20150720-高盛-A_glance_at_the_Asia_property_market_11页_316kb

Asia Property Weekly Summary

Core Content Overview

This summary provides a comprehensive view of the Asia property market, highlighting key news, market performance, and upcoming events across China, Hong Kong, India, Japan, and Singapore. The report focuses on residential and commercial property trends, investment activity, and valuation metrics.

Main Points and Key Information

Residential Market Trends

• China:

  • 17 out of 31 cities with data saw an increase in transaction volumes (median +7% week-on-week).
  • 26 out of 30 cities saw volume increases on a year-on-year basis (median +74%).
  • 12 out of 13 cities with data saw price increases (median +1% week-on-week).
  • 8 out of 11 cities saw price increases on a year-on-year basis (median +7%).
  • Fewer cities saw new home price drops in June compared to May, indicating a slight market stabilization.
  • In June, new home prices fell in 34 of the 70 cities monitored, down from 43 in May.
  • Market Cap Weighted Performance:
    • China (offshore): +3% (1-week), -12% (1-month), +10% (3-month)
    • China (onshore): -2% (1-week), -12% (1-month), -8% (3-month)
    • Hong Kong: +3% (1-week), -2% (1-month), -2% (3-month)
    • India Developers: 0% (1-week), +1% (1-month), -14% (3-month)
    • Japan Developers: +5% (1-week), 0% (1-month), -4% (3-month)
  • Key Players:
    • Buy-rated stocks with the largest upside potential (12-month target): Agile (128%), Country Garden (87%), Shi On Land (60%), Tokyo Tatemono (63%), KWG Prop. (60%).
    • Self-rated stocks with the largest downside potential: Champion REIT (-28%), Gemdale Corp. (-26%), Great Eagle (-1%), Advance Residence (-5%), Evergarden (-2%).

• Hong Kong:

  • 53 primary residential units sold in the week ending Jul 19, down from 52 in the previous week.
  • Secondary market prices fell by 0.4% week-on-week as of Jul 12.
  • Henderson Land is in discussions with the government to convert 2 agricultural plots (total GFA: 944,000sf) in New Territories North into residential use, with a land premium due by end of 2016.
  • Property buyers from mainland China accounted for 4.7% of transactions (or 7.3% by value) in 1Q15, the lowest level in 6 years.
  • Retail rents in traditional shopping locations declined by 7.3% quarter-on-quarter in 2Q15.

• India:

  • DLF is planning to raise Rs 25,000-30,000 mn via private equity and is in talks with GIC to sell a stake in a new housing project in New Delhi.

• Japan:

  • Real Estate Economic Institute reported that the contract rate in the greater Tokyo area was 78.7% in June, with total supply at 3,503 units (flat year-on-year).
  • Used house prices in Tokyo Metropolitan area dropped for the first time in 3 months to ¥29.52 mn.
  • Mitsui Fudosan opened an outlet mall in Toyama with 170 tenants, expecting 3-3.5 mn visitors and ¥17 bn in sales.

• Singapore:

  • 375 private new homes sold in June (-42% month-on-month, -22% year-on-year).
  • 3,564 private new homes sold in 1H15 (-21% year-on-year).
  • Visitor arrivals rose by 1.1% year-on-year in May to 1.22 mn, the first increase since February 2014.
  • CapitaLand sold Bedok Mall to CapitaLand Mall Trust for S$780 mn.

Commercial Property Market Trends

• Office Market:

  • Hong Kong: Office rental index at 175, with a 4% increase from end-12. Vacancy rates remained stable at 4%.
  • Beijing: Office rental index at 297, up 35% from end-12. Vacancy rates increased from 3% to 5%.
  • Shanghai: Office rental index at 151, up 2% from end-12. Vacancy rates remained at 9%.
  • Guangzhou: Office rental index at 154, up 2% from end-12. Vacancy rates increased from 10% to 8%.
  • Shenzhen: Office rental index at 260, up 25% from end-12. Vacancy rates dropped from 8% to 4%.
  • Tokyo: Office rental index at 92, up 1% from end-12. Vacancy rates remained at 6%.
  • Mumbai: Office rental index at 70, down 9% from end-12. Vacancy rates increased from 30% to 30%.
  • Bangalore: Office rental index at 101, down 5% from end-12. Vacancy rates increased from 4% to 4%.
  • Singapore: Office rental index at 228, up 14% from end-12. Vacancy rates remained at 11%.

• Retail Market:

  • Hong Kong: Retail rental index at 185, up 6% from end-12. Vacancy rates remained stable at 4%.
  • Beijing: Retail rental index at 193, up 15% from end-12. Vacancy rates increased from 3% to 5%.
  • Shanghai: Retail rental index at 133, up 6% from end-12. Vacancy rates increased from 10% to 8%.
  • Tokyo: Retail rental index at 103, down 3% from end-12. Vacancy rates increased from 7% to 5%.
  • Singapore: Retail rental index at 125, flat from end-12. Vacancy rates increased from 11% to 11%.

Upcoming Events

• Japan:
  • Leading index, coincident index (Jul 21)
  • Exports, imports, trade balance (Jul 22)
• Hong Kong:
  • CPI composite (Jul 21)
  • Exports, imports, trade balance (Jul 27)
• Singapore:
  • AREIT 1QFY16 and CMT 2Q15 results (Jul 22)
  • Industrial production, CCT 2Q15 results and URA/HDB 2Q15 statistics (Jul 24)
• China:
  • Industrial profits (Jul 26)

Key Research and Analysis

• China: The real estate market is showing signs of recovery, with fewer cities experiencing price drops. However, investment activity remains subdued.
• Hong Kong: Residential market is experiencing low transaction volumes and declining secondary market prices. Henderson Land's land conversion plans are a notable development.
• India: DLF is raising capital via private equity and exploring partnerships with GIC.
• Japan: Condo market is stable with a high contract rate in Tokyo, but used house prices are declining.
• Singapore: Private home sales are down, but visitor arrivals are showing a slight increase.

Valuation and Performance Highlights

• Valuation Comparison:

  • China (offshore): Underlying P/E at 8x, Dividend Yield at 4.7%, % +/- Fwd. NAV at 4.0%
  • China (onshore): Underlying P/E at 12x, Dividend Yield at 10.7%, % +/- Fwd. NAV at 2.0%
  • Hong Kong: Underlying P/E at 18x, Dividend Yield at 10.4%, % +/- Fwd. NAV at 3.0%
  • India Developers: Underlying P/E at 10x, Dividend Yield at 28.2%, % +/- Fwd. NAV at 1.2%
  • Japan Developers: Underlying P/E at 13x, Dividend Yield at 29.5%, % +/- Fwd. NAV at 0.5%
  • Japan REITs: Underlying P/E at 12x, Dividend Yield at 26.0%, % +/- Fwd. NAV at 3.1%
  • Singapore Developers: Underlying P/E at 3x, Dividend Yield at 19.0%, % +/- Fwd. NAV at 2.2%

• Top and Bottom 5 Performers of the Week:

  • Top 5:
    • Japan Real Estate (+11% 1-week, -1% 1-month)
    • Nippon Building Fund (+11% 1-week, -1% 1-month)
    • OCT (+10% 1-week, -30% 1-month)
    • Japan Retail Fund (+10% 1-week, -1% 1-month)
    • DA Office (+10% 1-week, 0% 1-month)
  • Bottom 5:
    • Gemdale Corp. (-14% 1-week, -16% 1-month)
    • Prestel Real Estate (-5% 1-week, -2% 1-month)
    • Presidette (-4% 1-week, -5% 1-month)
    • Home Inn (-3% 1-week, -9% 1-month)
    • Hongkong & Shanghai HC (-2% 1-week, -7% 1-month)

Key Research Team

• China Property: Yi Wang, CFA, Vicky Li, Jill Guan
• Hong Kong Property: Anthony Wu, Justin Kwok, CFA, Claire Cheng, Nelson Wang
• Hong Kong Conglomerates: Simon Cheung, CFA, Janet Lu, Alex Ye
• India Property: Puneet Jain
• Japan Property: Sachiko Okada, Watanabe, Akira
• Singapore Property: Paul Lian, Jason Yeo, Vincent Lim

Important Disclosures

• Goldman Sachs does and seeks to do business with companies covered in its research reports, which may affect the objectivity of the report.
• Investors should consider this report as only a single factor in making investment decisions.
• For full disclosure, refer to the Disclosure Appendix or visit www.gs.com/research/hedge.html.