hk property monthly -...

Deutsche Bank Markets Research

Asia

Hong Kong

Property

Industry

HK Property Monthly

Date

7 December 2015

Industry Update

Secondary volume hit an all-time low in Nov; ASP softened

Developers accelerated the pace of launches; undercut secondary market

________________________________________________________________________________________________________________

Deutsche Bank AG/Hong Kong

Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI (P) 124/04/2015.

Tony Tsang

Research Analyst

(+852) 2203 6256

[email protected]

Jason Ching, CFA

Research Analyst

(+852) 2203 6205

[email protected]

Top picks

CK Property (1113.HK),HKD52.35 Buy

Sino Land Co (0083.HK),HKD11.70 Buy

New World Dev (0017.HK),HKD7.84 Buy

MTR Corp (0066.HK),HKD36.45 Buy

Hang Lung Properties (0101.HK),HKD18.54

Buy

Source: Deutsche Bank

Companies Featured

CK Property (1113.HK),HKD52.35 Buy

Sino Land Co (0083.HK),HKD11.70 Buy

New World Dev (0017.HK),HKD7.84 Buy

MTR Corp (0066.HK),HKD36.45 Buy

Hang Lung Properties (0101.HK),HKD18.54

Buy

Henderson Land Dev. Co. (0012.HK),HKD48.05

Buy

Hongkong Land Holdings Ltd (HKLD.SI),USD7.23

Hold

Hysan Development (0014.HK),HKD32.70 Sell

Great Eagle Hldgs (0041.HK),HKD25.40 Sell

Source: Deutsche Bank

In general, volume in the secondary market continued to be sluggish in Nov on the back of multiple project launches in the primary market. Specifically, secondary volume reached an all-time low of just 1,854, down a further 8% MoM from the previous low of 2,007 recorded in Oct. As of Dec 3, secondary volume amounted to just 39,121 YTD, implying a 21% drop as compared with 2014. Meanwhile, the residential price index compiled by the Rating and Valuation Department posted a MoM drop of 1.11% in Oct (first decline in 19 months from a historic high in Sept). This is in line with the softening trend in CCL Index, which together reaffirm the turning point of HK residential market.

Developers accelerated launches with more attractive pricing/payment options A total of 2,441 units have been launched over six new primary projects in Nov, including CK Prop’s Yuccie Square in Yuen Long (798 units), Kerry’s Bloomsway in Tuen Mun (591 units), Wheelock’s CAPRI in Tseung Kwan O (420 units), SHKP’s Park Vista 1A in Yuen Long (269 units) and King’s Hill in Sai Ying Pun (79 units), Kowloon Development’s South Coast in Aberdeen (150 units), and Henderson’s The Zutten in Ma Tau Kok (134 units). Most of these new units were launched at or below the market prices nearby, coupled with attractive payment options such as vendor financing plans for up to 95% LTV. Overall, such incentives have received positive market responses. In particular, the Yuccie Square project, which was priced below-market at HK$12,256psf with up to 80% LTV mortgage plans, has impressively received some 10,000 subscriptions of interests on its first launch; the project has so far recorded sales of 608 units (or 76% of total units launched). The strong primary market has further hit the secondary side, as a majority of secondary sellers still refused to take sufficient price cuts in order to compete for buyers. As a reference, the primary market’s share to total volume has reached a new 10-year high of 28% YTD (25% in 2014).

More retailers scaled down operations amid weak market sentiment In Oct, retail sale value fell 3% YoY to HK$37.2bn, of which sales of jewellery and watches registered a further YoY drop of 17% (HK$6.1bn). During the period, total visitor arrivals fell 3% YoY to 5.07m, with Chinese visitors arriving via IVS recording another marked YoY decline of 15% (2.2m). Overall, the outlook on retail remained dim as the softness of inbound tourism continued to be a drag. On the weak backdrop, in addition to numerous rental cuts, lately multiple retailers have announced to scale down their operations in HK, including Chow Tai Fook (jewellery), Broadway Circuits (cinema) and Burger King (fast food chain). Nevertheless, the investment market has also turned less active, with 11M15 retail property sales volume falling 29% YoY to 1,838.

We prefer names with strong defensive quality for Hong Kong properties Our top picks are CK Prop (for its relatively low land cost), Sino Land (for high net cash position and high dividend yields supported by recurrent income), and MTRC and Hang Lung Prop (for their defensive portfolios), as we believe their current share prices already factor in a residential price decline of 30%. We also like NWD for its attractive valuation and improving management track record. We remain concerned about the outlook for HK retail and hotel markets, and retain Sell on Hysan and Great Eagle. Our TPs are based on NAV discounts. Key risks: unexpected economic and political volatility.

7 December 2015

Property

HK Property Monthly


Table of contents

Secondary volume hit an all-time low in Nov; ASP softened ............................................................................... 3

HK residential property market update ............................. 11

HK commercial property market update ........................... 19

HK macro update .............................................................. 22

Taking a look at valuations ................................................ 25

7 December 2015

Property

HK Property Monthly


Secondary volume hit an all-time low in Nov; ASP softened

Developers accelerated the pace of launches; undercut secondary market

In general, volume in the secondary market continued to be sluggish in Nov on

the back of multiple project launches in the primary market. Specifically,

secondary volume reached an all-time low of just 1,854, down a further 8%

MoM from the previous low of 2,007 recorded in Oct. As of Dec 3, secondary

volume amounted to just 39,121 YTD, implying a 21% drop as compared with

2014. Meanwhile, the residential price index compiled by the Rating and

Valuation Department posted a MoM drop of 1.11% in Oct (first decline in

19 months from a historic high in Sept). This is in line with the softening trend

in CCL Index, which together reaffirm the turning point of HK residential

market.

Figure 1: Weekend primary sales volume

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Nov-01 Nov-03 Nov-05 Nov-07 Nov-09 Nov-11 Nov-13 Nov-15

Units

Total weekend primary sales Historical Average Source: Sing Tao, HKET, Deutsche Bank

7 December 2015

Property

HK Property Monthly


Hong Kong property stocks down 2.84% MoM in November, mildly outperforming HSI by 80bp

The Hang Seng Properties Index (HSP) lost 2.84% MoM to 29,843 during

November. As compared with the Hang Seng Index (HSI), which registered a

MoM drop of 3.64% in the month, HSP slightly outperformed by 80bp. During

November, the top-performing stock was Chinese Estates (+18.22% MoM),

followed by MTRC (+2.27% MoM) and Link REIT (+1.51% MoM). On the other

hand, the bottom performer of the month was SHKP (-8.28% MoM), followed

by Wheelock (-7.59% MoM) and CK Property (-7.25% MoM).

Figure 2: One-month share price performance of HK developers/landlords

18.22%

2.27%

1.51%

-0.30%

-1.57%

-2.14%

-2.54%

-2.73%

-2.80%

-3.64%

-3.83%

-3.99%

-4.19%

-4.33%

-4.52%

-4.93%

-5.00%

-5.33%

-7.10%

-7.25%

-7.59%

-8.28%

Chinese Estates

MTRC

Link REIT

K. Wah Int'l

Wing Tai Properties

Hopewell

Great Eagle

Average

Langham Hospitality Investments

Swire Properties

Henderson Land

Wharf

Shun Tak

Sino Land

Hang Lung

Hysan Dev

Kerry Properties

Hongkong Land

New World Dev

CK Property

Wheelock

SHKP

Source: Bloomberg Finance LP, Deutsche Bank. As of 30 November, 2015.

7 December 2015

Property

HK Property Monthly


Figure 3: Three-month share price performance for HK developers/landlords

18.22%

14.72%

4.97%

4.20%

3.78%

3.77%

3.32%

2.75%

1.71%

0.20%

0.00%

-0.17%

-1.57%

-2.03%

-2.95%

-4.29%

-4.69%

-5.06%

-5.82%

-6.91%

-7.02%

-12.65%

Chinese Estates

Link REIT

Hysan Dev

MTRC

Hopewell

Hang Lung

Great Eagle

Hongkong Land

Wharf

Average

Henderson Land

Sino Land

Wing Tai Properties

New World Dev

SHKP

K. Wah Int'l

Wheelock

Swire Properties

Kerry Properties

CK Property


Shun Tak


Figure 4: Six-month share price performance for HK developers/landlords

4.78%

2.80%

-3.10%

-7.49%

-9.41%

-13.40%

-14.77%

-15.02%

-16.03%

-16.25%

-16.66%

-16.82%

-17.42%

-17.51%

-19.86%

-25.34%

-25.88%

-27.47%

-29.03%

-32.46%

-33.62%

Link REIT

Chinese Estates

MTRC

Hysan Dev

Hopewell

Sino Land

Swire Properties

Great Eagle

Henderson Land

Wing Tai Properties

Average

Wharf

Hongkong Land


Wheelock

New World Dev

Hang Lung

SHKP

K. Wah Int'l

Kerry Properties

Shun Tak


7 December 2015

Property

HK Property Monthly


Figure 5: YTD share price performance for HK developers/landlords

13.21%

5.18%

4.73%

-1.39%

-1.75%

-2.88%

-3.17%

-3.27%

-5.48%

-7.46%

-8.15%

-8.27%

-12.40%

-13.45%

-14.58%

-16.51%

-17.26%

-18.49%

-19.44%

-20.54%

-22.38%

MTRC

Hongkong Land

Chinese Estates

Great Eagle

Swire Properties

Link REIT

Hopewell

Henderson Land

Hysan Dev

Wheelock

Sino Land

Average

Wing Tai Properties

New World Dev

Shun Tak

Hang Lung


K. Wah Int'l

SHKP

Wharf

Kerry Properties


Figure 6: 12-month share price performance for HK developers/landlords

24.89%

15.57%

2.75%

1.01%

-3.17%

-4.55%

-4.60%

-6.64%

-8.65%

-9.24%

-9.59%

-13.78%

-14.10%

-15.96%

-16.63%

-17.75%

-20.46%

-21.57%

-21.82%

-22.06%

-27.65%

Chinese Estates

MTRC

Hongkong Land

Henderson Land

Hopewell

Link REIT

Great Eagle

Swire Properties

Hysan Dev

Average

Sino Land

Wing Tai Properties

Wheelock

SHKP

New World Dev


Wharf

Shun Tak

Kerry Properties

Hang Lung

K. Wah Int'l


7 December 2015

Property

HK Property Monthly


Figure 7: HK property – valuation table

DB Trade Report Mkt Cap

12M Daily T/O

4 Dec Target Implied Est. NAV EPS PE(x)

Company Ticker Rating Ccy Ccy USDm USDm Price Price Upside NAV Disc FY14 FY15E FY16E FY14 FY15E FY16E

Covered

SHKP 16 HK Buy HKD HKD 36,139 66.6 96.80 133.00 37% 166.3 -42% 7.95 7.07 8.01 12.2 13.7 12.1

MTRC 66 HK Buy HKD HKD 27,537 14.9 36.45 40.74 12% 58.2 -37% 1.99 1.95 1.87 18.3 18.7 19.4

CK Property 1113 HK Buy HKD HKD 26,071 93.8 52.35 75.00 43% 100.0 -48% 3.64 3.83 4.31 14.4 13.7 12.2

Henderson Land 12 HK Buy HKD HKD 20,501 23.1 48.05 56.18 17% 80.3 -40% 3.12 2.99 3.15 15.4 16.1 15.3

Wharf 4 HK Hold HKD HKD 17,326 34.8 44.30 49.82 12% 83.0 -47% 3.38 3.83 4.09 13.1 11.6 10.8

Hongkong Land HKL SP Hold USD USD 16,893 19.0 7.19 7.20 0% 9.7 -26% 0.40 0.36 0.38 18.2 20.0 19.0

Link REIT 823 HK Hold HKD HKD 13,573 35.0 46.70 42.00 -10% 49.1 -5% 1.66 1.77 1.93 28.2 26.3 24.1

Hang Lung 101 HK Buy HKD HKD 10,758 17.1 18.54 30.16 63% 40.2 -54% 2.33 1.36 1.27 8.0 13.7 14.6

Sino Land 83 HK Buy HKD HKD 9,239 8.4 11.70 15.73 34% 21.0 -44% 0.83 0.88 0.88 14.0 13.3 13.3

New World Dev 17 HK Buy HKD HKD 9,101 20.9 7.84 13.00 66% 20.0 -61% 0.75 0.75 0.81 10.4 10.4 9.6

Hysan Dev 14 HK Sell HKD HKD 4,476 6.2 32.70 27.66 -15% 46.1 -29% 2.03 2.07 2.03 16.1 15.8 16.1

Kerry Properties 683 HK Hold HKD HKD 3,992 7.3 21.40 29.00 36% 52.7 -59% 2.58 2.46 2.89 8.3 8.7 7.4

Great Eagle 41 HK Sell HKD HKD 2,178 1.3 25.40 19.10 -25% 47.8 -47% 3.00 2.43 2.36 8.5 10.5 10.8

Shun Tak 242 HK Hold HKD HKD 1,205 2.1 3.07 3.80 24% 11.0 -72% 0.71 0.43 0.44 4.3 7.2 6.9

Not Rated

Swire Properties 1972 HK NR HKD HKD 17,550 7.9 23.25 NA NA NA NA 1.18 1.31 1.29 19.7 17.7 18.1

Wheelock 20 HK NR HKD HKD 8,743 6.8 33.35 NA NA NA NA 4.55 4.85 5.07 7.3 6.9 6.6

Chinese Estates 127 HK NR HKD HKD 5,107 0.3 20.75 NA NA NA NA NA NA NA

Hopewell 54 HK NR HKD HKD 3,054 1.8 27.15 NA NA NA NA 1.45 1.70 2.14 18.8 16.0 12.7

K. Wah Int'l 173 HK NR HKD HKD 1,202 0.9 3.28 NA NA NA NA 0.25 0.32 0.52 13.1 10.3 6.3

Wing Tai Properties 369 HK NR HKD HKD 760 0.2 4.39 NA NA NA NA 0.34 0.30 0.24 12.9 14.6 18.3

Langham Hospitality 1270 HK NR HKD HKD 730 0.5 2.77 NA NA NA NA 0.23 0.17 0.17 12.0 16.3 16.3

Overall average -44% 13.7 14.1 13.5 Source: Deutsche Bank estimates, Company data, Bloomberg Finance LP Consensus estimates for companies NR

7 December 2015

Property

HK Property Monthly


Figure 8: HK property – valuations table (cont.)

EPS growth % BVPS PB(x) DPS Dividends yield % Net gearing %

Company Ticker FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E

Covered

SHKP 16 HK 0 -11 13 152.2 159.4 159.5 0.6 0.6 0.6 3.4 3.4 3.4 3.5 3.5 3.5 15.7 11.2 11.7

MTRC 66 HK 34 -2 -4 28.1 28.7 29.4 1.3 1.3 1.2 1.1 1.2 1.2 2.9 3.2 3.3 17.9 22.7 24.8

CK Property 1113 HK NA 5 12 58.7 61.0 63.6 0.9 0.9 0.8 0.0 1.5 1.7 0.0 2.9 3.3 15.6 10.4 10.4

Henderson Land 12 HK 2 -4 5 79.4 81.2 83.0 0.6 0.6 0.6 1.1 1.2 1.3 2.3 2.5 2.7 18.4 17.0 14.9

Wharf 4 HK -7 13 7 100.8 102.9 105.3 0.4 0.4 0.4 1.8 1.8 1.8 4.1 4.1 4.1 19.4 18.1 13.6

Hongkong Land HKL SP -1 -9 6 11.7 11.9 12.0 0.6 0.6 0.6 0.2 0.2 0.2 2.6 2.7 2.8 9.6 12.7 12.7

Link REIT 823 HK 13 7 9 41.7 51.5 51.5 1.1 0.9 0.9 1.7 1.8 1.9 3.5 3.9 4.1 14.4 14.0 13.8

Hang Lung 101 HK 95 -42 -6 29.5 30.1 30.6 0.6 0.6 0.6 0.8 0.8 0.8 4.1 4.2 4.2 NA 2.2 4.1

Sino Land 83 HK -25 5 0 18.6 19.5 19.9 0.6 0.6 0.6 0.5 0.5 0.5 4.3 4.3 4.3 NA NA NA

New World Dev 17 HK -21 0 8 18.4 19.9 20.6 0.4 0.4 0.4 0.4 0.4 0.4 5.4 5.4 5.4 29.3 25.9 33.7

Hysan Dev 14 HK 6 2 -2 63.0 63.6 64.3 0.5 0.5 0.5 1.2 1.3 1.3 3.8 3.8 3.8 4.0 3.1 3.1

Kerry Properties 683 HK 230 -5 17 55.4 57.0 58.8 0.4 0.4 0.4 0.9 0.9 1.1 4.2 4.2 4.9 24.5 31.8 31.5

Great Eagle 41 HK 14 -19 -3 81.0 84.6 88.1 0.3 0.3 0.3 0.7 0.6 0.6 2.9 2.5 2.3 25.8 21.0 19.1

Shun Tak 242 HK 471 -40 4 8.7 9.2 9.5 0.4 0.3 0.3 0.2 0.1 0.1 7.0 4.2 4.3 3.0 5.7 16.9

Not Rated

Swire Properties 1972 HK 17 11 -2 35.4 36.1 36.8 0.7 0.6 0.6 0.6 0.7 0.7 2.7 2.9 3.0 16.5 17.1 16.9

Wheelock 20 HK 15 7 4 86.6 99.1 103.4 0.4 0.3 0.3 1.1 1.2 1.2 3.3 3.5 3.7 52.8 41.5 37.2

Chinese Estates 127 HK NA NA NA NA NA NA NA NA NA NA NA NA

Hopewell 54 HK -2 17 26 49.4 50.8 54.6 0.5 0.5 0.5 1.1 1.1 1.2 4.2 4.2 4.5 0.1 NA NA

K. Wah Int'l 173 HK -52 28 62 8.5 8.4 8.9 0.4 0.4 0.4 0.2 0.2 0.2 4.6 4.6 4.6 40.1 36.4 21.4

Wing Tai Properties 369 HK 10 -12 -20 NA NA NA 0.1 0.1 0.1 3.2 3.2 3.2 NA NA NA

Langham Hospitality 1270 HK -2 -26 0 5.1 5.2 5.1 0.5 0.5 0.5 0.3 0.2 0.2 10.4 8.7 8.7 63.0 63.0 63.0

Overall average 42 -4 7 0.6 0.6 0.6 3.9 3.9 4.0 21.8 20.8 20.5 Source: Deutsche Bank estimates, Company data, Bloomberg Finance LP Consensus estimates for companies NR

7 December 2015

Property

HK Property Monthly


Figure 9: HK Property disc to NAV

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Jan

-92

Dec

-93

Dec

-95

Dec

-97

Dec

-99

Dec

-01

Dec

-03

Dec

-05

Dec

-07

Dec

-09

Dec

-11

Dec

-13

Dec

-15

Sector Disc to NAV -1SD Avg +1SD

Source: Bloomberg Finance LP, Deutsche Bank

Figure 10: HK Property P/E Figure 11: HK Property P/B

0

5

10

15

20

25

30

35

Jan

-92

Dec

-93

Dec

-95

Dec

-97

Dec

-99

Dec

-01

Dec

-03

Dec

-05

Dec

-07

Dec

-09

Dec

-11

Dec

-13

Dec

-15

Sector P/E -1SD Avg +1SD

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Jan

-92

Dec

-93

Dec

-95

Dec

-97

Dec

-99

Dec

-01

Dec

-03

Dec

-05

Dec

-07

Dec

-09

Dec

-11

Dec

-13

Dec

-15

Sector P/B -1SD Avg +1SD



7 December 2015

Property

HK Property Monthly


Figure 12: Developer discount to NAV Figure 13: Landlord discount to NAV

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

Jan

-92

Dec

-93

Dec

-95

Dec

-97

Dec

-99

Dec

-01

Dec

-03

Dec

-05

Dec

-07

Dec

-09

Dec

-11

Dec

-13

Dec

-15

Developer Disc to NAV -1SD Avg +1SD

-80%

-60%

-40%

-20%

0%

20%

40%

Jan

-92

Dec

-93

Dec

-95

Dec

-97

Dec

-99

Dec

-01

Dec

-03

Dec

-05

Dec

-07

Dec

-09

Dec

-11

Dec

-13

Dec

-15

Landlord Disc to NAV -1SD Avg +1SD



Figure 14: Developer P/E Figure 15: Landlord P/E

0

5

10

15

20

25

30

35

Jan

-92

Dec

-93

Dec

-95

Dec

-97

Dec

-99

Dec

-01

Dec

-03

Dec

-05

Dec

-07

Dec

-09

Dec

-11

Dec

-13

Dec

-15

Developer P/E -1SD Avg +1SD

0

5

10

15

20

25

30

35

40

45

50

Jan

-92

Dec

-93

Dec

-95

Dec

-97

Dec

-99

Dec

-01

Dec

-03

Dec

-05

Dec

-07

Dec

-09

Dec

-11

Dec

-13

Dec

-15

Landlord P/E -1SD Avg +1SD



Figure 16: Developer P/B Figure 17: Landlord P/B

0.0

0.5

1.0

1.5

2.0

2.5

Jan

-92

Dec

-93

Dec

-95

Dec

-97

Dec

-99

Dec

-01

Dec

-03

Dec

-05

Dec

-07

Dec

-09

Dec

-11

Dec

-13

Dec

-15

Developer P/B -1SD Avg +1SD

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Jan

-92

Dec

-93

Dec

-95

Dec

-97

Dec

-99

Dec

-01

Dec

-03

Dec

-05

Dec

-07

Dec

-09

Dec

-11

Dec

-13

Dec

-15

Landlord P/B -1SD Avg +1SD



7 December 2015

Property

HK Property Monthly


HK residential property market update

Figure 18: No. of transactions in primary market Figure 19: No. of transactions in secondary market

-

2

4

6

8

10

12

14

16

18

20

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Ja

n-9

9

Ja

n-0

0

Ja

n-0

1

Ja

n-0

2

Ja

n-0

3

Ja

n-0

4

Ja

n-0

5

Ja

n-0

6

Ja

n-0

7

Ja

n-0

8

Ja

n-0

9

Ja

n-1

0

Ja

n-1

1

Ja

n-1

2

Ja

n-1

3

Ja

n-1

4

Ja

n-1

5

Volume (# transactions) - LHS Average Volume (# transactions) - LHS

Average Value Per Transaction (HK$mn)

HK$ MUnit

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Jan-9

9

Jan-0

0

Jan-0

1

Jan-0

2

Jan-0

3

Jan-0

4

Jan-0

5

Jan-0

6

Jan-0

7

Jan-0

8

Jan-0

9

Jan-1

0

Jan-1

1

Jan-1

2

Jan-1

3

Jan-1

4

Jan-1

5

Volume (# transactions) - LHS Average Volume (# transactions) - LHS

Average Value Per Transaction (HK$mn)

HK$ MUnit

Source: Midland, Deutsche Bank


Figure 20: Annual residential volume - breakdown

10-year average: 13,057 units

5-year average: 12,708 units

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000Units


Figure 21: Annual residential volume - breakdown

Type 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 15YTD

Private – Primary 21,997 16,379 20,563 26,489 27,378 25,874 15,071 12,158 16,218 8,863 14,715 12,917 10,854 12,961 9,986 16,822 14,915

HOS/PSPS/HS 14,614 8,979 12,647 1,300 0 0 0 0 1,066 822 0 809 0 0 1,041 3 20

Private + HOS/PSPS/HS 36,611 25,358 33,210 27,789 27,378 25,874 15,071 12,158 17,284 9,685 14,715 13,726 10,854 12,961 11,027 16,825 14,935

Private – Secondary 58,239 50,767 50,983 48,095 46,131 76,668 88,337 70,209 100,300 87,993 102,298 183,805 68,366 70,183 41,784 49,538 39,121

Total 94,850 76,125 84,193 75,884 73,509 102,542 103,408 82,367 117,584 97,678 117,013 197,531 79,220 83,144 52,811 66,363 54,056


7 December 2015

Property

HK Property Monthly


Figure 22: CCL index

20

40

60

80

100

120

140

160

Fe

b-9

4

Mar-

95

Ap

r-96

Ma

y-97

Ju

n-9

8

Ju

l-99

Au

g-0

0

Se

p-0

1

Oct-

02

No

v-0

3

De

c-0

4

Ja

n-0

6

Fe

b-0

7

Mar-

08

Apr-

09

May-

10

Ju

n-1

1

Ju

l-12

Au

g-1

3

Se

p-1

4

Oct-

15

CCL Index

CCL(LHS) Average

Source: Centaline, Deutsche Bank

Figure 23: Weekend primary sales volume Figure 24: Weekly secondary volume (top-35 estates)

0

100

200

300

400

500

600

700

800

900

Jan-14 Apr-14 Aug-14 Nov-14 Mar-15 Jun-15 Oct-15

Units

10

30

50

70

90

110

130

Jan-14 Apr-14 Aug-14 Nov-14 Mar-15 Jun-15 Oct-15

Units

Source: Sing Tao, HKET, Deutsche Bank


Figure 25: Number of confirmor’s transactions Figure 26: Confirmors’ transactions since SSD

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

0

200

400

600

800

1,000

1,200

Sep

-98

Sep

-99

Sep

-00

Sep

-01

Sep

-02

Sep

-03

Sep

-04

Sep

-05

Sep

-06

Sep

-07

Sep

-08

Sep

-09

Sep

-10

Sep

-11

Sep

-12

Sep

-13

Sep

-14

Sep

-15

No of Confirmor's Transactions - LHS

% of Confirmor's Transactions in Secondary Market - RHS

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

0

100

200

300

400

De

c-1

0

Ma

r-1

1

Ju

n-1

1

Se

p-1

1

De

c-1

1

Ma

r-1

2

Ju

n-1

2

Se

p-1

2

De

c-1

2

Ma

r-1

3

Jun

-13

Se

p-1

3

De

c-1

3

Ma

r-1

4

Ju

n-1

4

Se

p-1

4

De

c-1

4

Ma

r-1

5

Ju

n-1

5

Se

p-1

5

No of Confirmor's Transactions - LHS% of Confirmor's Transactions in Secondary Market - RHS



7 December 2015

Property

HK Property Monthly


Figure 27: HK rating & valuation department residential

price indices – all residential


price indices – class A residential

0

50

100

150

200

250

300

350

Ja

n 9

3

Ja

n 9

4

Ja

n 9

5

Ja

n 9

6

Ja

n 9

7

Ja

n 9

8

Ja

n 9

9

Ja

n 0

0

Ja

n 0

1

Ja

n 0

2

Ja

n 0

3

Ja

n 0

4

Ja

n 0

5

Ja

n 0

6

Ja

n 0

7

Ja

n 0

8

Ja

n 0

9

Ja

n 1

0

Ja

n 1

1

Ja

n 1

2

Ja

n 1

3

Ja

n 1

4

Ja

n 1

5

All Residential

0

50

100

150

200

250

300

350

400

Ja

n-9

3

Ja

n-9

4

Ja

n-9

5

Ja

n-9

6

Ja

n-9

7

Ja

n-9

8

Ja

n-9

9

Ja

n-0

0

Ja

n-0

1

Ja

n-0

2

Ja

n-0

3

Jan

-04

Jan

-05

Jan

-06

Jan

-07

Jan

-08

Ja

n-0

9

Ja

n-1

0

Ja

n-1

1

Ja

n-1

2

Ja

n-1

3

Ja

n-1

4

Ja

n-1

5

Class A Residential

Source: CEIC, Deutsche Bank



price indices – class B residential


price indices – class C residential

0

50

100

150

200

250

300

350

Ja

n 9

3

Ja

n 9

4

Ja

n 9

5

Ja

n 9

6

Ja

n 9

7

Ja

n 9

8

Ja

n 9

9

Ja

n 0

0

Ja

n 0

1

Ja

n 0

2

Ja

n 0

3

Ja

n 0

4

Ja

n 0

5

Ja

n 0

6

Ja

n 0

7

Ja

n 0

8

Ja

n 0

9

Ja

n 1

0

Ja

n 1

1

Ja

n 1

2

Ja

n 1

3

Ja

n 1

4

Ja

n 1

5

Class B Residential

0

50

100

150

200

250

300Ja

n 9

3

Ja

n 9

4

Ja

n 9

5

Ja

n 9

6

Ja

n 9

7

Ja

n 9

8

Ja

n 9

9

Ja

n 0

0

Ja

n 0

1

Ja

n 0

2

Ja

n 0

3

Ja

n 0

4

Ja

n 0

5

Ja

n 0

6

Ja

n 0

7

Ja

n 0

8

Ja

n 0

9

Ja

n 1

0

Ja

n 1

1

Ja

n 1

2

Ja

n 1

3

Ja

n 1

4

Ja

n 1

5

Class C Residential




price indices – class D residential


price indices – class E residential

0

50

100

150

200

250

300

Jan 9

3

Jan 9

4

Ja

n 9

5

Jan 9

6

Jan 9

7

Jan 9

8

Jan 9

9

Jan 0

0

Jan 0

1

Ja

n 0

2

Jan 0

3

Jan 0

4

Jan 0

5

Jan 0

6

Jan 0

7

Jan 0

8

Ja

n 0

9

Jan 1

0

Jan 1

1

Jan 1

2

Jan 1

3

Jan 1

4

Jan 1

5

Class D Residential

0

50

100

150

200

250

300

350

Jan 9

3

Jan 9

4

Jan 9

5

Jan 9

6

Jan 9

7

Jan 9

8

Ja

n 9

9

Jan 0

0

Jan 0

1

Jan 0

2

Jan 0

3

Jan 0

4

Jan 0

5

Ja

n 0

6

Jan 0

7

Jan 0

8

Jan 0

9

Jan 1

0

Jan 1

1

Jan 1

2

Ja

n 1

3

Jan 1

4

Jan 1

5

Class E Residential



7 December 2015

Property

HK Property Monthly


Figure 33: Trend of home rents (HK$ psf)

8

10

12

14

16

18

20

22

24

26

28

Jan-0

0

Jan-0

1

Jan-0

2

Jan-0

3

Jan-0

4

Jan-0

5

Jan-0

6

Jan-0

7

Jan-0

8

Jan-0

9

Jan-1

0

Jan-1

1

Jan-1

2

Jan-1

3

Jan-1

4

Jan-1

5


Figure 34: Private property market yield (%pa) for

domestic premise

Figure 35: Difference between mortgage yield and rental

yield

2

3

4

5

6

7

Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15

%

Class A Class B Class C Class D Class E

-5

-4

-3

-2

-1

0

1

2

3

4

5

Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15

%

Class A Class B Class C Class D Class E

Source: Rating and Valuation Department, Deutsche Bank

Source: Rating and Valuation Department, Deutsche Bank

Figure 36: Residential prices and real mortgage rates Figure 37: Residential prices and nominal mortgage rates

-10%

-5%

0%

5%

10%

15%

20%

0

50

100

150

200

250

300

350

Jan-9

3

Jan-9

4

Jan-9

5

Jan-9

6

Jan-9

7

Jan-9

8

Jan-9

9

Jan-0

0

Jan-0

1

Jan-0

2

Jan-0

3

Jan-0

4

Jan-0

5

Jan-0

6

Jan-0

7

Jan-0

8

Jan-0

9

Jan-1

0

Jan-1

1

Jan-1

2

Jan-1

3

Jan-1

4

Jan-1

5

Residential Property Prices Index (1999=100)(LHS) Real Mortgage Rate(RHS)

0%

2%

4%

6%

8%

10%

12%

14%

0

50

100

150

200

250

300

350

Jan-9

3

Jan-9

4

Jan-9

5

Jan-9

6

Jan-9

7

Jan-9

8

Jan-9

9

Jan-0

0

Jan-0

1

Jan-0

2

Jan-0

3

Jan-0

4

Jan-0

5

Jan-0

6

Jan-0

7

Jan-0

8

Jan-0

9

Jan-1

0

Jan-1

1

Jan-1

2

Jan-1

3

Jan-1

4

Jan-1

5

Residential Property Prices Index (1999=100)(LHS) HK Mortgage Rate (Nominal)

Source: RV&D, Bloomberg Finance LP, Midland, Deutsche Bank

Source: RV&D, Bloomberg Finance LP, Midland, Deutsche Bank

7 December 2015

Property

HK Property Monthly


Transacted prices of major housing estates

Figure 38: Taikoo Shing (HK$ psf) Figure 39: South Horizons (HK$ psf)

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Sep-95 Sep-97 Sep-99 Sep-01 Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 Sep-13 Sep-15

Taikoo Shing

2,000

4,000

6,000

8,000

10,000

12,000

14,000


South Horizons



Figure 40: Whampoa Garden (HK$ psf) Figure 41: Mei Foo Sun Chuen (HK$ psf)

1,000

3,000

5,000

7,000

9,000

11,000

13,000


Whampoa Garden

1,000

3,000

5,000

7,000

9,000


Mei Foo Sun Chuen



Figure 42: Sceneway Garden (HK$ psf) Figure 43: Telford Garden (HK$ psf)

1,000

3,000

5,000

7,000

9,000

11,000


Sceneway Garden

1,000

3,000

5,000

7,000

9,000

11,000


Telford Gardens



7 December 2015

Property

HK Property Monthly


Figure 44: Luk Yeung Sun Chuen (HK$ psf) Figure 45: Kingswood Villas (HK$ psf)

1,000

3,000

5,000

7,000

9,000

11,000

13,000


Luk Yeung Sun Chuen

0

2,000

4,000

6,000

8,000


Kingswood Villas



Figure 46: Metro City (HK$ psf) Figure 47: Sunshine City (HK$ psf)

1,000

3,000

5,000

7,000

9,000

11,000

Sep-97 Sep-99 Sep-01 Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 Sep-13 Sep-15

Metro City

1,000

3,000

5,000

7,000

9,000

11,000


Sunshine City



Figure 48: City one Shatin (HK$ psf) Figure 49: Discovery Park (HK$ psf)

1,000

3,000

5,000

7,000

9,000

11,000


City one shatin

0

2000

4000

6000

8000

10000

12000


Discovery Park



7 December 2015

Property

HK Property Monthly


Figure 50: Future residential supply

-

10

20

30

40

50

60

70

80

90

1Q05 1Q06 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 1Q15

('000 units)

Total Available Completed but unsold

Under construction and unsold Units from disposed site where construction may start anytime Source: Deutsche Bank, R&VD

Figure 51: Primary unsold inventory data (in units)

4,000

8,000

12,000

16,000

20,000

24,000

28,000

Sep-98 Sep-00 Sep-02 Sep-04 Sep-06 Sep-08 Sep-10 Sep-12 Sep-14

Units

Source: Centaline, Deutsche Bank

7 December 2015

Property

HK Property Monthly


Figure 52: Land sale in fiscal year 2015/16 (Apr-15 to Mar-16)

Lot No. Location Use Site Area (Ha)

Site Area (sf)

Launch Schedule

Rolled Over Sites

(i) Residential

TPTL 226 Chong San Road, Pak Shek Kok, Tai Po Residential R2 1.71 184,290 K. Wah: HK$3bn

TPTL 227 Chong San Road, Pak Shek Kok, Tai Po Residential R2 2.87 308,927 1H

TPTL 228 Fo Yin Road, Pak Shek Kok, Tai Po Residential R2 1.08 116,144 1H

NKIL 6534 Junction of Fuk Wa Street / Camp Street / Fuk Wing Street, Cheung Sha Wan, Kowloon

Residential R1 0.32 34,154 Tender Close: 29 Jan

NKIL 6542 Yin Ping Road, Tai Wo Ping, Kowloon Residential R2 2.04 219,596 Shimao: HK$7.02bn

TPTL 223 Lo Fai Road, Tai Po Residential R3 2.19 235,732 1H

TPTL 229 Lo Fai Road, Tai Po Residential R3 1.03 110,869 1H

RBL 1201 Wong Ma Kok Road, Stanley, Hong Kong Residential R3 2.53 272,329 2H

RBL 1202 Wong Ma Kok Road, Stanley, Hong Kong Residential R3 0.42 45,209 2H

TMTL 523 Castle Peak Road – Tai Lam, Tuen Mun Residential R2 0.70 75,348 2H

(iii) Commercial/Business

AIL 462 Yip Kan Street and Wong Chuk Hang Road, Wong Chuk Hang, Hong Kong

Business 0.18 18,945 2H

New Sites

(i) Residential

Lot 1066 in DD 103 Au Tau, Yuen Long Residential R3 2.85 306,236 Tender Close: 22 Jan

TMTL 542 Castle Peak Road – Castle Peak Bay, Area 48, Tuen Mun Residential R3 0.82 88,157 Poly-H: HK$1.73bn

TYTL 190 Sai Shan Road, Tsing Yi Residential R1 0.62 66,737 Failed

TPTL 230 Tai Po Road, Tai Po Kau, Tai Po Residential R3 2.70 290,628 2H

TMTL 516 Tsing Ha Lane, Castle Peak Road – Castle Peak Bay, Area 20, Tuen Mun

Residential R2 0.61 65,660 2H

TMTL 497 So Kwun Wat Road, Area 56, Tuen Mun Residential R2 0.73 78,685 Tender Close: 18 Dec

KIL 11257 Sheung Shing Street, Ho Man Tin, Kowloon Residential R1 0.91 97,952 2H

TPTL 221 Shan Tong Road, Lai Chi Shan, Tai Po Residential R2 3.99 429,484 Tender Close: 5 Feb

NKIL 6533 Lung Cheung Road, Beacon Hill, Kowloon Residential R3 2.18 234,655 2H

STTL 611 Whitehead, Ma On Shan, Sha Tin Residential R3 0.46 49,773 2H

STTL 609 To Shek Street, Sha Tin Residential R2 0.88 94,185 2H

STTL 610 Tai Po Road – Sha Tin Heights, Sha Tin Residential R3 0.29 31,216 2H

YTIL 44 Junction of Shung Shun Street and Yan Yue Wai, Yau Tong, Kowloon

Residential R2 1.06 114,346 2H

(ii) Commercial/Business

YLTL 532 Junction of Wang Yip Street West and Hong Yip Street, Tung Tau Industrial Area, Yuen Long

Business 0.92 99,029 Tender Close: 18 Dec

KCTL 517 Tai Lin Pai Road, Kwai Chung Commercial 0.12 13,003 2H

NKIL 6505 King Lam Street, Cheung Sha Wan, Kowloon Business 0.77 83,098 2H

NKIL 6547 Kai Tak Area 4C Site 5, Kowloon Hotel 0.93 100,536 2H

Additional Sites

(i) Residential

TMTL 546 Castle Peak Road – So Kwun Wat, Area 48, Tuen Mun Residential R2 2.72 292,781 2H

TMTL 547 Castle Peak Road – So Kwun Wat, Area 48, Tuen Mun Residential R2 2.18 234,655 2H

(ii) Business

STTL 617 On Yiu Street, Shek Mun, Sha Tin Business 0.17 18,299 SHKP: HK$675.5mn

Source: The Lands Department, Deutsche Bank

7 December 2015

Property

HK Property Monthly


HK commercial property market update

Figure 53: Savills residential indices Figure 54: Savills Grade A office indices

50

100

150

200

250

300

350

400

450

500

1Q

92

1Q

93

1Q

94

1Q

95

1Q

96

1Q

97

1Q

98

1Q

99

1Q

00

1Q

01

1Q

02

1Q

03

1Q

04

1Q

05

1Q

06

1Q

07

1Q

08

1Q

09

1Q

10

1Q

11

1Q

12

1Q

13

1Q

14

1Q

15

Savills Residential Indices

Luxury Residential Rent Luxury Residential Price Mass Residential Price

50

100

150

200

250

300

350

1Q

92

1Q

93

1Q

94

1Q

95

1Q

96

1Q

97

1Q

98

1Q

99

1Q

00

1Q

01

1Q

02

1Q

03

1Q

04

1Q

05

1Q

06

1Q

07

1Q

08

1Q

09

1Q

10

1Q

11

1Q

12

1Q

13

1Q

14

1Q

15

Savills Grade A Office Indices

Grade 'A' Office Rent Grade 'A' Office Price

Source: Savills, Deutsche Bank


Figure 55: Savills retail indices Figure 56: Grade A office property yield

50

100

150

200

250

300

350

400

1Q

92

1Q

93

1Q

94

1Q

95

1Q

96

1Q

97

1Q

98

1Q

99

1Q

00

1Q

01

1Q

02

1Q

03

1Q

04

1Q

05

1Q

06

1Q

07

1Q

08

1Q

09

1Q

10

1Q

11

1Q

12

1Q

13

1Q

14

1Q

15

Savills Retail Indices

Prime Street Shop Rent Shopping Centre Rent

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

Average

+1SD

-1SD


Source: CEIC, Rating & Valuation Department, Deutsche Bank

Figure 57: Retail property yield Figure 58: Grade A and B office yield

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

Average

+1SD

-1SD

2

3

4

5

6

7

8

9

10

Grade A yield Grade B yield



7 December 2015

Property

HK Property Monthly


Figure 59: Retail sales value and volume index Figure 60: Central office cap value index vs. rental index

-

50

100

150

200

250

300

350

Jan-8

1

Jan-8

3

Jan-8

5

Jan-8

7

Jan-8

9

Jan-9

1

Jan-9

3

Jan-9

5

Jan-9

7

Jan-9

9

Jan-0

1

Jan-0

3

Jan-0

5

Jan-0

7

Jan-0

9

Jan-1

1

Jan-1

3

Jan-1

5

HK: Retail Sales Value Index: All Retail Outlets (10/04-9/05=100)

HK: Retail Sales Vol Index: All Retail Outlets (10/04-9/05=100)

-

200

400

600

800

1,000

1,200

1,400

1Q841Q861Q881Q901Q921Q941Q961Q981Q001Q021Q041Q061Q081Q101Q121Q14

Central office capital value index Central office rental index

Source: Census and Statistics Department, Deutsche Bank

Source: JLL, Deutsche Bank

Figure 61: JLL office rental index Figure 62: JLL office capital value index

0

100

200

300

400

500

600

3Q

88

3Q

89

3Q

90

3Q

91

3Q

92

3Q

93

3Q

94

3Q

95

3Q

96

3Q

97

3Q

98

3Q

99

3Q

00

3Q

01

3Q

02

3Q

03

3Q

04

3Q

05

3Q

06

3Q

07

3Q

08

3Q

09

3Q

10

3Q

11

3Q

12

3Q

13

3Q

14

3Q

15

JLL Office Rental Index

Overall Central Wanchai/Causeway Bay Tsim Sha Tsui HK East

-

200

400

600

800

1,000

1,200

3Q

88

3Q

89

3Q

90

3Q

91

3Q

92

3Q

93

3Q

94

3Q

95

3Q

96

3Q

97

3Q

98

3Q

99

3Q

00

3Q

01

3Q

02

3Q

03

3Q

04

3Q

05

3Q

06

3Q

07

3Q

08

3Q

09

3Q

10

3Q

11

3Q

12

3Q

13

3Q

14

3Q

15

JLL Office Capital Value Index

Overall Central Wanchai/Causeway Bay Tsim Sha Tsui HK East



Figure 63: JLL retail rental index Figure 64: JLL retail capital value index

50

100

150

200

250

300

350

1Q

01

3Q

01

1Q

02

3Q

02

1Q

03

3Q

03

1Q

04

3Q

04

1Q

05

3Q

05

1Q

06

3Q

06

1Q

07

3Q

07

1Q

08

3Q

08

1Q

09

3Q

09

1Q

10

3Q

10

1Q

11

3Q

11

1Q

12

3Q

12

1Q

13

3Q

13

1Q

14

3Q

14

1Q

15

3Q

15

JLL Retail Rental Index

High Street Shops Prime Area Retail Centers

50

150

250

350

450

550

650

1Q

01

3Q

01

1Q

02

3Q

02

1Q

03

3Q

03

1Q

04

3Q

04

1Q

05

3Q

05

1Q

06

3Q

06

1Q

07

3Q

07

1Q

08

3Q

08

1Q

09

3Q

09

1Q

10

3Q

10

1Q

11

3Q

11

1Q

12

3Q

12

1Q

13

3Q

13

1Q

14

3Q

14

1Q

15

3Q

15

JLL Retail Capital Value Index

High Street Shops Prime Area Retail Centers Source: JLL, Deutsche Bank


7 December 2015

Property

HK Property Monthly


Figure 65: Future Grade-A office supply by district

Project Developer District HK Island KLN / NT Total

2016

NKIL 6314 J/O Kai Cheung Road and Wang Kwong Road, Kowloon bay

Goldin Financial Kowloon Bay 681,890

KIL 11111 J/O Hung Luen Road and Kin Wan Street, Hung Hom Wheelock Hung Hom 474,240

STTL463 Junction of On Yiu Street and On Kwan Street, Shek Mun

Billion Development Shatin 344,319

New supply in 2016 1,500,450

2017

14-30 King Wah Road Henderson North Point 275,809

New World Centre Redevelopment NWD Tsim Sha Tsui 260,000

Junction of Hang Yip Street, Wai Yip Street, Yan Yip Street and Kwun Tong Road

Mapletree Kwun Tong 528,241

Junction of Wang Chiu Road and Lam Lee Road Swire Properties Kowloon Bay 555,000

NKIL 6311 J/O Sheung Yuet Road, Wang Tai Road and Wang Yuen Street

HK Pacific Investments Kowloon Bay 266,499

2 Ng Fong Street, San Po Kong Billion Development San Po Kong 314,214

Hong Kong Science Park, Phase 3 (Bldg 20E & 22E), Pak Shek Kok

HKSAR Tai Po 200,000

New supply in 2017 2,399,763

2018

1 Hennessy Road, Wanchai Chinachem Wanchai 251,999

Sunning Plaza and Sunning Court Redevelopment Hysan Causeway Bay 300,000

Taikoo Place Phase 2A (ex-Somerset House) Swire Properties Quarry Bay 716,002

180 Wai Yip Street, Kwun Tong SHKP /Wong’s Kwun Tong 383,364

650 Cheung Sha Wan Road First Group Cheung Sha Wan 154,827

33 Tseuk Luk Street, San Po Kong SHKP San Po Kong 245,748

New supply in 2018 2,051,940

2019

704-730 King's Road & 201-227 Tsat Tsz Mui Road NWD Quarry Bay 389,989

Junction of Hung Yip Street, Wai Yip Street, Shun Yip Street Nan Fung / Link REIT Kwun Tong 883,888

123 Hoi Bun Road Wheelock Kwun Tong 476,972

8-10 Wong Chuk Hang Road Swire Properties Aberdeen / Wong Chuk Hang

308,000

New supply in 2019 2,058,849


7 December 2015

Property

HK Property Monthly


HK macro update

Figure 66: Hong Kong interbank rate – 3 month Figure 67: HK-US prime spread

0

2

4

6

8

10

12

14

16

18%

(1.50)

(1.00)

(0.50)

-

0.50

1.00

1.50

2.00

2.50 % HK-US Prime Spread



Figure 68: Real prime rate Figure 69: HK unemployment rate (%)

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

%Real Prime Rate

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

Ja

n-8

2

Ja

n-8

4

Ja

n-8

6

Ja

n-8

8

Ja

n-9

0

Ja

n-9

2

Ja

n-9

4

Ja

n-9

6

Ja

n-9

8

Ja

n-0

0

Ja

n-0

2

Jan-0

4

Ja

n-0

6

Jan-0

8

Ja

n-1

0

Ja

n-1

2

Ja

n-1

4



Figure 70: Median monthly household income –

including bonus (HK$)

Figure 71: Median monthly household income –

excluding bonus (HK$)

11,000

13,000

15,000

17,000

19,000

21,000

23,000

25,000

27,000

1Q

93

1Q

94

1Q

95

1Q

96

1Q

97

1Q

98

1Q

99

1Q

00

1Q

01

1Q

02

1Q

03

1Q

04

1Q

05

1Q

06

1Q

07

1Q

08

1Q

09

1Q

10

1Q

11

1Q

12

1Q

13

1Q

14

1Q

15

12,000

14,000

16,000

18,000

20,000

22,000

24,000

26,000

1Q

93

1Q

94

1Q

95

1Q

96

1Q

97

1Q

98

1Q

99

1Q

00

1Q

01

1Q

02

1Q

03

1Q

04

1Q

05

1Q

06

1Q

07

1Q

08

1Q

09

1Q

10

1Q

11

1Q

12

1Q

13

1Q

14

1Q

15



7 December 2015

Property

HK Property Monthly


Figure 72: HK Nominal Wage Index (Sep 1992=100) Figure 73: HK real GDP (YoY growth)

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

-

50

100

150

200

250

Jun-8

3

Jun-8

5

Jun-8

7

Jun-8

9

Jun-9

1

Jun-9

3

Jun-9

5

Jun-9

7

Jun-9

9

Jun-0

1

Jun-0

3

Jun-0

5

Jun-0

7

Jun-0

9

Jun-1

1

Jun-1

3

Jun-1

5

HK Nominal Wage Index (Sep 1992=100) YoY Chg

-10%

-5%

0%

5%

10%

15%

2Q

96

2Q

97

2Q

98

2Q

99

2Q

00

2Q

01

2Q

02

2Q

03

2Q

04

2Q

05

2Q

06

2Q

07

2Q

08

2Q

09

2Q

10

2Q

11

2Q

12

2Q

13

2Q

14

2Q

15

HK Real GDP (YoY Growth)



Figure 74: HK real GDP (seasonally adj. QoQ growth) Figure 75: Average price to income ratio of HK

-4%

-2%

0%

2%

4%

6%

8%

1Q

93

1Q

94

1Q

95

1Q

96

1Q

97

1Q

98

1Q

99

1Q

00

1Q

01

1Q

02

1Q

03

1Q

04

1Q

05

1Q

06

1Q

07

1Q

08

1Q

09

1Q

10

1Q

11

1Q

12

1Q

13

1Q

14

1Q

15

4

6

8

10

12

14

16

18

Mar-

85

Mar-

87

Mar-

89

Mar-

91

Mar-

93

Mar-

95

Mar-

97

Mar-

99

Mar-

01

Mar-

03

Mar-

05

Mar-

07

Mar-

09

Mar-

11

Mar-

13

Mar-

15

Price-to-Income ratio 10-year average -1SD +1SD

Years

Less Affordable

More Affordable


Source: RV&D, CEIC, Bloomberg Finance LP, Deutsche Bank

Figure 76: Average affordability ratio of HK Figure 77: Affordability – unadjusted

0

20

40

60

80

100

120

140

Ma

r-85

Ma

r-87

Ma

r-89

Ma

r-91

Ma

r-93

Ma

r-95

Ma

r-97

Ma

r-99

Ma

r-01

Ma

r-03

Ma

r-05

Ma

r-07

Ma

r-09

Ma

r-11

Ma

r-13

Ma

r-15

%

Less Affordable

More Affordable

Average (Ex 93-97)

Average (1985-Now)

0

20

40

60

80

100

120

140

Mar-

85

Mar-

87

Mar-

89

Mar-

91

Mar-

93

Mar-

95

Mar-

97

Mar-

99

Mar-

01

Mar-

03

Mar-

05

Mar-

07

Mar-

09

Mar-

11

Mar-

13

Mar-

15

Affordability ratio (unadjusted) Average -1SD +1SD

%

Source: RV&D, CEIC, Bloomberg Finance LP, Deutsche Bank

Source: RV&D, Bloomberg Finance LP, Deutsche Bank

7 December 2015

Property

HK Property Monthly


Figure 78: Affordability – 40-69.9sqm flat Figure 79: Affordability – all households

0

20

40

60

80

100

120

140

Mar-

85

Mar-

87

Mar-

89

Mar-

91

Mar-

93

Mar-

95

Mar-

97

Mar-

99

Mar-

01

Mar-

03

Mar-

05

Mar-

07

Mar-

09

Mar-

11

Mar-

13

Mar-

15

%

Less Affordable

More Affordable

Banks' Threshold (50% of Monthly Income)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%All Household affordability (Monthly Instalment/Median Household Income)

Affordability Ratio - P base Affordability Ratio - H base

Le

ss

A

ffo

rda

ble

Mo

re

Aff

ord

ab

le

Source: RV&D, Deutsche Bank


Figure 80: Affordability – private households Figure 81: Property transaction vs. stock & HK GDP

0%

20%

40%

60%

80%

100%

120%

Private Household affordability (Monthly Instalment/Median Household Income)

Affordability Ratio - P base Affordability Ratio - H base

Less

Aff

ord

ab

leM

ore

A

ffo

rdab

le

0%

5%

10%

15%

20%

25%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

10M

15

Property transaction vs stock (RHS) Private property stock / HK GDP (LHS)



Figure 82: Number of domestic households by monthly household income and type of housing in 3Q 2015

Monthly household income Type of housing

(HK$) Public rental housing

Subsidized sale flats Private permanent housing

Temporary housing Total

('000) ('000) ('000) ('000) ('000)

< 4,000 18.8 19.2 75.2 1.4 114.6

4,000 - 5,999 74.6 11.0 28.2 0.7 114.5

6,000 - 7,999 60.4 9.6 33.4 # 103.8

8,000 - 9,999 50.7 9.3 36.8 # 97.3

10,000 - 14,999 145.7 35.8 93.0 2.8 277.3

15,000 - 19,999 119.7 40.6 104.1 1.0 265.5

20,000 - 24,999 96.2 40.4 103.5 1.1 241.3

25,000 - 29,999 70.3 39.7 85.8 0.6 196.4

30,000 - 39,999 80.1 69.7 179.3 1.4 330.5

40,000 and over 57.5 105.7 580 0.9 744

Total 774 380.9 1319.3 10.9 2485.2 Source: Census and Statistics Department, Deutsche Bank

7 December 2015

Property

HK Property Monthly


Taking a look at valuations

Figure 83: Developer discount to NAV Figure 84: Landlord discount to NAV

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

Jan

-92

Dec

-93

Dec

-95

Dec

-97

Dec

-99

Dec

-01

Dec

-03

Dec

-05

Dec

-07

Dec

-09

Dec

-11

Dec

-13

Dec

-15

Developer Disc to NAV -1SD Avg +1SD

-80%

-60%

-40%

-20%

0%

20%

40%

Jan

-92

Dec

-93

Dec

-95

Dec

-97

Dec

-99

Dec

-01

Dec

-03

Dec

-05

Dec

-07

Dec

-09

Dec

-11

Dec

-13

Dec

-15

Landlord Disc to NAV -1SD Avg +1SD



Figure 85: Developer P/E Figure 86: Landlord P/E

0

5

10

15

20

25

30

35

Jan

-92

Dec

-93

Dec

-95

Dec

-97

Dec

-99

Dec

-01

Dec

-03

Dec

-05

Dec

-07

Dec

-09

Dec

-11

Dec

-13

Dec

-15

Developer P/E -1SD Avg +1SD

0

5

10

15

20

25

30

35

40

45

50

Jan

-92

Dec

-93

Dec

-95

Dec

-97

Dec

-99

Dec

-01

Dec

-03

Dec

-05

Dec

-07

Dec

-09

Dec

-11

Dec

-13

Dec

-15

Landlord P/E -1SD Avg +1SD



Figure 87: Developer P/B Figure 88: Landlord P/B

0.0

0.5

1.0

1.5

2.0

2.5

Jan

-92

Dec

-93

Dec

-95

Dec

-97

Dec

-99

Dec

-01

Dec

-03

Dec

-05

Dec

-07

Dec

-09

Dec

-11

Dec

-13

Dec

-15

Developer P/B -1SD Avg +1SD

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Jan

-92

Dec

-93

Dec

-95

Dec

-97

Dec

-99

Dec

-01

Dec

-03

Dec

-05

Dec

-07

Dec

-09

Dec

-11

Dec

-13

Dec

-15

Landlord P/B -1SD Avg +1SD



7 December 2015

Property

HK Property Monthly


Figure 89: SHKP – discount to NAV Figure 90: Sino Land – discount to NAV

-80%

-60%

-40%

-20%

0%

20%

40%

Jan

-92

Ap

r-9

3

Jul-

94

Oct

-95

Jan

-97

Ap

r-9

8

Jul-

99

Oct

-00

Jan

-02

Ap

r-0

3

Jul-

04

Oct

-05

Jan

-07

Ap

r-0

8

Jul-

09

Oct

-10

Jan

-12

Ap

r-1

3

Jul-

14

Oct

-15

Discount to NAV -1SD Average +1SD

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

Jan

-92

Jun

-93

Dec

-94

Jun

-96

Dec

-97

Jun

-99

No

v-0

0

May

-02

No

v-0

3

May

-05

No

v-0

6

Ap

r-0

8

Oct

-09

Ap

r-1

1

Oct

-12

Ap

r-1

4

Oct

-15




Figure 91: Henderson – discount to NAV Figure 92: New World Development – discount to NAV

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Jan

-92

Au

g-9

3

Mar

-95

Oct

-96

May

-98

Dec

-99

Jul-

01

Feb

-03

Sep

-04

Ap

r-0

6

No

v-0

7

Jun

-09

Jan

-11

Au

g-1

2

Mar

-14

Oct

-15


-90%

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

Jul-

03

Ap

r-0

4

Jan

-05

Oct

-05

Au

g-0

6

May

-07

Feb

-08

No

v-0

8

Au

g-0

9

Jun

-10

Mar

-11

Dec

-11

Sep

-12

Jul-

13

Ap

r-1

4

Jan

-15

Oct

-15




Figure 93: Hang Lung – discount to NAV Figure 94: CK Property – discount to NAV

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Jan

-92

Au

g-9

3

Mar

-95

Oct

-96

May

-98

Dec

-99

Jul-

01

Feb

-03

Sep

-04

Ap

r-0

6

No

v-0

7

Jun

-09

Jan

-11

Au

g-1

2

Mar

-14

Oct

-15


-55%

-50%

-45%

-40%

-35%

-30%

-25%

Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15




7 December 2015

Property

HK Property Monthly


Figure 95: Kerry – discount to NAV Figure 96: HK Land – discount to NAV

-100%

-50%

0%

50%

100%

150%

200%

250%

Au

g-9

6

Jun

-97

Ap

r-9

8

Feb

-99

Dec

-99

Oct

-00

Au

g-0

1

Jun

-02

Ap

r-0

3

Feb

-04

Dec

-04

Oct

-05

Au

g-0

6

Jun

-07

Ap

r-0

8

Feb

-09

Dec

-09

Oct

-10

Au

g-1

1

Jun

-12

Ap

r-1

3

Feb

-14

Dec

-14

Oct

-15


-80%

-60%

-40%

-20%

0%

20%

40%

Jan

-92

Ap

r-9

3

Jul-

94

Oct

-95

Jan

-97

Ap

r-9

8

Jul-

99

Oct

-00

Jan

-02

Ap

r-0

3

Jul-

04

Oct

-05

Jan

-07

Ap

r-0

8

Jul-

09

Oct

-10

Jan

-12

Ap

r-1

3

Jul-

14

Oct

-15




Figure 97: Wharf – discount to NAV Figure 98: Great Eagle – discount to NAV

-90%

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

Jan

-96

Feb

-97

Mar

-98

Ap

r-9

9

May

-00

Jun

-01

Au

g-0

2

Sep

-03

Oct

-04

No

v-0

5

Dec

-06

Jan

-08

Mar

-09

Ap

r-1

0

May

-11

Jun

-12

Jul-

13

Au

g-1

4

Oct

-15


-90%

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

Oct

-05

Jul-

06

Ap

r-0

7

Dec

-07

Sep

-08

May

-09

Feb

-10

Oct

-10

Jul-

11

Mar

-12

Dec

-12

Au

g-1

3

May

-14

Jan

-15

Oct

-15




Figure 99: Hysan – discount to NAV Figure 100: Link REIT – discount to NAV

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

Jan

-92

Mar

-93

May

-94

Jul-

95

Oct

-96

Dec

-97

Feb

-99

May

-00

Jul-

01

Sep

-02

Dec

-03

Feb

-05

Ap

r-0

6

Jun

-07

Sep

-08

No

v-0

9

Jan

-11

Ap

r-1

2

Jun

-13

Au

g-1

4

Oct

-15


-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

Sep

-11

Dec

-11

Mar

-12

Jun

-12

Sep

-12

Dec

-12

Ap

r-1

3

Jul-

13

Oct

-13

Jan

-14

Ap

r-1

4

Jul-

14

Oct

-14

Jan

-15

Ap

r-1

5

Jul-

15

Oct

-15




7 December 2015

Property

HK Property Monthly


Figure 101: SHKP – PE Figure 102: Sino Land – PE

0

5

10

15

20

25

30

Jan

-92

Ap

r-9

3

Jul-

94

Oct

-95

Jan

-97

Ap

r-9

8

Jul-

99

Oct

-00

Jan

-02

Ap

r-0

3

Jul-

04

Oct

-05

Jan

-07

Ap

r-0

8

Jul-

09

Oct

-10

Jan

-12

Ap

r-1

3

Jul-

14

Oct

-15

PE -1SD Average +1SD

0

5

10

15

20

25

30

Jun

-95

No

v-9

6

Mar

-98

Jul-

99

No

v-0

0

Ap

r-0

2

Au

g-0

3

Dec

-04

May

-06

Sep

-07

Jan

-09

May

-10

Oct

-11

Feb

-13

Jun

-14

Oct

-15




Figure 103: Henderson – PE Figure 104: New World Development – PE

0

10

20

30

40

50

60

70

80

Dec

-93

Jul-

95

Feb

-97

Sep

-98

Mar

-00

Oct

-01

May

-03

No

v-0

4

Jun

-06

Jan

-08

Jul-

09

Feb

-11

Sep

-12

Ap

r-1

4

Oct

-15


0

5

10

15

20

25

30

35

40

45

50

Jul-

03

Ap

r-0

4

Jan

-05

Oct

-05

Au

g-0

6

May

-07

Feb

-08

No

v-0

8

Au

g-0

9

Jun

-10

Mar

-11

Dec

-11

Sep

-12

Jul-

13

Ap

r-1

4

Jan

-15

Oct

-15




Figure 105: Hang Lung – PE Figure 106: CK Property – PE

0

10

20

30

40

50

60

Jan

-92

Au

g-9

3

Mar

-95

Oct

-96

May

-98

Dec

-99

Jul-

01

Feb

-03

Sep

-04

Ap

r-0

6

No

v-0

7

Jun

-09

Jan

-11

Au

g-1

2

Mar

-14

Oct

-15


12

13

14

15

16

17

18

19





7 December 2015

Property

HK Property Monthly


Figure 107: Kerry – PE Figure 108: HK Land – PE

0

5

10

15

20

25

30

35

40

45

Au

g-9

6

Jun

-97

Ap

r-9

8

Feb

-99

Dec

-99

Oct

-00

Au

g-0

1

Jun

-02

Ap

r-0

3

Feb

-04

Dec

-04

Oct

-05

Au

g-0

6

Jun

-07

Ap

r-0

8

Feb

-09

Dec

-09

Oct

-10

Au

g-1

1

Jun

-12

Ap

r-1

3

Feb

-14

Dec

-14

Oct

-15


0

10

20

30

40

50

60

Jan

-92

Ap

r-9

3

Jul-

94

Oct

-95

Jan

-97

Ap

r-9

8

Jul-

99

Oct

-00

Jan

-02

Ap

r-0

3

Jul-

04

Oct

-05

Jan

-07

Ap

r-0

8

Jul-

09

Oct

-10

Jan

-12

Ap

r-1

3

Jul-

14

Oct

-15




Figure 109: Wharf – PE Figure 110: Great Eagle – PE

0

5

10

15

20

25

30

35

40

45

Jan

-96

Feb

-97

Mar

-98

Ap

r-9

9

May

-00

Jul-

01

Au

g-0

2

Sep

-03

Oct

-04

No

v-0

5

Dec

-06

Feb

-08

Mar

-09

Ap

r-1

0

May

-11

Jun

-12

Jul-

13

Sep

-14

Oct

-15


-20

0

20

40

60

80

100

Jan

-96

Mar

-97

May

-98

Jul-

99

Au

g-0

0

Oct

-01

Dec

-02

Feb

-04

Ap

r-0

5

Jun

-06

Au

g-0

7

Oct

-08

Dec

-09

Feb

-11

Ap

r-1

2

Jun

-13

Au

g-1

4

Oct

-15




Figure 111: Hysan – PE Figure 112: Link REIT – PE

0

5

10

15

20

25

30

35

40

Jan

-92

Mar

-93

May

-94

Jul-

95

Oct

-96

Dec

-97

Feb

-99

May

-00

Jul-

01

Sep

-02

Dec

-03

Feb

-05

Ap

r-0

6

Jun

-07

Sep

-08

No

v-0

9

Jan

-11

Ap

r-1

2

Jun

-13

Au

g-1

4

Oct

-15


17

19

21

23

25

27

29

31

Sep

-11

Dec

-11

Mar

-12

Jun

-12

Sep

-12

Dec

-12

Ap

r-1

3

Jul-

13

Oct

-13

Jan

-14

Ap

r-1

4

Jul-

14

Oct

-14

Jan

-15

Ap

r-1

5

Jul-

15

Oct

-15




7 December 2015

Property

HK Property Monthly


Figure 113: SHKP – PB Figure 114: Sino Land – PB

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

Jan

-92

Ap

r-9

3

Jul-

94

Oct

-95

Jan

-97

Ap

r-9

8

Jul-

99

Oct

-00

Jan

-02

Ap

r-0

3

Jul-

04

Oct

-05

Jan

-07

Ap

r-0

8

Jul-

09

Oct

-10

Jan

-12

Ap

r-1

3

Jul-

14

Oct

-15

PB -1SD Average +1SD

0.0

0.5

1.0

1.5

2.0

2.5

Jun

-95

No

v-9

6

Mar

-98

Jul-

99

No

v-0

0

Ap

r-0

2

Au

g-0

3

Dec

-04

May

-06

Sep

-07

Jan

-09

May

-10

Oct

-11

Feb

-13

Jun

-14

Oct

-15




Figure 115: Henderson – PB Figure 116: New World Development – PB

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Dec

-93

Jul-

95

Feb

-97

Sep

-98

Mar

-00

Oct

-01

May

-03

No

v-0

4

Jun

-06

Jan

-08

Jul-

09

Feb

-11

Sep

-12

Ap

r-1

4

Oct

-15


0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Jul-

03

Ap

r-0

4

Jan

-05

Oct

-05

Au

g-0

6

May

-07

Feb

-08

No

v-0

8

Au

g-0

9

Jun

-10

Mar

-11

Dec

-11

Sep

-12

Jul-

13

Ap

r-1

4

Jan

-15

Oct

-15




Figure 117: Hang Lung – PB Figure 118: CK Property – PB

0.0

0.5

1.0

1.5

2.0

2.5

Jan

-92

Au

g-9

3

Mar

-95

Oct

-96

May

-98

Dec

-99

Jul-

01

Feb

-03

Sep

-04

Ap

r-0

6

No

v-0

7

Jun

-09

Jan

-11

Au

g-1

2

Mar

-14

Oct

-15


0.80

0.85

0.90

0.95

1.00

1.05

1.10

1.15

1.20

1.25





7 December 2015

Property

HK Property Monthly


Figure 119: Kerry –PB Figure 120: HK Land – PB

0.0

0.5

1.0

1.5

2.0

2.5

Au

g-9

6

Jun

-97

Ap

r-9

8

Feb

-99

Dec

-99

Oct

-00

Au

g-0

1

Jun

-02

Ap

r-0

3

Feb

-04

Dec

-04

Oct

-05

Au

g-0

6

Jun

-07

Ap

r-0

8

Feb

-09

Dec

-09

Oct

-10

Au

g-1

1

Jun

-12

Ap

r-1

3

Feb

-14

Dec

-14

Oct

-15


0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Jan

-92

Ap

r-9

3

Jul-

94

Oct

-95

Jan

-97

Ap

r-9

8

Jul-

99

Oct

-00

Jan

-02

Ap

r-0

3

Jul-

04

Oct

-05

Jan

-07

Ap

r-0

8

Jul-

09

Oct

-10

Jan

-12

Ap

r-1

3

Jul-

14

Oct

-15




Figure 121: Wharf – PB Figure 122: Great Eagle – PB

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Jan

-96

Feb

-97

Mar

-98

Ap

r-9

9

May

-00

Jul-

01

Au

g-0

2

Sep

-03

Oct

-04

No

v-0

5

Dec

-06

Feb

-08

Mar

-09

Ap

r-1

0

May

-11

Jun

-12

Jul-

13

Sep

-14

Oct

-15


0.0

0.2

0.4

0.6

0.8

1.0

1.2

Jan

-96

Mar

-97

May

-98

Jul-

99

Au

g-0

0

Oct

-01

Dec

-02

Feb

-04

Ap

r-0

5

Jun

-06

Au

g-0

7

Oct

-08

Dec

-09

Feb

-11

Ap

r-1

2

Jun

-13

Au

g-1

4

Oct

-15




Figure 123: Hysan – PB Figure 124: Link REIT – PB

0.0

0.2

0.4

0.6

0.8

1.0

1.2

Jan

-92

Mar

-93

May

-94

Jul-

95

Oct

-96

Dec

-97

Feb

-99

May

-00

Jul-

01

Sep

-02

Dec

-03

Feb

-05

Ap

r-0

6

Jun

-07

Sep

-08

No

v-0

9

Jan

-11

Ap

r-1

2

Jun

-13

Au

g-1

4

Oct

-15


0.6

0.8

1.0

1.2

1.4

1.6

1.8

Dec

-05

Jun

-06

Jan

-07

Jul-

07

Feb

-08

Au

g-0

8

Mar

-09

Oct

-09

Ap

r-1

0

No

v-1

0

May

-11

Dec

-11

Jun

-12

Jan

-13

Au

g-1

3

Feb

-14

Sep

-14

Mar

-15

Oct

-15




7 December 2015

Property

HK Property Monthly


Appendix 1

Important Disclosures

Additional information available upon request *Prices are current as of the end of the previous trading session unless otherwise indicated and are sourced from local exchanges via Reuters, Bloomberg and other vendors . Other information is sourced from Deutsche Bank, subject companies, and other sources. For disclosures pertaining to recommendations or estimates made on securities other than the primary subject of this research, please see the most recently published company report or visit our global disclosure look-up page on our website at http://gm.db.com/ger/disclosure/DisclosureDirectory.eqsr

Analyst Certification

The views expressed in this report accurately reflect the personal views of the undersigned lead analyst about the subject issuers and the securities of those issuers. In addition, the undersigned lead analyst has not and will not receive any compensation for providing a specific recommendation or view in this report. Tony Tsang/Jason Ching

Equity rating key Equity rating dispersion and banking relationships

Buy: Based on a current 12- month view of total share-holder return (TSR = percentage change in share price from current price to projected target price plus pro-jected dividend yield ) , we recommend that investors buy the stock. Sell: Based on a current 12-month view of total share-holder return, we recommend that investors sell the stock Hold: We take a neutral view on the stock 12-months out and, based on this time horizon, do not recommend either a Buy or Sell. Notes:

1. Newly issued research recommendations and target prices always supersede previously published research. 2. Ratings definitions prior to 27 January, 2007 were:

Buy: Expected total return (including dividends) of 10% or more over a 12-month period Hold: Expected total return (including dividends) between -10% and 10% over a 12-month period Sell: Expected total return (including dividends) of -10% or worse over a 12-month period

52 %

37 %

11 %18 %11 % 14 %

050

100150200250300350400450500

Buy Hold Sell

Asia-Pacific Universe

Companies Covered Cos. w/ Banking Relationship

7 December 2015

Property

HK Property Monthly


Regulatory Disclosures

1.Important Additional Conflict Disclosures

Aside from within this report, important conflict disclosures can also be found at https://gm.db.com/equities under the

"Disclosures Lookup" and "Legal" tabs. Investors are strongly encouraged to review this information before investing.

2.Short-Term Trade Ideas

Deutsche Bank equity research analysts sometimes have shorter-term trade ideas (known as SOLAR ideas) that are

consistent or inconsistent with Deutsche Bank's existing longer term ratings. These trade ideas can be found at the

SOLAR link at http://gm.db.com.

7 December 2015

Property

HK Property Monthly


Additional Information

The information and opinions in this report were prepared by Deutsche Bank AG or one of its affiliates (collectively

"Deutsche Bank"). Though the information herein is believed to be reliable and has been obtained from public sources

believed to be reliable, Deutsche Bank makes no representation as to its accuracy or completeness.

Deutsche Bank may consider this report in deciding to trade as principal. It may also engage in transactions, for its own

account or with customers, in a manner inconsistent with the views taken in this research report. Others within

Deutsche Bank, including strategists, sales staff and other analysts, may take views that are inconsistent with those

taken in this research report. Deutsche Bank issues a variety of research products, including fundamental analysis,

equity-linked analysis, quantitative analysis and trade ideas. Recommendations contained in one type of communication

may differ from recommendations contained in others, whether as a result of differing time horizons, methodologies or

otherwise. Deutsche Bank and/or its affiliates may also be holding debt securities of the issuers it writes on.

Analysts are paid in part based on the profitability of Deutsche Bank AG and its affiliates, which includes investment

banking revenues.

Opinions, estimates and projections constitute the current judgment of the author as of the date of this report. They do

not necessarily reflect the opinions of Deutsche Bank and are subject to change without notice. Deutsche Bank has no

obligation to update, modify or amend this report or to otherwise notify a recipient thereof if any opinion, forecast or

estimate contained herein changes or subsequently becomes inaccurate. This report is provided for informational

purposes only. It is not an offer or a solicitation of an offer to buy or sell any financial instruments or to participate in any

particular trading strategy. Target prices are inherently imprecise and a product of the analyst’s judgment. The financial

instruments discussed in this report may not be suitable for all investors and investors must make their own informed

investment decisions. Prices and availability of financial instruments are subject to change without notice and

investment transactions can lead to losses as a result of price fluctuations and other factors. If a financial instrument is

denominated in a currency other than an investor's currency, a change in exchange rates may adversely affect the

investment. Past performance is not necessarily indicative of future results. Unless otherwise indicated, prices are

current as of the end of the previous trading session, and are sourced from local exchanges via Reuters, Bloomberg and

other vendors. Data is sourced from Deutsche Bank, subject companies, and in some cases, other parties.

Macroeconomic fluctuations often account for most of the risks associated with exposures to instruments that promise

to pay fixed or variable interest rates. For an investor who is long fixed rate instruments (thus receiving these cash

flows), increases in interest rates naturally lift the discount factors applied to the expected cash flows and thus cause a

loss. The longer the maturity of a certain cash flow and the higher the move in the discount factor, the higher will be the

loss. Upside surprises in inflation, fiscal funding needs, and FX depreciation rates are among the most common adverse

macroeconomic shocks to receivers. But counterparty exposure, issuer creditworthiness, client segmentation, regulation

(including changes in assets holding limits for different types of investors), changes in tax policies, currency

convertibility (which may constrain currency conversion, repatriation of profits and/or the liquidation of positions), and

settlement issues related to local clearing houses are also important risk factors to be considered. The sensitivity of fixed

income instruments to macroeconomic shocks may be mitigated by indexing the contracted cash flows to inflation, to

FX depreciation, or to specified interest rates – these are common in emerging markets. It is important to note that the

index fixings may -- by construction -- lag or mis-measure the actual move in the underlying variables they are intended

to track. The choice of the proper fixing (or metric) is particularly important in swaps markets, where floating coupon

rates (i.e., coupons indexed to a typically short-dated interest rate reference index) are exchanged for fixed coupons. It is

also important to acknowledge that funding in a currency that differs from the currency in which coupons are

denominated carries FX risk. Naturally, options on swaps (swaptions) also bear the risks typical to options in addition to

the risks related to rates movements.

Derivative transactions involve numerous risks including, among others, market, counterparty default and illiquidity risk.

The appropriateness or otherwise of these products for use by investors is dependent on the investors' own

circumstances including their tax position, their regulatory environment and the nature of their other assets and

liabilities, and as such, investors should take expert legal and financial advice before entering into any transaction similar

7 December 2015

Property

HK Property Monthly


to or inspired by the contents of this publication. The risk of loss in futures trading and options, foreign or domestic, can

be substantial. As a result of the high degree of leverage obtainable in futures and options trading, losses may be

incurred that are greater than the amount of funds initially deposited. Trading in options involves risk and is not suitable

for all investors. Prior to buying or selling an option investors must review the "Characteristics and Risks of Standardized

Options”, at http://www.optionsclearing.com/about/publications/character-risks.jsp. If you are unable to access the

website please contact your Deutsche Bank representative for a copy of this important document.

Participants in foreign exchange transactions may incur risks arising from several factors, including the following: ( i)

exchange rates can be volatile and are subject to large fluctuations; ( ii) the value of currencies may be affected by

numerous market factors, including world and national economic, political and regulatory events, events in equity and

debt markets and changes in interest rates; and (iii) currencies may be subject to devaluation or government imposed

exchange controls which could affect the value of the currency. Investors in securities such as ADRs, whose values are

affected by the currency of an underlying security, effectively assume currency risk.

Unless governing law provides otherwise, all transactions should be executed through the Deutsche Bank entity in the

investor's home jurisdiction.

United States: Approved and/or distributed by Deutsche Bank Securities Incorporated, a member of FINRA, NFA and

SIPC. Non-U.S. analysts may not be associated persons of Deutsche Bank Securities Incorporated and therefore may not

be subject to FINRA regulations concerning communications with subject company, public appearances and securities

held by the analysts.

Germany: Approved and/or distributed by Deutsche Bank AG, a joint stock corporation with limited liability incorporated

in the Federal Republic of Germany with its principal office in Frankfurt am Main. Deutsche Bank AG is authorized under

German Banking Law (competent authority: European Central Bank) and is subject to supervision by the European

Central Bank and by BaFin, Germany’s Federal Financial Supervisory Authority.

United Kingdom: Approved and/or distributed by Deutsche Bank AG acting through its London Branch at Winchester

House, 1 Great Winchester Street, London EC2N 2DB. Deutsche Bank AG in the United Kingdom is authorised by the

Prudential Regulation Authority and is subject to limited regulation by the Prudential Regulation Authority and Financial

Conduct Authority. Details about the extent of our authorisation and regulation are available on request.

Hong Kong: Distributed by Deutsche Bank AG, Hong Kong Branch.

Korea: Distributed by Deutsche Securities Korea Co.

South Africa: Deutsche Bank AG Johannesburg is incorporated in the Federal Republic of Germany (Branch Register

Number in South Africa: 1998/003298/10).

Singapore: by Deutsche Bank AG, Singapore Branch or Deutsche Securities Asia Limited, Singapore Branch (One Raffles

Quay #18-00 South Tower Singapore 048583, +65 6423 8001), which may be contacted in respect of any matters

arising from, or in connection with, this report. Where this report is issued or promulgated in Singapore to a person who

is not an accredited investor, expert investor or institutional investor (as defined in the applicable Singapore laws and

regulations), they accept legal responsibility to such person for its contents.

Japan: Approved and/or distributed by Deutsche Securities Inc.(DSI). Registration number - Registered as a financial

instruments dealer by the Head of the Kanto Local Finance Bureau (Kinsho) No. 117. Member of associations: JSDA,

Type II Financial Instruments Firms Association and The Financial Futures Association of Japan. Commissions and risks

involved in stock transactions - for stock transactions, we charge stock commissions and consumption tax by

multiplying the transaction amount by the commission rate agreed with each customer. Stock transactions can lead to

losses as a result of share price fluctuations and other factors. Transactions in foreign stocks can lead to additional

losses stemming from foreign exchange fluctuations. We may also charge commissions and fees for certain categories

of investment advice, products and services. Recommended investment strategies, products and services carry the risk

of losses to principal and other losses as a result of changes in market and/or economic trends, and/or fluctuations in

market value. Before deciding on the purchase of financial products and/or services, customers should carefully read the

7 December 2015

Property

HK Property Monthly


relevant disclosures, prospectuses and other documentation. "Moody's", "Standard & Poor's", and "Fitch" mentioned in

this report are not registered credit rating agencies in Japan unless Japan or "Nippon" is specifically designated in the

name of the entity. Reports on Japanese listed companies not written by analysts of DSI are written by Deutsche Bank

Group's analysts with the coverage companies specified by DSI. Some of the foreign securities stated on this report are

not disclosed according to the Financial Instruments and Exchange Law of Japan.

Malaysia: Deutsche Bank AG and/or its affiliate(s) may maintain positions in the securities referred to herein and may

from time to time offer those securities for purchase or may have an interest to purchase such securities. Deutsche Bank

may engage in transactions in a manner inconsistent with the views discussed herein.

Qatar: Deutsche Bank AG in the Qatar Financial Centre (registered no. 00032) is regulated by the Qatar Financial Centre

Regulatory Authority. Deutsche Bank AG - QFC Branch may only undertake the financial services activities that fall

within the scope of its existing QFCRA license. Principal place of business in the QFC: Qatar Financial Centre, Tower,

West Bay, Level 5, PO Box 14928, Doha, Qatar. This information has been distributed by Deutsche Bank AG. Related

financial products or services are only available to Business Customers, as defined by the Qatar Financial Centre

Regulatory Authority.

Russia: This information, interpretation and opinions submitted herein are not in the context of, and do not constitute,

any appraisal or evaluation activity requiring a license in the Russian Federation.

Kingdom of Saudi Arabia: Deutsche Securities Saudi Arabia LLC Company, (registered no. 07073-37) is regulated by the

Capital Market Authority. Deutsche Securities Saudi Arabia may only undertake the financial services activities that fall

within the scope of its existing CMA license. Principal place of business in Saudi Arabia: King Fahad Road, Al Olaya

District, P.O. Box 301809, Faisaliah Tower - 17th Floor, 11372 Riyadh, Saudi Arabia.

United Arab Emirates: Deutsche Bank AG in the Dubai International Financial Centre (registered no. 00045) is regulated

by the Dubai Financial Services Authority. Deutsche Bank AG - DIFC Branch may only undertake the financial services

activities that fall within the scope of its existing DFSA license. Principal place of business in the DIFC: Dubai

International Financial Centre, The Gate Village, Building 5, PO Box 504902, Dubai, U.A.E. This information has been

distributed by Deutsche Bank AG. Related financial products or services are only available to Professional Clients, as

defined by the Dubai Financial Services Authority.

Australia: Retail clients should obtain a copy of a Product Disclosure Statement (PDS) relating to any financial product

referred to in this report and consider the PDS before making any decision about whether to acquire the product. Please

refer to Australian specific research disclosures and related information at

https://australia.db.com/australia/content/research-information.html

Australia and New Zealand: This research, and any access to it, is intended only for "wholesale clients" within the

meaning of the Australian Corporations Act and New Zealand Financial Advisors Act respectively.

Additional information relative to securities, other financial products or issuers discussed in this report is available upon

request. This report may not be reproduced, distributed or published by any person for any purpose without Deutsche

Bank's prior written consent. Please cite source when quoting.

Copyright © 2015 Deutsche Bank AG

David Folkerts-Landau Chief Economist and Global Head of Research

Raj Hindocha Global Chief Operating Officer

Research

Marcel Cassard Global Head

FICC Research & Global Macro Economics

Steve Pollard Global Head

Equity Research

Michael Spencer Regional Head

Asia Pacific Research

Ralf Hoffmann Regional Head

Deutsche Bank Research, Germany

Andreas Neubauer Regional Head

Equity Research, Germany

International locations

Deutsche Bank AG

Deutsche Bank Place

Level 16

Corner of Hunter & Phillip Streets

Sydney, NSW 2000

Australia

Tel: (61) 2 8258 1234

Deutsche Bank AG

Große Gallusstraße 10-14

60272 Frankfurt am Main

Germany

Tel: (49) 69 910 00

Deutsche Bank AG

Filiale Hongkong

International Commerce Centre,

1 Austin Road West,Kowloon,

Hong Kong

Tel: (852) 2203 8888

Deutsche Securities Inc.

2-11-1 Nagatacho

Sanno Park Tower

Chiyoda-ku, Tokyo 100-6171

Japan

Tel: (81) 3 5156 6770

Deutsche Bank AG London

1 Great Winchester Street

London EC2N 2EQ

United Kingdom

Tel: (44) 20 7545 8000

Deutsche Bank Securities Inc.

60 Wall Street

New York, NY 10005

United States of America

Tel: (1) 212 250 2500

hk property monthly -...

Documents