wong chuk hang – emerging business area...

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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

http://www.hibor.com.cn


HK Property

Commercial supply

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

Source: DBS Vickers



HK Property

Global Trade Square – Henderson Land Global Trade Square – Henderson Land One Island South – Wheelock

41 Heung Yip Road – Cheung Kong 50 Wong Chuk Hang Road – SHKP 50 Wong Chuk Hang Road – SHKP

8-10 Wong Chuk Hang Rd –Swire/CMB AIL 462 L’Hotel Island South – Chinachem



HK Property

TABLE OF CONTENTS

Share price performance 5

What were the transaction trends in primary and secondary markets? 9

What are the factors affecting residential demand and supply? 11

What projects were launched? 13

Where are the upcoming projects? 14

How about the office market? 15

How about the retail market? 16

What did corporates do? 18

Discount to NAV – Property developers & investors 20

Discount to NAV band – Property developers & investors 23

Price to book NAV band - REITs 26

Historical yield band - REITs 27

Any important dates to look out for? 28

Our past publications 29



HK Property

Share price performance

Property developer index vs HSI Property developer index vs HSI (6 month)

0

50

100

150

200

250

300

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

HK property developers share price index HSI

Rebased (1 Jan 00 = 100)

95

100

105

110

115

120

Nov

-12

Dec

-12

Jan-

13

Feb-

13

Mar

-13

Apr

-13

May

-13

HK property developers share price index HSI

Rebased (28 Nov 12 = 100)

Property investor vs HSI Property investor index vs HSI (6 month)

0

100

200

300

400

500

600

Jan-

01

Jan-

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05

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06

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Jan-

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Jan-

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11

Jan-

12

Jan-

13

HK property investors share price index HSI


90

100

110

120

130

140

Nov

-12

Dec

-12

Jan-

13

Feb-

13

Mar

-13

Apr

-13

May

-13

HK property investors share price index HSI


REIT vs HSI REIT index vs HSI (6 month)

406080

100120140160180200220240260280

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

REITs share price index HSI


90

95

100

105

110

115

120

Nov

-12

Dec

-12

Jan-

13

Feb-

13

Mar

-13

Apr

-13

May

-13

REITs share price index HSI


Source: Thomson Reuters; DBS Vickers Valuation – Property developers



HK Property

Disc . t o

M k t L ast 12 - m PE PE Dec - 13 Dec - 13 Y ield Y ieldCompany Code F Y E Cap Pric e t arget R ec om F Y 13 F Y 14 NA V NA V F Y 1 3 F Y 14

HK $bn HK $ HK $ x x HK $ % % %

Cheung Kong 1 HK Dec 258 111.50 148.30 Buy 9.4 8.8 180.7 (38) 3.0 3.3

Hang Lung Props ^ 101 HK Dec 128 28.55 32.40 Buy 22.2 19.4 38.1 (25) 2.6 2.6

Henderson Land ^ 12 HK Dec 136 56.15 60.55 Buy 17.4 17.4 93.2 (40) 2.1 2.1

K Wah Int'l 173 HK Dec 11 4.06 5.33 Buy 6.6 6.1 11.8 (66) 3.7 3.7

Kerry Properties ^ 683 HK Dec 47 32.85 47.25 Buy 10.4 9.9 78.7 (58) 2.9 2.9

MTR Corp ^ 66 HK Dec 182 31.45 32.80 Hold 23.2 17.9 38.4 (18) 2.5 2.5

New World Dev 17 HK J un 81 12.86 13.84 Hold 11.1 10.3 25.2 (49) 3.3 3.3

Sino Land ^ 83 HK J un 71 11.98 16.52 Buy 11.0 11.0 22.0 (46) 4.2 4.2

SHKP ^ 16 HK J un 281 105.80 141.50 Buy 16.5 12.6 188.7 (44) 3.2 3.2

Tai Cheung 88 HK Mar 4 6.39 6.93 Buy 7.8 8.0 17.3 (63) 4.7 4.7

Wing Tai Properties 369 HK Dec 7 5.16 7.00 Buy 13.8 7.6 14.0 (63) 2.6 2.6^ underlying profit

Source: Thomson Reuters, DBS Vickers Valuation – Property investors

Disc . t o

M k t Last 12- m PE PE Dec - 13 Dec - 13 Y ield Y ieldCompany Code F Y E Cap Price t arget Recom F Y 13 F Y 14 NA V NA V F Y 13 F Y 14

HK $bn HK $ HK $ x x HK $ % % %

Great Eagle ^ 41 HK Dec 20 31.35 40.50 Buy 11.5 11.4 65.5 (52) 2.1 2.1

HK Land ^@ HKL SP Dec 17 7.08 8.12 Buy 19.6 20.0 9.6 (26) 2.4 2.4

Hysan Dev ^ 14 HK Dec 38 35.30 40.10 Hold 20.3 19.2 57.3 (38) 3.0 3.2

Swire Properties ^ 1972 HK Dec 149 25.50 30.00 Buy 24.5 23.6 35.3 (28) 2.1 2.1

Wharf ^ 4 HK Dec 212 69.90 72.70 Buy 18.0 16.1 85.5 (18) 2.5 2.7 @ denominated in USD

^ underlying profit

Source: Thomson Reuters, DBS Vickers Valuation – REITs

M k t L ast 12 - m Y ield Y ield Y ield Pric e/ G earing

REIT Code F Y E Cap Pric e T arget R ec o m F Y 12A F Y 13 F F Y 14F BV Rat io

HK $m HK $ HK $ % % % (x ) %

Champion REIT* 2778 HK Dec 22,291 3.92 4.26 Buy 5.3 5.0 4.7 0.50 20.4

F ortune REIT* 778 HK Dec 13,126 7.71 8.38 Buy 4.2 4.6 4.9 0.87 23.1

Yuexiu REIT^ 405 HK Dec 12,909 4.69 n.a. NR 6.0 6.1 6.4 0.84 34.0

Hui Xian REIT@^ 87001 HK Dec 21,761 4.25 n.a. NR 5.6 6.0 6.5 0.77 5.0

Link REIT* 823 HK Mar 94,726 41.40 47.00 Buy 3.1 3.5 3.8 1.34 14.9

Prosperity REIT* 808 HK Dec 3,968 2.86 2.96 Buy 4.7 5.1 5.3 0.67 22.4

Regal REIT^ 1881 HK Dec 8,372 2.57 n.a. NR 5.4 6.7 7.3 0.53 22.8

Sunlight REIT* 435 HK J un 5,837 3.61 3.89 Buy 4.7 4.7 5.0 0.59 26.9

@ denominated in RMB

^ DPU based on consensus

Source: Thomson Reuters, *DBS Vickers



HK Property

Trading range comparison – Property developers and investors

Last Price

P/E at High Price

P/E at Low Price

Discount to NAV at High

Price

Discount to NAV at Low

PriceHigh Price

Low Price

High Price

Low Price

High Price

Low Price

HK$ x x % % HK$ HK$ HK$ HK$ HK$ HK$

Property dev elopers

Cheung Kong 1 HK 111.50 10.2 9.4 -26% -32% 120.60 110.70 118.80 111.50 118.80 111.50

Hang Lung Props 101 HK 28.55 24.0 22.0 -14% -22% 30.90 28.30 30.90 28.55 30.90 28.55

Henderson Land 12 HK 56.15 17.9 15.0 -37% -47% 57.60 48.50 57.60 52.50 57.60 55.65

K Wah Int'l 173 HK 4.06 7.2 6.3 -55% -61% 4.45 3.87 4.44 3.87 4.44 4.06

Kerry Properties 683 HK 32.85 12.6 10.4 -45% -55% 39.90 32.85 36.00 32.85 36.00 32.85

MTR Corp 66 HK 31.45 24.1 22.2 -9% -17% 32.75 30.05 32.50 30.05 32.50 31.15

New World Dev 17 HK 12.86 12.4 10.9 -37% -44% 14.28 12.60 14.18 12.60 14.18 12.86

Sino Land 83 HK 11.98 13.0 11.0 -31% -42% 14.20 11.98 13.40 11.98 12.98 11.98

SHKP 16 HK 105.80 18.7 16.2 -31% -40% 120.00 103.40 114.00 103.40 112.60 105.80

Tai Cheung 88 HK 6.39 8.0 7.4 -62% -65% 6.56 6.09 6.46 6.09 6.46 6.14

Wing Tai Properties 369 HK 5.16 15.0 13.6 -57% -61% 5.61 5.10 5.61 5.10 5.38 5.16

Property inv estors

Great Eagle 41 HK 31.35 13.1 11.0 -45% -54% 35.75 30.10 35.75 30.10 35.75 31.35

HK Land^ HKL SP 7.08 21.4 19.0 -16% -26% 7.73 6.84 7.63 7.08 7.47 7.08

Hysan Dev 14 HK 35.30 23.1 20.3 -28% -37% 40.20 35.30 39.35 35.30 39.35 35.30

Swire Properties 1972 HK 25.50 28.0 24.5 -13% -23% 29.10 25.50 28.00 25.50 27.70 25.50

Wharf 4 HK 69.90 20.1 15.5 1% -22% 78.40 60.45 78.40 66.50 78.40 69.25

Sector Av erage - Dev elopers 14.8 13.1 -27% -35%Sector Av erage - Inv estors 21.2 18.1 -11% -26%Heng Seng Index 11.5 10.5

-- Last 3 month -- - - Last 3 month -- - - Last 3 month -- - - Last 1 month --- - Last 2 month - -

^ Denominated in USD for price

Source: Thomson Reuters; DBS Vickers Trading range comparison – REITs

Last Price

Div y ield at

High Price

Div y ield at

Low Price

P/BV at High Price

P/BV at Low Price

High Price

Low Price

High Price

Low Price

High Price

Low Price

HK$ % % x x HK$ HK$ HK$ HK$ HK$ HK$

REIT s

Champion REIT 2778 HK 3.92 4.7 5.0 0.54 0.50 4.19 3.92 4.19 3.92 4.19 3.92Fortune REIT 778 HK 7.71 4.4 5.6 0.97 0.77 8.58 6.77 8.58 6.89 8.58 7.30

Yuexiu REIT 405 HK 4.69 5.9 7.0 0.88 0.73 4.88 4.08 4.88 4.23 4.88 4.35Hui Xian REIT@ 87001 HK 4.25 5.9 6.4 0.78 0.73 4.30 4.00 4.30 4.00 4.30 4.04

The Link REIT 823 HK 41.40 3.4 3.8 1.50 1.34 46.30 41.30 46.30 41.40 46.30 41.40Prosperity REIT 808 HK 2.86 4.7 5.8 0.73 0.59 3.09 2.50 3.09 2.50 3.09 2.76

Regal REIT 1881 HK 2.57 6.3 7.7 0.56 0.45 2.73 2.21 2.73 2.41 2.73 2.56Sunlight REIT 435 HK 3.61 4.7 5.5 0.63 0.53 3.90 3.30 3.90 3.30 3.90 3.40

Sector Av erage - REITs 5.0 5.9 0.82 0.71Heng Seng Index 3.5 3.8

- - Last 3 month - -- - Last 2 month - -- - Last 1 month - -- - Last 3 month - - - - Last 3 month - -

@ denominated in RMB Source: Thomson Reuters; DBS Vickers



HK Property

Share price movement comparison (%)

1-week 2-week 1-mth 2-mth 3-mth 6-mth 1-y r 2010 2011 2012 YTD

Cheung Kong (6.0) (3.5) (4.3) (2.7) (7.5) (5.8) 18.2 19.5 (22.9) 28.8 (6.3)

Hang Lung Props (6.1) (5.8) (6.5) (1.6) (5.0) 1.4 11.7 18.8 (39.2) 39.4 (7.3)

Henderson Land (2.3) 0.2 0.9 5.7 4.1 1.5 41.1 (9.2) (27.2) 41.7 2.7

K Wah Int'l (3.3) (4.7) (3.3) (6.9) (8.8) 6.6 29.3 0.7 (32.3) 89.3 8.8

Kerry Props (3.2) (4.4) (6.5) (4.6) (17.7) (17.0) 5.0 2.5 (36.5) 56.6 (18.4)

MTRC (2.9) 0.2 (0.8) 1.9 (1.7) 1.9 24.1 5.6 (11.1) 21.3 3.1

New World Dev (5.7) (5.0) (4.2) (2.1) (9.9) 4.9 49.2 (8.5) (52.7) 92.0 7.0

Sino Land (4.0) (1.5) (6.1) (9.0) (15.0) (13.3) 10.1 (3.7) (16.3) 26.0 (14.1)

SHKP (5.5) (3.6) (6.0) 1.1 (11.8) (7.3) 18.9 11.0 (24.6) 19.4 (9.0)

Tai Cheung (0.2) (1.1) 4.1 3.1 (0.9) 2.4 23.8 31.0 (19.8) 33.7 0.6

Wing Tai Props (1.3) (3.6) (1.3) (8.0) (6.7) 10.0 26.8 18.7 (14.3) 106.1 2.2

Great Eagle (9.9) (6.1) (2.8) (1.3) 1.8 26.4 58.5 19.6 (36.9) 68.6 22.0

HK Land (2.5) (3.3) (3.3) (4.5) (8.4) 8.3 21.6 45.9 (37.1) 54.0 1.3

Hysan Dev (4.2) (7.3) (7.7) (9.9) (11.5) (5.2) 11.0 66.0 (30.3) 46.1 (5.2)

Swire Props (5.2) (2.5) (6.3) (7.4) (12.1) (1.7) 19.4 n.a. n.a. n.a. (1.4)

Wharf (10.8) (7.4) (0.1) 1.0 3.1 19.1 66.2 33.6 (39.5) 72.6 15.3

Champion REIT (5.5) (6.2) (2.7) (2.7) (1.0) (0.8) 24.1 39.1 (36.4) 27.1 5.7

Fortune REIT (6.9) (9.5) 4.3 11.6 13.2 14.1 74.4 27.8^ (5.5) 68.6 20.7

Yuexiu REIT 0.9 (3.9) 7.8 6.3 14.7 25.7 27.4 47.6 (21.0) 7.3 27.4

Hui Xian REIT 0.0 0.2 5.2 4.2 2.4 2.7 13.9 n.a. n.a. 16.6 2.4

Link REIT (5.6) (10.6) (5.0) (2.1) (0.1) (1.7) 38.2 21.8 18.4 35.3 7.0

Prosperity REIT (3.1) (3.7) 2.9 6.3 7.5 19.2 67.3 32.3 (14.8) 56.7 21.7

Regal REIT (1.9) (2.3) 0.4 3.6 15.8 12.7 49.4 35.2 (19.7) 24.0 15.8

Sunlight REIT (4.5) (4.7) 5.6 6.2 1.1 1.7 46.2 24.5 (7.1) 48.6 9.4

HSI Index (3.0) (2.1) (0.1) 1.1 (2.0) 2.9 18.4 5.3 (20.0) 22.9 (0.5)

HSP Index (5.6) (3.2) (3.5) 0.9 (5.4) 0.4 29.6 6.5 (23.9) 37.6 (1.7) ^ 2010 performance of Singapore listed stock (FRT SP)

Source: Thomson Reuters



HK Property

Residential

What were the transaction trends in primary and secondary markets?

Primary market transaction volume

Primary market transaction value

0

500

1,000

1,500

2,000

2,500

3,000

Jan

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Ap

r-09

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09O

ct-0

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-13

Ap

r-13

No of unitsApr-13

-22.3% m-o-m-0.1% y-o-y

4M13

0.9% y-o-y

0

5,000

10,000

15,000

20,000

25,000

Jan

-09

Ap

r-09

Jul-

09O

ct-0

9Ja

n-1

0A

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10Ju

l-10

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-10

Jan

-11

Ap

r-11

Jul-

11O

ct-1

1Ja

n-1

2A

pr-

12Ju

l-12

Oct

-12

Jan

-13

Ap

r-13

HK$m Apr-13

-25.1% m-o-m-44.9% y-o-y

4M13-29.8% y-o-y

Source: Centaline Property Agency Source: Centaline Property Agency

Secondary market transaction volume

Secondary market transaction value

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Jan

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Ap

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1Ja

n-1

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12Ju

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Jan

-13

Ap

r-13

No of unitsApr-13

-31.9% m-o-m-68% y-o-y

4M13

-32% y-o-y

05,000

10,00015,00020,00025,000

30,00035,00040,00045,00050,000

Jan

-09

Ap

r-09

Jul-

09O

ct-0

9Ja

n-1

0A

pr-

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l-10

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Ap

r-11

Jul-

11O

ct-1

1Ja

n-1

2A

pr-

12Ju

l-12

Oct

-12

Jan

-13

Ap

r-13

HK$m Apr-13

-37.7% m-o-m-66.2% y-o-y

4M13

-21.9% y-o-y




HK Property

Confirmor – Overall

Confirmor – Over HK$7m

0200400600800

1,0001,2001,4001,6001,800

Jul-

95Ju

l-96

Jul-

97Ju

l-98

Jul-

99Ju

l-00

Jul-

01Ju

l-02

Jul-

03Ju

l-04

Jul-

05Ju

l-06

Jul-

07Ju

l-08

Jul-

09Ju

l-10

Jul-

11Ju

l-12

0%1%2%3%4%5%6%7%8%9%10%

No. of cases of confirmor (LHS)

As a % of total secondary registrations (RHS)

Apr-13 2, 0.09%Mar-13 2, 0.06%

0

50

100

150

200

250

300

350

Jul-

95Ju

l-96

Jul-

97Ju

l-98

Jul-

99Ju

l-00

Jul-

01Ju

l-02

Jul-

03Ju

l-04

Jul-

05Ju

l-06

Jul-

07Ju

l-08

Jul-

09Ju

l-10

Jul-

11Ju

l-12

0%

5%

10%

15%

20%

25%

30%

No. of cases of confirmor (LHS)

As a % of over $7m secondary registrations (RHS)

Apr-13 0, 0%

Mar-13 2, 0.35%


Centa-City leading index (Secondary market price index)

Residential rents

50

60

70

80

90

100

110

120

130

Jan

-08

Ap

r-08

Jul-

08O

ct-0

8Ja

n-0

9A

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Jan

-10

Ap

r-10

Jul-

10O

ct-1

0Ja

n-1

1A

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11Ju

l-11

Oct

-11

Jan

-12

Ap

r-12

Jul-

12O

ct-1

2Ja

n-1

3A

pr-

13

(10)(8)(6)(4)(2)02468

Mom growth (RHS) CCL Index (LHS)

%Apr-13

-3.4% m-o-m2.6% ytd

5

10

15

20

25

30

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

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Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Hong Kong KowloonNew Territories East New Territories WestOverall

HK$psf Apr-13

Overall: -1.7% m-o-m




HK Property

What are the factors affecting residential demand and supply?

Real GDP growth

Unemployment rate

(10)

(8)

(6)

(4)

(2)

0

2

4

6

8

10

1Q05

3Q05

1Q06

3Q06

1Q07

3Q07

1Q08

3Q08

1Q09

3Q09

1Q10

3Q10

1Q11

3Q11

1Q12

3Q12

1Q13

%1Q13: 2.8% y-o-y

3

4

5

6

7

8

9

Jan-

01Ju

l-01

Jan-

02Ju

l-02

Jan-

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l-03

Jan-

04Ju

l-04

Jan-

05Ju

l-05

Jan-

06Ju

l-06

Jan-

07Ju

l-07

Jan-

08Ju

l-08

Jan-

09Ju

l-09

Jan-

10Ju

l-10

Jan-

11Ju

l-11

Jan-

12Ju

l-12

Jan-

13

%

Feb-13 -Apr-13: 3.5%

Min: Jul-11 - Sep-11 3.2%

Dec-12 -Mar-13: 3.5%

Source: CEIC Source: CEIC

3-mth HIBOR vs Prime rate

Effective mortgage rate

0.01.02.03.04.05.06.07.08.09.0

Jan

-07

Jul-

07

Jan

-08

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Jan

-09

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Jan

-11

Jul-

11

Jan

-12

Jul-

12

Jan

-13

3-mth HIBOR HK Prime rate

% Apr-13

3-mth HIBOR: 0.38%Prime rate: 5%

0

2

4

6

8

10

12

Jan-

96Ja

n-97

Jan-

98Ja

n-99

Jan-

00Ja

n-01

Jan-

02Ja

n-03

Jan-

04Ja

n-05

Jan-

06Ja

n-07

Jan-

08Ja

n-09

Jan-

10Ja

n-11

Jan-

12Ja

n-13

%Apr-13: 2.17%

Mar-13: 2.12%

Source: CEIC Source: CEIC, DBS Vickers



HK Property

Housing affordability – private households

Rental yields (mass market projects)

0%

20%

40%

60%

80%

100%

120%

Jan

-94

Jan

-95

Jan

-96

Jan

-97

Jan

-98

Jan

-99

Jan

-00

Jan

-01

Jan

-02

Jan

-03

Jan

-04

Jan

-05

Jan

-06

Jan

-07

Jan

-08

Jan

-09

Jan

-10

Jan

-11

Jan

-12

Jan

-13

Prime base HIBOR base

Prime base HIBOR base

Apr-13

Mar-13 51.5%

49.8%

50.2%

49.1%

3%

4%

5%

6%

7%

Jul-9

5Ju

l-96

Jul-9

7Ju

l-98

Jul-9

9Ju

l-00

Jul-0

1Ju

l-02

Jul-0

3Ju

l-04

Jul-0

5Ju

l-06

Jul-0

7Ju

l-08

Jul-0

9Ju

l-10

Jul-1

1Ju

l-12

Apr-133.70%


Yield spread

Housing supply

(10)

(8)

(6)

(4)

(2)

0

2

4

6

Jul-9

5Ju

l-96

Jul-9

7Ju

l-98

Jul-9

9Ju

l-00

Jul-0

1Ju

l-02

Jul-0

3Ju

l-04

Jul-0

5Ju

l-06

Jul-0

7Ju

l-08

Jul-0

9Ju

l-10

Jul-1

1Ju

l-12

%

Apr-13 1.53%

Jun-03

Max:

3.59%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

F20

14F

2015

F

Completions No of primary units sold

Unit

Source: CEIC, Centaline Property Agency, DBS Vickers Source: DBS Vickers



HK Property

What projects were launched?

Project launches (May 2013)

Project Location Developer Total Units Unitssold

% sold ASP(HK$psf)

Dunbar Place Ho Man Tin Swire Properties 53 17 32% 21,750

Note: ASPs are based on saleable area. Source: DBS Vickers

Occupation permits issued (Mar 2013)

Projects Location Location Developers No of units

28 Barker Road The Peak HK Hutchison Whampoa 717 Peony Road Kowloon Tong Kln Private developer 1

Source: Building Department



HK Property

Where are the upcoming projects?

Pre-sale consent granted (Apr 2013) Project Developers Location Location No. of unitNil

Source: Lands Department

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

13,494

Source: Lands Department



HK Property

How about the office market?

Office rentals

Office capital values

0

50

100

150

200

250

Au

g-0

7

Dec

-07

Ap

r-08

Au

g-0

8

Dec

-08

Ap

r-09

Au

g-0

9

Dec

-09

Ap

r-10

Au

g-1

0

Dec

-10

Ap

r-11

Au

g-1

1

Dec

-11

Ap

r-12

Au

g-1

2

Dec

-12

Ap

r-13

Premium Central Traditional Central

HK$psf/mth Premium Central

Apr-13: 2.5% m-o-m

8,000

12,000

16,000

20,000

24,000

28,000

Au

g-0

7D

ec-0

7

Ap

r-08

Au

g-0

8D

ec-0

8

Ap

r-09

Au

g-0

9D

ec-0

9A

pr-

10

Au

g-1

0D

ec-1

0A

pr-

11A

ug

-11

Dec

-11

Ap

r-12

Au

g-1

2

Dec

-12

Ap

r-13

Traditional Central

HK$psf Apr-13Traditional

CentralHK$26,958psf, -1.9% m-o-m

Source: Knight Frank Source: Knight Frank

Office vacancy

Expectations to hire

4.7

3.8

1.62.2

3.8

4.5

3.8

1.51.9

3.6

4.9 5.1

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Cen

tral

Wan

chai

/C

ause

way

Bay

HK

Eas

t

Tsim

shat

sui

Ko

wlo

on

East

Ove

rall

Apr-13 Mar-13%

0

10

20

30

40

50

60

70

80

4Q01

2Q02

4Q02

2Q03

4Q03

2Q04

4Q04

2Q05

4Q05

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

%2Q13

47.4%1Q1337%

Source: Jones Lang LaSalle Source: Hudson Global Resources (HK)



HK Property

How about the retail market?

Private retail rent index

Private retail price index

80

90

100

110

120

130

140

150

160

Jan

-93

Jan

-94

Jan

-95

Jan

-96

Jan

-97

Jan

-98

Jan

-99

Jan

-00

Jan

-01

Jan

-02

Jan

-03

Jan

-04

Jan

-05

Jan

-06

Jan

-07

Jan

-08

Jan

-09

Jan

-10

Jan

-11

Jan

-12

Jan

-13

Rental Index (1999=100)

Mar-130.1% m-o-m10.6% y-o-y

50

100

150

200

250

300

350

400

450

500

Jan

-93

Jan

-94

Jan

-95

Jan

-96

Jan

-97

Jan

-98

Jan

-99

Jan

-00

Jan

-01

Jan

-02

Jan

-03

Jan

-04

Jan

-05

Jan

-06

Jan

-07

Jan

-08

Jan

-09

Jan

-10

Jan

-11

Jan

-12

Jan

-13

Price Index (1999=100)

Mar-13-0.8% m-o-m

31% y-o-y

Source: Rating and Valuation Department Source: Rating and Valuation Department

Overall retail sales growth

Monthly retail sales growth of jewelleries/watches

(20)

(10)

0

10

20

30

40

Jan

-08

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

Jan

-13

Yoy, %9.8 % y-o-y13.9 % y-o-y

Mar-13: 3M13:

(20)

(10)

0

10

20

30

40

50

60

70

Jan

-08

Au

g-0

8

Mar

-09

Sep

-09

Ap

r-10

Oct

-10

May

-11

No

v-11

May

-12

No

v-12

Yoy, %11.2% y-o-y17.6% y-o-y

Mar-13:3M13:




HK Property

Monthly retail sales growth of consumer durable goods

Monthly retail sales growth of supermarket items

(30)

(20)

(10)

0

10

20

30

40

50

60

Jan

-08

Au

g-0

8

Mar

-09

Sep

-09

Ap

r-10

Oct

-10

May

-11

No

v-11

May

-12

No

v-12

Yoy, %15.3% y-o-y29.1% y-o-y

Mar-13:3M13:

(5)

0

5

10

15

20

25

30

Jan

-08

Au

g-0

8

Mar

-09

Sep

-09

Ap

r-10

Oct

-10

May

-11

No

v-11

May

-12

No

v-12

Yoy, %5.3% y-o-y7.7% y-o-y

Mar-13:3M13:


Visitor arrivals growth – overall

Visitor arrivals growth – China

(20)

(10)

0

10

20

30

40

50

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Yoy, % Apr-13: 11.5% y-o-y13% y-o-y4M13:

(20)

(10)

0

10

20

30

40

50

60

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Yoy, %

Apr-13: 17.5% y-o-y19.6% y-o-y4M13:




HK Property

What did corporates do?

Major corporate actions

Dat e Ev en t

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.

Source: DBS Vickers



HK Property

Stake change by major shareholders Company Dat e No o f shares A v g p ric e A mount

(HK $ ) (HK $m)G reat Eag leLo Ka Shui 02-May -13 232,000 n.a. n.a.Lo Ka Shui 02-May -13 912,000 n.a. n.a.Lo Ka Shui 30-Apr-13 468,000 n.a. n.a.

Henderson L andLee Shau Kee 23-May -13 2,603,000 56.7 147.6Lee Shau Kee 22-May -13 292,000 57.3 16.7Lee Shau Kee 21-May -13 838,000 57.5 48.2Lee Shau Kee 20-May -13 571,000 57.1 32.6Lee Shau Kee 16-May -13 1,080,000 56.1 60.6Lee Shau Kee 15-May -13 1,828,000 56.1 102.6Lee Shau Kee 14-May -13 2,129,000 56.6 120.5Lee Shau Kee 13-May -13 1,700,000 57.0 96.9Lee Shau Kee 10-May -13 1,074,000 57.4 61.7Lee Shau Kee 09-May -13 1,175,000 57.2 67.2Lee Shau Kee 08-May -13 1,038,000 57.2 59.4Lee Shau Kee 07-May -13 844,000 56.9 48.0Lee Shau Kee 06-May -13 335,000 56.7 19.0

Source: HK Exchange



HK Property

Discount to NAV – Property developers & investors

Property developers

Cheung Kong Hang Lung Properties

(50)

(40)

(30)

(20)

(10)

0

10

20

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

%

Average: -17%

+2SD: 1%

+1SD: -8%

-1SD: -26%

-2SD: -35%

(60)(50)(40)(30)(20)(10)

010203040

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

%

Average: -10%

+2SD: 22%

+1SD: 6%

-1SD: -26%

-2SD: -41%

Henderson Land K Wah International

(70)(60)(50)(40)(30)(20)(10)

0102030

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

%

Average: -22%

+2SD: 13%

+1SD: -4%

-1SD: -39%

-2SD: -56%

(85)(80)(75)(70)(65)(60)(55)(50)(45)(40)(35)

Sep-

09

Dec

-09

Mar

-10

Jun-

10

Sep-

10

Dec

-10

Mar

-11

Jun-

11

Sep-

11

Dec

-11

Mar

-12

Jun-

12

Sep-

12

Dec

-12

Mar

-13

%

Average: -59%

+2SD: -43%

+1SD: -51%

-1SD: -67%

-2SD: -75%

Kerry Properties MTR Corporation

(100)

(80)

(60)

(40)

(20)

0

20

40

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

%

Average: -32%

-2SD: -77%

-1SD: -54%

+1SD: -9%+2SD: 14%

(30)

(25)

(20)

(15)

(10)

(5)

0

5

May

-09

Sep-

09

Jan-

10

May

-10

Sep-

10

Jan-

11

May

-11

Sep-

11

Jan-

12

May

-12

Sep-

12

Jan-

13

May

-13

%

Average: -15%

+2SD: -4%

+1SD: -10%

-1SD: -21%

-2SD: -27%

Source: Thomson Reuters, DBS Vickers



HK Property

Property developers (continued)

New World Development Sino Land

(90)(80)(70)(60)(50)(40)(30)(20)(10)

0

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

%

Average: -47%

+2SD: -14%

+1SD: -30%

-1SD: -63%

-2SD: -79%

(80)

(60)

(40)

(20)

0

20

40

60

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

%

Average: -26%

+2SD: 17%

+1SD: -5%

-1SD: -48%

-2SD: -69%

Sun Hung Kai Properties Tai Cheung

(60)(50)(40)(30)(20)(10)

010203040

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

%

Average: -12%

+2SD: 23%

+1SD: 5%

-1SD: -30%

-2SD: -47%

(90)

(80)

(70)

(60)

(50)

(40)

(30)

(20)

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

%

Average: -59%

+2SD: -41%+1SD: -50%

-1SD: -68%

-2SD: -77%

Sector average

(60)

(50)

(40)

(30)

(20)

(10)

0

10

20

30

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

%

Average: -17%

+2SD: 9%

+1SD: -4%

-1SD: -30%

-2SD: -43%




HK Property

Property investors

Great Eagle Hongkong Land

(90)

(80)

(70)

(60)

(50)

(40)

(30)

(20)

(10)

0

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

%

+2SD: -25%

+1SD: -39%

-1SD: -66%

-2SD: -79%

Average: -52%

(70)(60)(50)

(40)(30)(20)(10)

0

102030

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

%

Average: -19%

-2SD: -53%

-1SD: -36%

+1SD: -2%

+2SD: 15%

Hysan Swire Properties

(80)

(70)

(60)

(50)

(40)

(30)

(20)

(10)

0

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

%

+2SD: -9%

+1SD: -23%

-1SD: -50%

-2SD: -63%

Average: -36%

(50)

(45)

(40)

(35)

(30)

(25)

(20)

(15)

(10)

(5)

Jan-

12

Mar

-12

May

-12

Jul-1

2

Sep-

12

Nov

-12

Jan-

13

Mar

-13

%

Average: -25%

-2SD: -40%

-1SD: -32%

+1SD: -17%

+2SD: -10%

Wharf Sector average

(70)

(60)

(50)

(40)

(30)

(20)

(10)

0

10

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

%

Average: -27%

-2SD: -51%

-1SD: -39%

+1SD: -14%

+2SD: -2%

(70)

(60)

(50)

(40)

(30)

(20)

(10)

0

10

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

%

+2SD: -2%

+1SD: -14%

Average: -26%

+2SD: -2%

-1SD: -38%




HK Property

Discount to NAV band – Property developers & investors

Property developers

Cheung Kong Hang Lung Properties

40

60

80

100

120

140

160

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

HK$

-39%

-27%

-16%

-4%

8%

0

10

20

30

40

50

60

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

HK$

-53%

-31%

-9%

13%

35%

Henderson Land K Wah International

0

20

40

60

80

100

120

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

HK$

-63%

-43%

-23%

-2%

18%

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Sep-

09

Jan-

10

May

-10

Sep-

10

Jan-

11

May

-11

Sep-

11

Jan-

12

May

-12

Sep-

12

Jan-

13

May

-13

HK$

-79%

-70%

-61%

-51%

-42%

Kerry Properties MTR Corporation

0102030405060708090

100

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

HK$

-77%

-50%

-24%

3%

30%

22242628303234363840

May

-09

Sep-

09

Jan-

10

May

-10

Sep-

10

Jan-

11

May

-11

Sep-

11

Jan-

12

May

-12

Sep-

12

Jan-

13

May

-13

HK$

-27%

-20%

-13%

-5%

2%




HK Property

Property developers (continued)

New World Development Sino Land

0

5

10

15

20

25

30

35

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

HK$

-82%

-62%-42%

-22%-2%

0

5

10

15

20

25

30

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

HK$

-73%

-45%

-17%

12%

40%

Sun Hung Kai Properties Tai Cheung

20

70

120

170

220

270

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

HK$

-55%

-34%

-12%

9%

30%

0

2

4

6

8

10

12

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

HK$

-83%

-72%

-61%

-49%

-38%




HK Property

Property investors

Great Eagle Hongkong Land

0

10

20

30

40

50

60

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

HK$

-82%

-67%

-53%

-39%

-25%

0

2

4

6

8

10

12

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

HK$

-62%

-42%

-23%

-3%

17%

Hysan Swire Properties

3

13

23

33

43

53

63

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

HK$

-69%

-54%

-38%

-23%

-8%

15

17

19

21

23

25

27

29

31

Jan-

12

Mar

-12

May

-12

Jul-1

2

Sep-

12

Nov

-12

Jan-

13

Mar

-13

HK$

-43%

-36%

-28%

-21%

-13%

Wharf

0

10

20

30

40

50

60

70

80

90

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

HK$

-66%

-48%

-31%

-13%

4%




HK Property

Price to book NAV band - REITs

REITs

Champion REIT Fortune REIT

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

May

-06

No

v-06

May

-07

No

v-07

May

-08

No

v-08

May

-09

No

v-09

May

-10

No

v-10

May

-11

No

v-11

May

-12

No

v-12

May

-13

HK$

0.2x

0.4x

0.5x

0.7x

0.9x

0

2

4

6

8

10

12

Au

g-0

3Fe

b-0

4A

ug

-04

Feb

-05

Au

g-0

5Fe

b-0

6A

ug

-06

Feb

-07

Au

g-0

7Fe

b-0

8A

ug

-08

Feb

-09

Au

g-0

9Fe

b-1

0A

ug

-10

Feb

-11

Au

g-1

1Fe

b-1

2A

ug

-12

Feb

-13

HK$

0.2x

0.4x

0.7x

1.0x

1.3x

Link REIT Prosperity REIT

05

1015

202530

3540

4550

No

v-05

No

v-06

No

v-07

No

v-08

No

v-09

No

v-10

No

v-11

No

v-12

HK$

0.8x

1.1x

1.3x

1.5x

1.7x

0.00.5

1.01.52.02.5

3.03.54.0

4.55.0

Dec

-05

Dec

-06

Dec

-07

Dec

-08

Dec

-09

Dec

-10

Dec

-11

Dec

-12

HK$

0.2x

0.5x

0.7x

0.9x

1.1x

Sunlight REIT

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Dec

-06

Jun

-07

Dec

-07

Jun

-08

Dec

-08

Jun

-09

Dec

-09

Jun

-10

Dec

-10

Jun

-11

Dec

-11

Jun

-12

Dec

-12

HK$

0.3x

0.4x

0.6x

0.8x

0.9x




HK Property

Historical yield band - REITs

REITs

Champion REIT Fortune REIT

0

1

2

3

4

5

6

7

8

May

-06

No

v-06

May

-07

No

v-07

May

-08

No

v-08

May

-09

No

v-09

May

-10

No

v-10

May

-11

No

v-11

May

-12

No

v-12

May

-13

HK$

Champion REIT

Ceiling 5%

Mid 15%

Floor 24%

0

12

34

5

67

89

10

Au

g-0

3Fe

b-0

4A

ug

-04

Feb

-05

Au

g-0

5Fe

b-0

6A

ug

-06

Feb

-07

Au

g-0

7Fe

b-0

8A

ug

-08

Feb

-09

Au

g-0

9Fe

b-1

0A

ug

-10

Feb

-11

Au

g-1

1Fe

b-1

2A

ug

-12

Feb

-13

HK$

Fortune REIT

Ceiling 4%

Mid 13%

Floor 22%

Link REIT Prosperity REIT

5

10

15

20

25

30

35

40

45

50

No

v-05

Ap

r-06

Sep

-06

Feb

-07

Jul-

07D

ec-0

7M

ay-0

8O

ct-0

8M

ar-0

9A

ug

-09

Jan

-10

Jun

-10

No

v-10

Ap

r-11

Sep

-11

Feb

-12

Jul-

12D

ec-1

2M

ay-1

3

HK$

Link REITCeiling 3%

Mid 5%

Floor 7%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Jan

-06

Jan

-07

Jan

-08

Jan

-09

Jan

-10

Jan

-11

Jan

-12

Jan

-13

HK$

Prosperity REIT

Ceiling 5%

Mid 11%

Floor 17%

Sunlight REIT

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Dec

-06

Jun

-07

Dec

-07

Jun

-08

Dec

-08

Jun

-09

Dec

-09

Jun

-10

Dec

-10

Jun

-11

Dec

-11

Jun

-12

Dec

-12

HK$

Sunlight REIT

Ceiling 4%

Mid 14%

Floor 25%




HK Property

Any important dates to look out for?

Major upcoming events

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



HK Property

Our past publications

Date Publicat ion

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

May 2013

A pril 2013

March 2013

Source: DBS Vickers



HK Property

DBSV recommendations are based an Absolute Total Return* Rating system, defined as follows:

STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)

BUY (>15% total return over the next 12 months for small caps, >10% for large caps)

HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps)

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)

Share price appreciation + dividends DBS Vickers Research is available on the following electronic platforms: DBS Vickers (www.dbsvresearch.com); Thomson (www.thomson.com/financial); Factset (www.factset.com); Reuters (www.rbr.reuters.com); Capital IQ (www.capitaliq.com) and Bloomberg (DBSR GO). For access, please contact your DBSV salesperson. GENERAL DISCLOSURE/DISCLAIMER This report is prepared by DBS Vickers (Hong Kong) Limited (“DBSVHK”), a direct wholly-owned subsidiary of DBS Vickers Securities Holdings Pte Ltd ("DBSVH"). This report is intended for clients of DBSV Group only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVR. It is being distributed in the United States by DBSV US, which accepts responsibility for its contents. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBS Vickers Securities (USA) Inc (“DBSVUSA”) directly and not its affiliate. The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBSVHK and/or DBSVH) do not make any representation or warranty as to its accuracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. DBSVHK accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. DBSVH is a wholly-owned subsidiary of DBS Bank Ltd. DBS Bank Ltd along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. DBSVHK, DBS Bank Ltd and their associates, their directors, and/or employees may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies. Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the company (or companies) referred to in this report. The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by DBSVHK and/or DBSVH (and/or any persons associated with the aforesaid entities), that:

a. such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and

b. there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments stated therein.

Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report. DBS Vickers Securities (USA) Inc ("DBSVUSA")"), a U.S.-registered broker-dealer, does not have its own investment banking or research department, nor has it participated in any investment banking transaction as a manager or co-manager in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.

ANALYST CERTIFICATION The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of the date the report is published, the analyst and his / her spouse and/or relatives and/or associate who are financially dependent on the analyst, do not hold interests in the securities recommended in this report (“interest” includes direct or indirect ownership of securities, directorships and trustee positions).



HK Property

COMPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBSVHK and its subsidiaries do not have a proprietary position in the securities recommended in this report as of the date the

report is published.

2. DBSVHK, DBSVUSA, DBS Bank Ltd and/or other affiliates beneficially own a total of 1% or more of any class of common equity

securities of Fortune REIT (778 HK) and Yuexiu Real Estate Investment Trust (405 HK) mentioned in this document as of the latest available date of the updated information.

3. Compensation for investment banking services: DBSVHK, DBSVUSA, DBS Bank Ltd and/or other affiliates have received compensation, within the past 12 months, and within the next 3 months may receive or intends to seek compensation for investment banking services from Cheung Kong Holdings Ltd (1 HK), Sino Land Co Ltd (83 HK) and Wing Tai Properties Ltd (369 HK) mentioned in this document. DBSVUSA does not have its own investment banking or research department, nor has it participated in any investment banking transaction as a manager or co-manager in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.

RESTRICTIONS ON DISTRIBUTION

General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

Australia

This report is being distributed in Australia by DBSVR and DBSVS, which are exempted from the requirement to hold an Australian financial services licence under the Corporation Act 2001 [“CA”] in respect of financial services provided to the recipients. DBSVR and DBSVS are regulated by the Monetary Authority of Singapore [“MAS”] under the laws of Singapore, which differ from Australian laws. Distribution of this report is intended only for “wholesale investors” within the meaning of the CA..

Hong Kong This report is being distributed in Hong Kong by DBS Vickers (Hong Kong) Limited which is licensed and regulated by the Hong Kong Securities and Futures Commission.

Singapore

This report is being distributed in Singapore by DBSVR, which holds a Financial Adviser’s licence and is regulated by the MAS. This report may additionally be distributed in Singapore by DBSVS (Company Regn. No. 198600294G), which is an Exempt Financial Adviser as defined under the Financial Advisers Act. Any research report produced by a foreign DBS Vickers entity, analyst or affiliate is distributed in Singapore only to “Institutional Investors”, “Expert Investors” or “Accredited Investors” as defined in the Securities and Futures Act, Chap. 289 of Singapore. Any distribution of research reports published by a foreign-related corporation of DBSVR/DBSVS to “Accredited Investors” is provided pursuant to the approval by MAS of research distribution arrangements under Paragraph 11 of the First Schedule to the FAA.

United Kingdom

This report is being distributed in the UK by DBS Vickers Securities (UK) Ltd, who is an authorised person in the meaning of the Financial Services and Markets Act and is regulated by The Financial Services Authority. Research distributed in the UK is intended only for institutional clients.

Dubai/ United Arab

Emirates

This report is being distributed in Dubai/United Arab Emirates by DBS Bank Ltd, Dubai (PO Box 506538, 3rd Floor, Building 3, Gate Precinct, DIFC, Dubai, United Arab Emirates) and is intended only for clients who meet the DFSA regulatory criteria to be a Professional Client. It should not be relied upon by or distributed to Retail Clients. DBS Bank Ltd, Dubai is regulated by the Dubai Financial Services Authority.

United States Neither this report nor any copy hereof may be taken or distributed into the United States or to any U.S. person except in compliance with any applicable U.S. laws and regulations.

Other jurisdictions

In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.

DBS Vickers (Hong Kong) Limited

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Tel: (852) 2820-4888, Fax: (852) 2868-1523


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