.6
1.8
Dec
-05
Jun
-06
Jan
-07
Jul-
07
Feb
-08
Au
g-0
8
Mar
-09
Oct
-09
Ap
r-1
0
No
v-1
0
May
-11
Dec
-11
Jun
-12
Jan
-13
Au
g-1
3
Feb
-14
Sep
-14
Mar
-15
Oct
-15
PB -1SD Average +1SD
Source: Bloomberg Finance LP, Deutsche Bank
Source: Bloomberg Finance LP, Deutsche Bank
7 December 2015
Property
HK Property Monthly
Page 32 Deutsche Bank AG/Hong Kong
Appendix 1
Important Disclosures
Additional information available upon request *Prices are current as of the end of the previous trading session unless otherwise indicated and are sourced from local exchanges via Reuters, Bloomberg and other vendors . Other information is sourced from Deutsche Bank, subject companies, and other sources. For disclosures pertaining to recommendations or estimates made on securities other than the primary subject of this research, please see the most recently published company report or visit our global disclosure look-up page on our website at http://gm.db.com/ger/disclosure/DisclosureDirectory.eqsr
Analyst Certification
The views expressed in this report accurately reflect the personal views of the undersigned lead analyst about the subject issuers and the securities of those issuers. In addition, the undersigned lead analyst has not and will not receive any compensation for providing a specific recommendation or view in this report. Tony Tsang/Jason Ching
Equity rating key Equity rating dispersion and banking relationships
Buy: Based on a current 12- month view of total share-holder return (TSR = percentage change in share price from current price to projected target price plus pro-jected dividend yield ) , we recommend that investors buy the stock. Sell: Based on a current 12-month view of total share-holder return, we recommend that investors sell the stock Hold: We take a neutral view on the stock 12-months out and, based on this time horizon, do not recommend either a Buy or Sell. Notes:
1. Newly issued research recommendations and target prices always supersede previously published research. 2. Ratings definitions prior to 27 January, 2007 were:
Buy: Expected total return (including dividends) of 10% or more over a 12-month period Hold: Expected total return (including dividends) between -10% and 10% over a 12-month period Sell: Expected total return (including dividends) of -10% or worse over a 12-month period
52 %
37 %
11 %18 %11 % 14 %
050
100150200250300350400450500
Buy Hold Sell
Asia-Pacific Universe
Companies Covered Cos. w/ Banking Relationship
7 December 2015
Property
HK Property Monthly
Deutsche Bank AG/Hong Kong Page 33
Regulatory Disclosures
1.Important Additional Conflict Disclosures
Aside from within this report, important conflict disclosures can also be found at https://gm.db.com/equities under the
"Disclosures Lookup" and "Legal" tabs. Investors are strongly encouraged to review this information before investing.
2.Short-Term Trade Ideas
Deutsche Bank equity research analysts sometimes have shorter-term trade ideas (known as SOLAR ideas) that are
consistent or inconsistent with Deutsche Bank's existing longer term ratings. These trade ideas can be found at the
SOLAR link at http://gm.db.com.
7 December 2015
Property
HK Property Monthly
Page 34 Deutsche Bank AG/Hong Kong
Additional Information
The information and opinions in this report were prepared by Deutsche Bank AG or one of its affiliates (collectively
"Deutsche Bank"). Though the information herein is believed to be reliable and has been obtained from public sources
believed to be reliable, Deutsche Bank makes no representation as to its accuracy or completeness.
Deutsche Bank may consider this report in deciding to trade as principal. It may also engage in transactions, for its own
account or with customers, in a manner inconsistent with the views taken in this research report. Others within
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7 December 2015
Property
HK Property Monthly
Deutsche Bank AG/Hong Kong Page 35
to or inspired by the contents of this publication. The risk of loss in futures trading and options, foreign or domestic, can
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7 December 2015
Property
HK Property Monthly
Page 36 Deutsche Bank AG/Hong Kong
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David Folkerts-Landau Chief Economist and Global Head of Research
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