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<Research>Citi Forecasts Central/ W. Kowloon Offices to Outperform Other Regions Next Yr, Benefiting HLD/ SHKP
Recommend 26 Positive 42 Negative 11 |
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JD-SW (09618.HK) recently agreed to acquire a 50% stake in the CCB Tower in Central, Hong Kong from LAI SUN DEV (00488.HK) for HK$3.5 billion, while a local higher education institution acquired office space in Festival Walk Office Tower, Kowloon Tong from Mapletree Pan Asia Commercial Trust for HK$1.96 billion, a Citi research report indicated. Citi expected that demand for office space from Chinese companies will continue to support the Hong Kong office market. Driving factors include: more Chinese tech magnates and other industry bellwethers may follow the lead of BABA-W (09988.HK) and JD-SW by considering purchasing Hong Kong office properties; an increasing number of A-share companies are dual-listing in Hong Kong and establishing regional HQ or R&D centers there; and Hong Kong launched the “GoGlobal Task Force” in October to assist mainland companies in expanding into international markets. Citi predicted that office space in Central (benefiting HKLD and HENDERSON LAND (00012.HK)) and West Kowloon (benefiting SHK PPT (00016.HK)) will outperform other areas in 2026. It anticipated that rents for major Central property owners (such as HKLD and HENDERSON LAND) may stabilize by the end of 2026. Citi also believed that upcoming high-quality new supply in West Kowloon, such as IGC, may be competitive in attracting demand, with rent levels roughly equivalent to those in Hong Kong Island East, thus benefiting SHK PPT. Given the record-high overall new supply, Citi expected competition in Causeway Bay to intensify. HYSAN DEV (00014.HK)'s Lee Gardens project may perform well, while projects in Hong Kong Island East such as SWIREPROPERTIES (01972.HK)'s Cityplaza and East Kowloon will face some pressure. For Citi's ratings and target prices for Hong Kong property developers, please refer to the separate table. AAStocks Financial News |
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