[ET Net News Agency, 2 July 2019] Citi Research said HK property companies remain
cautiously optimistic on 2H property market outlook, despite a highly uncertain macro
environment.
The research house said the message came out from Citi's AP Property Conference held on
27-28 June, attended by 19 listed HK property companies.
It has become a consensus view amongst the developers that HK land supply would be
southbound, coupled with the likelihood of an interest rate cut, Citi said.
Overall housing demand is likely to remain robust even under a prolonged trade war
scenario. HK office rentals should be supported by very low completions in 2020, while HK
luxury retail might soften a bit but with a limited downside. Citi thinks the relatively
strong fundamentals of HK property segments should make the property companies to be
considered as new defensive plays in different macro scenarios.
Citi expects home price to be up 5-10% in 2H, developers likely to see a second round of
re-rating. Its top buys are Sun Hung Kai Properties (00016), Henderson Land Development
(00012), New World Development (00017) and Link REIT (00823). (KL)