Page 1 In Singapore, this research report or research analyses may only be distributed to Institutional Investors, Expert Investors or Accredited Investors as defined in the Securities and Futures Act, Chapter 289 of Singapore. “Recipients of this report, received from DBS Vickers Research (Singapore) Pte Ltd (“DBSVR”), are to contact DBSVR at +65 6535 9688 in respect of any matters arising from or in connection with this report.” www.dbsvickers.com ed- JS/sa- AH Wong Chuk Hang – emerging business area Strata-title sale of Global Trade Square is well received. Henderson Land launched Global Trade Square in Wong Chuk Hang, a 50/50 jv with Hip Sing Hong (unlisted) for strata-title sale in Apr 13. The sale was well-received with c.80% of space sold at an ASP of HK$9,400psf. Global Trade Square is a Grade A office building with GFA of 214,467sf, and is scheduled for completion in 1H14. Better transportation connectivity in sight. In recent years, office properties in this area have become increasingly popular among investors/end-users amid expectations of significant improvement in future transportation connectivity. MTRC is constructing the 7-km South Island Line (East) that will extend the train services from Admiralty to the southern district of Hong Kong Island. When this new line becomes operational in 2015, travelling time between Wong Chuk Hang and Admiralty will be shortened to c.6 minutes (from 15-20 minutes currently). This should make Wong Chuk Hang a more attractive option for office location. Surging office prices. Against this backdrop, capital values of office properties in Wong Chuk Hang appreciated rapidly in the past two years. In early 2011, Wheelock & Co sold the office floors at One Island South for just HK$6,000-6,500psf, although it is better located next to the future Wong Chuk Hang MTR station. Wheelock & Co also retained the retail podium (GFA: 90,500 sf) of One Island South for long-term investment. Tenants are mainly F&B operators, fashion outlets and furniture trades. New business area in the making Cheung Kong and SHKP are developing two commercial buildings in Wong Chuk Hang which will provide GFA of c.444,000sf in total upon scheduled completion in 2015. In addition, the ex-Aberdeen Fire Station site (AIL 462), earmarked for business use, will be available for public tender in Mar 14 at the earliest. Upon completion, it will provide total GFA of c.226,000sf. These developments should help transform the area into an emerging business area. More hotel developments in the area. Given the proximity to a tourist attraction, Ocean Park, and improving infrastructure, Wong Chuk Hang is seeing more hotels coming up. Chinachem’s L’Hotel Island South (432 rooms) commenced service in 2010, with redevelopment of two industrial sites into hotels now underway. This should also help complement the long-term growth of Wong Chuk Hang as a business area. HSI: 22,555 ANALYST Jeff YAU CFA· (852) 2820 4912 · [email protected]Allen CHAN [email protected]South Island Line (East Section) Source: Company Wong Chuk Hang MTR Station Source: DBS Vickers DBS Group Research . Equity 30 May 2013 China / Hong Kong Monthly Chart Book HK Property (Issue No. 40) Refer to important disclosures at the end of this report
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Page 1
In Singapore, this research report or research analyses may only be distributed to Institutional Investors, Expert Investors or Accredited Investors as defined in the Securities and Futures Act, Chapter 289 of Singapore.
“Recipients of this report, received from DBS Vickers Research (Singapore) Pte Ltd (“DBSVR”), are to contact DBSVR at +65 6535 9688 in respect of any matters arising from or in connection with this report.”
www.dbsvickers.com
ed- JS/sa- AH
Wong Chuk Hang – emerging business area Strata-title sale of Global Trade Square is well received. Henderson Land launched Global Trade Square in Wong Chuk Hang, a 50/50 jv with Hip Sing Hong (unlisted) for strata-title sale in Apr 13. The sale was well-received with c.80% of space sold at an ASP of HK$9,400psf. Global Trade Square is a Grade A office building with GFA of 214,467sf, and is scheduled for completion in 1H14.
Better transportation connectivity in sight. In recent years, office properties in this area have become increasingly popular among investors/end-users amid expectations of significant improvement in future transportation connectivity. MTRC is constructing the 7-km South Island Line (East) that will extend the train services from Admiralty to the southern district of Hong Kong Island. When this new line becomes operational in 2015, travelling time between Wong Chuk Hang and Admiralty will be shortened to c.6 minutes (from 15-20 minutes currently). This should make Wong Chuk Hang a more attractive option for office location.
Surging office prices. Against this backdrop, capital values of office properties in Wong Chuk Hang appreciated rapidly in the past two years. In early 2011, Wheelock & Co sold the office floors at One Island South for just HK$6,000-6,500psf, although it is better located next to the future Wong Chuk Hang MTR station. Wheelock & Co also retained the retail podium (GFA: 90,500 sf) of One Island South for long-term investment. Tenants are mainly F&B operators, fashion outlets and furniture trades.
New business area in the making Cheung Kong and SHKP are developing two commercial buildings in Wong Chuk Hang which will provide GFA of c.444,000sf in total upon scheduled completion in 2015. In addition, the ex-Aberdeen Fire Station site (AIL 462), earmarked for business use, will be available for public tender in Mar 14 at the earliest. Upon completion, it will provide total GFA of c.226,000sf. These developments should help transform the area into an emerging business area.
More hotel developments in the area. Given the proximity to a tourist attraction, Ocean Park, and improving infrastructure, Wong Chuk Hang is seeing more hotels coming up. Chinachem’s L’Hotel Island South (432 rooms) commenced service in 2010, with redevelopment of two industrial sites into hotels now underway. This should also help complement the long-term growth of Wong Chuk Hang as a business area.
No Pro jec t /A dd ress /L o t no Dev eloper T o t al G F A EDO C(sf )
1 One Island South Wheelock & Co 812,800 2011
2 Global Trade Square Henderson Land/ Hip Shing Hong 214,467 20143 41 Heung Yip Road Cheung Kong 323,983 20154 50 Wong Chuk Hang Road SHKP 120,000 20155 34 Wong Chuk Hang Road Priv ate dev eloper 166,000 20156 1 Yip F at Street Priv ate dev eloper 139,000 n.a.7 8-10 Wong Chuk Hang Road* Swire Prop/ China Motor Bus 382,500 n.a.8 A IL 462 (to be tendered) n.a. 226,044 n.a.9 38 Wong Chuk Hang Road Priv ate dev eloper 163,500 n.a.
* Currently designated for industrial use Source: Company, Local press, DBS Vickers Selected commercial and hotel properties in Wong Chuk Hang
Pre-sale consent pending approval (Apr 2013) Project Developers Location Location No. of unitThe Nova COLI/URA HK Sai Ying Pun 255SIL 850 Hong Kong Housing Society HK Shau Kei Wan 274The Avenue Sino Land/Hopewell/URA HK Wan Chai 1,118The Avenue Sino Land/Hopewell/URA HK Wan Chai 181
NKIL 6306 Kerry Properties Kln Kowloon Tong 41Park Metropolitan Sino Land/URA Kln Kwun Tong 299MacPherson Place Kowloon Development/URA Kln Mong Kok 293Heya Star Hong Kong Housing Society Kln Sham Shui Po 175Heya Delight Hong Kong Housing Society Kln Sham Shui Po 130Bayview Kerry Properties Kln To Kwa Wan 175Austin Station project - Site C NWD/Wheelock Kln Tsim Sha Tsui West 576
Lot 385 RP & Exts in DD 352 CITIC Pacific/HKR Int'l NT Discovery Bay 102FSSTL 202 SHKP NT Fanling 144The Rise Cheung Kong NT Kwai Chung 402Lot 245 in DD 331 Sino Land NT Lantau 16Lohas Park Package 3 Cheung Kong/MTRC NT Lohas Park 1,648Double Cove Ph 2 Henderson Land/NWD NT Sha Tin 865Mont Vert Cheung Kong NT Tai Po 1,350TPTL 200 Sino Land NT Tai Po 545TPTL 201 Sino Land/K Wah Int'l NT Tai Po 546Century Gateway Ph 2 SHKP NT Tuen Mun 911TMTL 422 Manhattan Realty NT Tuen Mun 75TCTL 37 Nan Fung Group NT Tung Chung 1,419Park Signature NWD NT Yuen Long 1,620The Woodsville NWD NT Yuen Long 236Lot 421 in DD 127 NWD NT Yuen Long 98
30-Apr-13 Sw ire Pro pert ies was reportedly in discussions with Cit ic Pac if ic on possible acquisition of DCH Commercial Centre in Quarry Bay .
30-Apr-13 It was reported that Ho pew ell Ho ld ings plans to raise US$800m from the spin-off of its real-estate business by the end of J un 13.
02-May -13 National Australia Bank leased 32/F at Hy san Dev elop ment 's Hy san Place at a monthly rent of HK$65psf.
02-May -13 Ho ngk on g and Shang hai Ho t els entered into a conditional agreement with an independent third party for the acquisition of 21 av enue Kl嶵er, a commercial building adjacent to The Peninsula Paris Hotel, for �56m.
06-May -13 A watch retailer agreed to lease 100,000sf of retail space at Sin o L and 's Kwun Tong Harbour Plaza at a monthly rent of c.HK$10psf.
07-May -13 A sia St and ard unified its ownership of the property at 10 & 12 Kimberley Street in Tsim Sha Tsui and plans to redev elop this into a 90-room hotel.
08-May -13 Hend erso n L and offered the first batch of 12 units at Global Trade Square, a Grade A office building in Wong Chuk Hang, for strata-title sale at ASP of HK$9,529psf.
10-May -13 It was reported that ING Asia Pacific is seeking to sublet as much as c.70,000sf of space at SHK P's ICC at Kowloon Station.
13-May -13 Cheun g K on g agreed to cancel the hotel room sale at Apex Horizon Hotel after receiv ing notification from SF C that arrangements related to this hotel room sale appears to constitute a collectiv e inv estment scheme.
15-May -13 Committed office occupancy of Hy san Dev elopment 's Hy san Place improv ed to 70% from 62% in Apr13.
16-May -13 Champ io n REIT exercised the right of first refusal to acquire four floors of Citibank Plaza in Central (GF A: 78,316sf) for HK$2,155m or HK$27,517psf.
22-May -13 Committed occupancy at L ai Su n Dev elop ment 's 50%-owned CCB Tower in Central exceeded 83%.
27-May -13 Both Labour Department and T he W h arf Ho ld ings ' Wharf T&T leased c.50,000sf at Ho pew ell Ho ld in gs ' KITEC at a monthly rent of c.HK$20psf.
30-May -13 L ang ham Ho sp it alit y In v est men t s was listed on the Main Board of Hong Kong Stock Exchange.
3-Jun Long Ping (South) station tender close5-Jun The Link REIT FY13 annual results7-Jun KIL 11228 & STTL 482 tender close18-Jun Unemployment rate Mar - May 201320-Jun CPI May 201321-Jun TKOTL 93 & TMTL 434 tender close
2-Jul Retail Sales May 20135-Jul TKOTL 126 & Lot 750 in DD332 tender close18-Jul Unemployment rate Apr - Jun 201322-Jul CPI Jun 201326-Jul TMTL 435 & STTL 563 tender close
1-Aug Retail Sales Jun 201313-Aug Mid-year Population for 201316-Aug GDP 2Q 201319-Aug Unemployment rate May - Jul 201320-Aug CPI Jul 2013
J une 2013
J uly 2013
A ugust 2013
Source: Census and Statistics Department, Lands Department, HK Exchange, DBS Vickers
01 Mar (Prosperity REIT) Robust rental reversions (BUY)01 Mar (SHKP) Aiming at volume-driven growth (BUY)07 Mar (Hysan Development) Plans underway for next redevelopment (HOLD)08 Mar (Hongkong Land) Evolv ing regional property play (BUY)12 Mar (MTRC) Soon-to-be-concluded FAM review (HOLD)15 Mar (Swire Properties) Steady as she goes (BUY)15 Mar (Kerry Properties) Undemanding valuations (BUY)18 Mar (Champion REIT) Opportunity to consolidate its ownership at Citibank Plaza (BUY)25 Mar (Wing Tai Properties) Focusing on its niche (BUY)26 Mar (Henderson Land) Seeking to unlock farmland value (BUY)27 Mar (Cheung Kong) Compelling valuations; solid foundation for growth (BUY)27 Mar (Wharf) On the right track (BUY)28 Mar (Wheelock & Co) Growing development pipeline (BUY)28 Mar (K.Wah International) Property development to propel growth (BUY)28 Mar Hong Kong Property Sector Monthly Chartbook
09 Apr (Sunlight REIT) Partial loan refinancing at favourable costs (BUY)11 Apr (Wheelock & Co) Growing development earnings stream (BUY)17 Apr (Sunlight REIT) On-track reversionary growth (BUY)17 Apr (MTRC) Conclusion of FAM rev iew (HOLD)30 Apr Hong Kong Property Sector Monthly Chartbook
10 May (Fortune REIT) F iring on all cy linders (BUY)13 May (Tai Cheung) Usage conversion prompts value enhancement (BUY)16 May (Great Eagle) Successful hotel spinoff should prompt further re-rating (BUY)20 May (Champion REIT) Price premium paid for a strategic acquisition (BUY)24 May (Hong Kong Property Sector) Ripe for acquisition-led growth 30 May Hong Kong Property Sector Monthly Chartbook
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FULLY VALUED (negative total return i.e. > -10% over the next 12 months)
SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)
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