[ET Net News Agency, 23 October 2017] Deutsche Bank said foreign demand has been a
significant booster to the HK property market since 2010. Nevertheless, following various
policies targeted at discouraging or limiting foreign demand, the research house expects
demand/supply dynamics to normalize and to reflect local fundamentals.
Specifically, following recent measures imposed by the Chinese government to restrict
Chinese companies investing in foreign real estate, DB expects office cap rates to expand.
On factoring in a 25bps cap rate expansion in the next 12 months (from flat previously),
DB cut its NAV estimates by 0.5%-2.5% and target price for HK property counters by
0%-2.5%. Meanwhile, with fewer foreign players, the research house anticipates more
rational pricing in the land market.
DB revised its target prices for the property counters as follows:
Name Rating Target Price
-------------------------------------------------------
CK Asset (01113) Buy HK$68.6 to HK$69.3
Hang Lung (00101) Hold HK$16.5 to HK$16.5
Henderson Land (00012) Sell HK$47.9 to HK$47.5
Hysan Dev (00014) Sell HK$32.9 to HK$32.3
Kerry Properties (00683) Hold HK$30.1 to HK$30.0
New World Dev (00017) Hold HK$11.1 to HK$11.0
SHK Properties (00016) Hold HK$124.3 to HK$122.3
Sino Land (00083) Hold HK$14.5 to HK$14.4
Wharf Holdings(00004) Hold HK$65.6 to HK$64.6
(KL)