Asia Property Weekly Summary
Core Content Overview
This summary provides an overview of the Asia property market, highlighting key news, market performance, and upcoming events. It includes insights on residential and commercial property trends across major markets in China, Hong Kong, India, Japan, and Singapore.
Key News and Updates
Hong Kong
- Residential Sales: 367 primary residential units were sold in the week ending Sep 07, a 10% increase from the 3-month average of 333 units.
- Secondary Market Prices: As of Aug 31, secondary market prices rose 0.6% week-over-week, with a 6.7% year-to-date increase.
- Kwun Tong Redevelopment: Sino Land and Chinese Estates won the redevelopment project with an all-in land premium below HK$7bn. Sino Land owns 90% of the development, which will provide around 1,700 flats.
- Commercial Site Acquisition: Henderson Land acquired a commercial site on 15 Middle Road, TST, for HK$4.688bn, with an estimated GFA between 203,827 - 339,712 sq ft. Henderson will invest up to HK$6.5bn in the project.
- Citistore Retail Chain: Henderson Investment (00097) plans to acquire the operator of the Citistore retail chain from Henderson Land (00012) for HK$934.5mn.
China
- Hangzhou Policy Relaxation: The Yuhang District Government is considering a 1.3% purchase subsidy, up to RMB30,000, to boost the real estate market.
- Home Sales: Home sales in China bottomed in Q2FY14, with prices not expected to recover for at least 12 months.
- Shanghai Land Market: The Shanghai land market saw a significant drop in August, with 6 land parcels totaling 234,000 sqm sold, a 68% decline from July.
India
- DLF Land Allocation Cancellation: The Punjab and Haryana High Court cancelled the allocation of a 350-acre land parcel in Gurgaon to DLF and asked the government to invite fresh bids.
Japan
- Sendai Airport Operation Rights: MLIT will sell the operation rights of Sendai Airport in 2015, with developers like Mitsubishi Estate and Mitsui Fudosan considering acquisition.
- Tokyo Olympic Village: The Tokyo Government announced details of the Olympic athletes' village for the 2020 games, with a condo developer to be decided in spring 2016.
- Croseus Retail Trust: Acquired One's Mall in Chiba for JPY 11bn, with an estimated annual NOI of JPY 512mn and a 4.7% NOI return.
Singapore
- HDB Resale Market: HDB resale prices and volume fell 1.1% month-over-month in August.
- Private Residences: Keppel Land is set to begin sales of its Highline Residences project with an average price of S$1,800-S$1,900 psf after discounts.
- Developer Profit Margins: Profit margins for new condominium launches in Singapore dropped to 5%-10% in 2014 from 16%-23% in 2013.
Upcoming Events
| Date |
Market |
Events |
| 8-Sep |
Japan |
Trade balance, GDP |
| 9-Sep |
India |
CPI, industrial production |
| 10-Sep |
India |
Exports, imports |
| 10-Sep |
Japan |
PPI, CPI |
| 11-Sep |
China |
PPI, CPI |
| 12-Sep |
Hong Kong |
Industrial production, PPI |
| 13-Sep |
China |
Retail sales, industrial production |
Residential Market Snapshot
| Market |
Price Index |
vs End-12 |
Last Update |
13Q4 |
14Q1 |
14Q2 |
14Q3 |
14Q4 |
15Q1 |
15Q2 |
15Q3 |
15Q4 |
16Q1 |
16Q2 |
16Q3 |
16Q4 |
17Q1 |
17Q2 |
17Q3 |
17Q4 |
| Hong Kong |
242 |
9.6% |
31-Aug-14 |
+0% |
-2% |
+3% |
+1% |
+2% |
-0% |
+0.7% |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
|
| Beijing |
476 |
21.8% |
31-Aug-14 |
-1% |
+8% |
-2% |
+10% |
+9% |
-6% |
+34% |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
|
| Shanghai |
292 |
-18.7% |
31-Aug-14 |
-9% |
-27% |
+2% |
+2% |
-18% |
+3% |
-6% |
+2% |
-1% |
+1% |
+1% |
+1% |
+2% |
+3% |
|
|
|
| Guangzhou |
286 |
-13.3% |
31-Aug-14 |
-9% |
-23% |
-18% |
+14% |
-8% |
-5% |
-3% |
-6% |
-2% |
+3% |
+2% |
+1% |
+1% |
+1% |
|
|
|
| Shenzhen |
286 |
-3.5% |
31-Aug-14 |
-17% |
+5% |
+1% |
+11% |
-10% |
+3% |
-7% |
+6% |
+14% |
+3% |
+2% |
+1% |
+1% |
+2% |
|
|
|
Commercial Property Market Snapshot
Office Rental Value
| Market |
Rental Index |
vs End-12 |
Last Update |
13Q2 |
13Q3 |
13Q4 |
14Q1 |
Vacancy |
| Hong Kong |
169 |
0% |
31-Mar-14 |
+1% |
+0% |
-1% |
-1% |
3.4% |
| Beijing |
229 |
4% |
31-Mar-14 |
+1% |
-1% |
+2% |
-0% |
1.3% |
| Shanghai |
146 |
-1% |
31-Mar-14 |
+1% |
-3% |
+3% |
-1% |
8.3% |
| Guangzhou |
156 |
3% |
31-Mar-14 |
+2% |
-1% |
+1% |
-0% |
11.8% |
| Shenzhen |
232 |
11% |
31-Mar-14 |
+5% |
-1% |
+4% |
+2% |
6.4% |
| Tokyo |
89 |
-2% |
31-Mar-14 |
-1% |
-1% |
-0% |
+1% |
8.5% |
| Mumbai |
74 |
-4% |
31-Mar-14 |
+0% |
+0% |
+0% |
-4% |
32.6% |
| Bangalore |
109 |
2% |
31-Mar-14 |
+0% |
+0% |
+1% |
+0% |
4.1% |
Retail Rental Value
| Market |
Rental Index |
vs End-12 |
Last Update |
13Q2 |
13Q3 |
13Q4 |
14Q1 |
Vacancy |
| Hong Kong |
184 |
5% |
31-Mar-14 |
+1% |
+1% |
+1% |
+1% |
n.a. |
| Beijing |
181 |
8% |
31-Mar-14 |
+2% |
+2% |
+1% |
+1% |
8.3% |
| Shanghai |
130 |
3% |
31-Mar-14 |
+2% |
+1% |
+1% |
+2% |
6.8% |
| Mumbai |
109 |
2% |
31-Dec-13 |
+0% |
+0% |
+0% |
n.a. |
n.a. |
| Singapore |
123 |
-1% |
31-Mar-14 |
-1% |
+1% |
+0% |
-0% |
7.1% |
Top Buy/Sell Ideas
Market Cap > US$2bn
| Stock |
Upside/Downside Potential (%) |
Rating |
| Country Garden |
79 |
Buy |
| DLF |
66 |
Buy |
| Aeon Mall Co Ltd |
54 |
Buy |
| Longfor Prop |
40 |
Buy |
| China Vanke (H) |
33 |
Buy |
| Gemdale Corp. |
-21 |
Sell |
| Suntec REIT |
-18 |
Sell |
| Advance Residence |
-18 |
Sell |
| Champion REIT |
-15 |
Sell |
| Japan Real Estate |
-13 |
Sell |
| Nippon Building Fund |
-3 |
Sell |
Market Cap < US$2bn
| Stock |
Upside/Downside Potential (%) |
| Sobiha Developers |
31 |
| OUE Hospitality Trust |
29 |
| Oberoi Realty |
27 |
Key Research for the Week
- Hong Kong: Buy Swire Prop (CL) and HK Land.
- Home Inns & Hotels Management Inc. (HMIN): Buy, with stable RevPAR expected in 3Q.
- China: Relaxation of direct financing could benefit high leverage developers.
- Japan: Neutral rating for Nippon Building Fund and Frontier Real Estate; estimates revised.
- Country Garden (2007.HK): Buy, with cash flow discipline and solid growth potential.
- Sino Land (0083.HK): Big leap in land banking, though earnings gap remains.
- China Developers: Both volume and inventory increased in the last week of August.
- Shui On Land (0272.HK): Below expectations due to heavy financial pressure.
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