Asia Property Weekly Summary
Core Content Overview
This document provides a comprehensive overview of the Asia property market, highlighting key performance metrics, market updates, and upcoming events across China, Hong Kong, Japan, and Singapore. It also includes a snapshot of residential and commercial property trends, as well as valuation comparisons and performance data for various sub-sectors.
Key News and Updates
China Property Market
- Transaction Volume: Increased by 5% week-on-week and 68% year-on-year, with Tier 2 cities outperforming.
- Inventory Months: Fell to 9.0 months.
- Land Transactions: Volume and value dropped by -23%/-50% week-on-week.
- New Home Prices: Rose in 62 cities in March, up from 15 cities in February, with prices falling in the remaining eight.
- Property Loans: Grew by 22.2% year-on-year to Rmb22.51tn by the end of March.
- Land Costs: Increased again in 1Q16, with top-tier cities seeing the largest rise.
Hong Kong Property Market
- Residential Sales: Estimated 286 new homes sold in the week ending April 24, up 7% from the prior week.
- Secondary Market Prices: Declined by 0.3% week-on-week as of April 17.
- YTD Prices: Down 5.8%.
- Average Rent: Declined by 0.3% month-on-month and 5% year-to-date to HK$30.30psf in March.
- Unemployment Rate: Rose to 3.4% for the three months ending March, the highest since May 2013.
- Underlying Inflation Rate: Increased to +2.9% year-on-year in March, down from +3.1% in February.
Japan Property Market
- Vacancy Rate: Increased to 8.3% in the Greater Tokyo area logistics sector, the highest since 2010 due to large supply.
- New JREIT: Star Asia Investment was listed as a new JREIT with an opening price below the offering price.
- Logistics Development: Mitsubishi Estate started construction on a new logistics center in Atsugi, expected to be completed by end of March 2017.
Singapore Property Market
- Office Rents Index: Fell by 2.1% quarter-on-quarter and 9.0% year-on-year in 1Q16.
- Vacancy Rate: Dropped to 9.2% as of end-1Q16, down from 9.5% in 4Q15.
- CapitaLand: Reported a headline net profit of S$218.3mn in 1Q16, up 35% year-on-year, primarily due to a fair value gain from the sale of a property in China.
Upcoming Events
| Date |
Market |
Events |
| 25-Apr |
Singapore |
CPI |
| 26-Apr |
Singapore |
IP |
| 26-Apr |
Hong Kong |
Trade balance, exports, imports |
| 27-Apr |
Singapore |
MGCCT 4Q FY15/16 full-year results |
| 28-Apr |
Singapore |
Unemployment rate |
| 28-Apr |
Japan |
Jobless rate, CPI, IP, Housing starts, BOJ Money Policy Statement |
| 1-May |
China |
Manufacturing and Non-manufacturing PMI |
| 2-May |
Japan |
Nikkei Japan PMI Mfg |
| 2-May |
India |
Nikkei India PMI Mfg |
Residential Market Snapshot
Price Performance
| Market |
Price Index (Jan-06=100) |
vs end-12 |
Last Update |
15Q2 |
15Q3 |
15Q4 |
Dec |
Jan |
Feb |
Apr-10 |
Apr-17 |
Apr-24 |
| Greater China |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
| Hong Kong |
244 |
11% |
17-Apr-16 |
+13% |
+3% |
-6% |
-3% |
-3% |
-0% |
+0% |
-100% |
n.a. |
| Beijing |
461 |
53% |
24-Apr-16 |
-0% |
+12% |
-4% |
-1% |
-3% |
+12% |
+12% |
-4% |
n.a. |
| Shanghai |
198 |
11% |
24-Apr-16 |
+25% |
-6% |
+14% |
+5% |
-20% |
+14% |
n.a. |
n.a. |
n.a. |
| Guangzhou |
87 |
27% |
24-Apr-16 |
-4% |
-8% |
+11% |
+9% |
-2% |
n.a. |
n.a. |
n.a. |
n.a. |
| Shenzhen |
456 |
163% |
24-Apr-16 |
+31% |
+32% |
-0% |
-5% |
-8% |
+17% |
-7% |
+1% |
+10% |
Transaction Volume
| Market |
Volume (Units/Month) |
1-Month Change |
1-Week Change |
| Greater China |
- |
- |
- |
| Hong Kong |
286 units/wk |
+26% |
-91% |
| Beijing |
190 ksgm/wk |
+64% |
-52% |
| Shanghai |
499 ksgm/wk |
+13% |
-8% |
| Guangzhou |
278 ksgm/wk |
+18% |
-1% |
| Shenzhen |
58 ksgm/wk |
+24% |
-25% |
Residential Rents
| Market |
Rental Index (Jan-06=100) |
vs end-12 |
Last Update |
15Q2 |
15Q3 |
15Q4 |
Rental Yield |
Mortgage Rate |
Cost of Carry |
| Greater China |
- |
- |
- |
- |
- |
- |
- |
- |
- |
| Hong Kong |
247 |
35% |
31-Jan-16 |
+3% |
+0% |
+0% |
2.65% |
5.00% |
-2.35% |
| Beijing |
162 |
12% |
30-Nov-15 |
+4% |
+1% |
+0% |
2.13% |
5.65% |
-3.52% |
| Shanghai |
209 |
47% |
30-Nov-15 |
+7% |
+8% |
+3% |
2.09% |
5.15% |
-3.05% |
| Tokyo |
99 |
7% |
31-Dec-15 |
- |
- |
- |
5.23% |
3.51% |
5.20% |
| Singapore |
119 |
-5% |
30-Sep-15 |
-1.1% |
-0.6% |
n.a. |
3.15% |
2.00% |
1.15% |
Commercial Property Market Snapshot
Office Rents Index
- Singapore: Fell by 2.1% quarter-on-quarter and 9.0% year-on-year in 1Q16.
- Vacancy Rate: Dropped to 9.2% as of end-1Q16, down from 9.5% in 4Q15.
Valuation Comparison
| Sub-sector |
1-Week % |
1-Month % |
3-Month % |
6-Month % |
PIE (x) |
Dividend Yield (%) |
% +/- Fwd. NAV |
| China Property (off-shore) |
(0) |
4 |
16 |
0 |
8.2 |
4.7 |
(29) |
| China Property (on-shore) |
(2) |
(4) |
(5) |
(2) |
8.4 |
2.4 |
(36) |
| Hong Kong Properties |
1 |
4 |
20 |
(7) |
13.7 |
3.8 |
(44) |
| Japan Property Developers |
12 |
8 |
13 |
(11) |
23.9 |
0 |
(2) |
| Japan REITs |
5 |
4 |
18 |
19 |
24.5 |
2.8 |
34 |
| ASEAN Property |
1 |
2 |
15 |
(1) |
19.6 |
1.9 |
(37) |
Key Research for the Week
- CapitaLand Commercial Trust (CACT.SI): In line with expectations, stable delivery despite headwinds.
- China: Real Estate Developers: New starts in Tier-2 cities rebounded, aligning with SS/DD divergence.
- CapitaLand (CATL.SI): Home sales beat expectations, but retail headline was soft.
- Global Logistics Properties: Upgraded, with a 7.3% increase in target price.
- Shenzhen Overseas Chinese Town (000069.SZ): Below expectations on margin, but strengthened pipeline indicates potential for growth.
Top and Bottom Performers of the Week
Top Performers
- Sumitomo: 16% (1-wk), 8% (1-mo)
- Tokyo Foshan: 14% (1-wk), 8% (1-mo)
- Tokyo Tatemoto: 13% (1-wk), 13% (1-mo)
- Mitsubishi Estate: 11% (1-wk), 8% (1-mo)
- Summarecon: 11% (1-wk), (4)% (1-mo)
Bottom Performers
- Greentown China: (5)% (1-wk), (18)% (1-mo)
- Evergreenland: (5)% (1-wk), (4)% (1-mo)
- CapitalMall Trust: (4)% (1-wk), (5)% (1-mo)
- Poly Real Estate Group: (4)% (1-wk), (7)% (1-mo)
- Overseas Chinese Town: (4)% (1-wk), (4)% (1-mo)
Largest Upsides/Downsides for Buy/Sell-Rated Stocks
Buy-Rated Stocks (Market Cap > US$2bn)
- Aolie: 69% upside potential
- Sino-Ocean Land: 59% upside potential
- Scriba: 56% upside potential
- Mitsubishi Estate: 55% upside potential
- Shimaq: 53% upside potential
Sell-Rated Stocks (Market Cap > US$2bn)
- Bumi Seroxie: (35)% downside potential
- Everande: (28)% downside potential
- Gremiale Corp: (23)% downside potential
- Champion REIT: (16)% downside potential
- Advance Residence Inc.: (6)% downside potential
Buy-Rated Stocks (Market Cap < US$2bn)
- Yanlord Land: 37% upside potential
- Ciputra Development: (25)% downside potential
- Far East Hospitality Trust: (12)% downside potential
- Mandarin Oriental: (11)% downside potential
- Jinnao Investments: (10)% downside potential
Analysts and Contact Information
- China Property: Yi Wang, CFA (86) 21-2401-8930; Vicky Li (86) 21-2401-8926; Jill Guan (86) 21-2401-8921; Scofield Chi (65) 6654 5188
- Hong Kong Property: Anthony Wu (852) 2978-0634; Justin Kwok, CFA (852) 2978-0481; Claire Cheng (852) 2978-0488; Nelson Wang (65) 6654-5463
- Hong Kong Conglomerates: Simon Cheung, CFA (852) 2978-6102; Janet Lu (852) 2978-1642; Alex Ye (852) 2978-6666
- Japan Property: Sachiko Okada (81) 3-6437-9937; Akira Watanabe (81) 3-6437-9819
- Singapore Property: Paul Lian (65) 6889-2464; Jason Yeo (65) 6889-2485; Ankur Vohra (65) 6654 5185; Jing Ren Tan (65) 6654 5176
Disclosure
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