Asia Property Weekly Summary
Core Content Overview
This document provides a comprehensive summary of the Asia property market, highlighting key trends, news, performance data, and upcoming events. It includes analysis of both residential and commercial property sectors across major markets such as China, Hong Kong, Japan, India, and Singapore.
Key News and Updates
China
- Residential Market: Volume increased by +35% week-on-week and +20% year-on-year, driven by tier-1 cities (+44% wow).
- Inventory: Increased by +0.1% week-on-week for 16 tracked cities.
- Producer Price Index (PPI): Fell -8.9% year-on-year in September, indicating weak aggregate demand.
- Home Mortgages: Reached a 3-year high in Shanghai, with banks lending Rmb21.89 bn in September.
- "Golden Week" Sales: Domestic housing sales totaled 1.59m sqm, +64.8% from the previous year, with significant increases in tier-1 cities.
Hong Kong
- Residential Sales: Estimated 213 units sold in the week ending Oct 18, up +45% from the prior week and -21% below the 3-month average.
- Secondary Market Prices: Down -1.3% week-on-week as of Oct 11, but up +8.5% year-to-date.
- New Development Sales: Sino Land and TST Prop announced the sale of The Coronation in Chongqing to Evergrande for HK$3,500mn.
- Housing Starts: Reached an 8-year high of 12,437 units in 8M 2015, +3.2X from the same period in 2014.
- Office Rents: Remain the most expensive in the world, with prime office rent at US$255.50 psf p.a. in 1H15.
- Retail Rents: Experienced the largest quarterly decline since 1998, with prime shopping streets in CWB, Central, TST, and Mong Kok seeing drops of -11%, -9.2%, -7%, and -7.6% respectively.
Japan
- Condo Contract Rates: In the greater Tokyo area, 66.0% in September, with a -27.2% year-on-year total supply.
- Condo Prices: Increased +13.2% year-on-year to ¥53.93mn per unit.
- Inventory: Total inventory -64 units month-on-month.
- Used Condo Sales: 2,772 units sold in September, -5.7% year-on-year, the first decrease in 6 months.
- TPP Impact: Logistics industries are expected to benefit from increased transparency in exports and foreign investment relaxation.
India
- Rental Yield: Bengaluru, Mumbai, and Delhi are the top 3 cities with rental yields of 10.5%, 10%, and 9% respectively, according to Knight Frank.
Singapore
- Private Home Sales: 341 units sold in September, -34% month-on-month and -21% year-on-year, the lowest level for the year.
- GDP Growth: +1.4% year-on-year in 3Q, down from +1.7% in 2Q.
- Property Sale: CapitaLand Mall Trust sold Rivervale Mall to a private equity fund for S$190.5mn.
Upcoming Events
| Date |
Market |
Event |
| 22-Oct |
Hong Kong |
CPI composite |
| 22-Oct |
China |
China Sep property prices |
| 21-Oct |
Japan |
Trade balance, exports, imports |
| 23-Oct |
Japan |
Leading index CI |
| 23-Oct |
Singapore |
CPI |
| 26-Oct |
Singapore |
Industrial production |
| 28-Oct |
Hong Kong |
MGCCT results |
Performance Overview (Market-cap Weighted)
| Sub-sector |
1-wk % |
1mo % |
3mo % |
Underlying P/E (x) |
Dividend Yield (%) |
% +/- Fwd. NAV |
| China (off-shore) |
+4 |
+11 |
-7 |
-12 |
9.8 |
+4.2 |
| China (on-shore) |
+3 |
+2 |
-8 |
-17 |
9.6 |
+2.3 |
| Hong Kong |
+3 |
+4 |
-10 |
-12 |
13.9 |
+3.4 |
| India Developers |
-2 |
+7 |
+1 |
-13 |
28.8 |
+1.1 |
| Japan Developers |
-2 |
+6 |
-5 |
-10 |
28.8 |
+0.6 |
| Japan REITs |
+2 |
+7 |
-3 |
-8 |
25.5 |
+3.2 |
| Singapore Developers |
-1 |
+8 |
-9 |
-17 |
21.1 |
+1.8 |
Top / Bottom 5 Performers of the Week
Top 5
| Stock |
1-wk % |
1-mo % |
| OCT |
+11 |
+8 |
| Everande |
+8 |
+9 |
| Shui On Land |
+8 |
+22 |
| Hang Lung Prop |
+8 |
+9 |
| SOHO China |
+6 |
+25 |
Bottom 5
| Stock |
1-wk % |
1-mo % |
| Sino-Ocean Land |
-5 |
+10 |
| ORIX JRest |
-4 |
+4 |
| Milutius Fisan |
-4 |
+5 |
| China Mer. Prop. (A) |
-3 |
-6 |
| Far East Hospitality Trust |
-3 |
+9 |
Buy/Sell-Rated Stocks
Buy-Rated (Market Cap > US$2 bn)
| Stock |
Upside Potential (%) |
| Agile |
87 |
| Shimao |
73 |
| Tokyo Tatemono |
60 |
| Country Garden |
58 |
| Shui On Land |
51 |
Sell-Rated (Market Cap > US$2 bn)
| Stock |
Upside Potential (%) |
| Gemdale Corp. |
-28 |
| Evergrande |
-13 |
| Champion REIT |
-13 |
| Suntec REIT |
0 |
| Advance Residence |
+5 |
Buy-Rated (Market Cap < US$2 bn)
| Stock |
Upside Potential (%) |
| Sobha Developers |
69 |
| Prestige Estate |
67 |
| Oberoi Realty |
49 |
| China Lodging |
12 |
Price as of 16-Oct
| Stock |
Upside / (Downside) Potential (%) |
| Godrej Properties |
-28 |
| Mandarin Oriental |
-10 |
Key Research for the Week
- Sino Land (0083.HK): "Less is more" (Oct 20)
- Japan Real Estate: Sep condo data with sub-70% contract ratios in Tokyo and Kinki regions (Oct 16)
- GLP J-REIT (3281.T): Neutral, with 2016 new supply concerns unwarranted (Oct 16)
- Tokyo Tatemono (8804.T): Little risk of refinancing, valuations low; CL-Buy (Oct 16)
- ORIX JREIT (8954.T): Neutral, with real DPS growth in FP2/16 and focus on tenant replacement (Oct 16)
- Keppel DC REIT (KEPE.SI): In line with expectations, stable operations, more acquisitions in 1H16 (Oct 15)
- China Lodging Group (HTHT): 3Q RevPAR decline moderated with fast pace of new openings (Oct 14)
Key Research Team Contacts
China Property
- Yi Wang, CFA: +86 21 2401 8930
- Vicky Li: +86 21 2401 8926
- Jill Guan: +86 21 2401 8921
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
India Property
- Puneet Jain: +91 22 6616 9046
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
Disclosure
Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, 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. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to www.gs.com/research/hedge.html. Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.
