Hongkong Land: Consider Portfolio Optimization And Office Property Market Outlook

seekingalpha06-22

Hongkong Land remains a Buy with potential portfolio optimization moves and the improved outlook for Hong Kong's office property market.HKHGF could engage in a number of value-accretive portfolio ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2445172884?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/483860839/image_483860839.jpg","is_english":true,"pubTime":"2024-06-22 15:20","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2445172884","market":"fut","top_or_hot":-1,"title":"Hongkong Land: Consider Portfolio Optimization And Office Property Market Outlook","media":"seekingalpha","content":"<div>\n<p>Hongkong Land remains a Buy with potential portfolio optimization moves and the improved outlook for Hong Kong's office property market.HKHGF could engage in a number of value-accretive portfolio ...</p>\n\n<a href=\"https://seekingalpha.com/article/4700479-hongkong-land-consider-portfolio-optimization-and-office-property-market-outlook\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Hongkong Land: Consider Portfolio Optimization And Office Property Market Outlook</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nHongkong Land: Consider Portfolio Optimization And Office Property Market Outlook\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-06-22 15:20 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4700479-hongkong-land-consider-portfolio-optimization-and-office-property-market-outlook><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Hongkong Land remains a Buy with potential portfolio optimization moves and the improved outlook for Hong Kong's office property market.HKHGF could engage in a number of value-accretive portfolio ...</p>\n\n<a href=\"https://seekingalpha.com/article/4700479-hongkong-land-consider-portfolio-optimization-and-office-property-market-outlook\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4079","symbol_name":"房地产服务","start_time":0,"source_url":"https://seekingalpha.com/article/4700479-hongkong-land-consider-portfolio-optimization-and-office-property-market-outlook","article_id":"2445172884","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/483860839/image_483860839.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2445172884","pubTimestamp":1719040808,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Hongkong Land remains a Buy with potential portfolio optimization moves and the improved outlook for Hong Kong's office property market.HKHGF could engage in a number of value-accretive portfolio opti","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4079":"房地产服务","CFA.SI":"NikkoAM-STC Asia REIT","HKHGF":"Hongkong Land Holdings Ltd.","JARLF":"Jardine Matheson Holdings Ltd.","JLL":"仲量联行","BK4233":"房地产运营公司","HNGKY":"Hongkong Land Holdings Ltd.","BK4135":"资产管理与托管银行","FHI":"Federated Hermes Inc","BK4206":"工业集团企业","JMHLY":"怡和洋行","BK4205":"房地产经营公司"},"translate_title":"香港置地：考虑投资组合优化及写字楼物业市场前景","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"CFA.SI":1,"FHI":1,"HKHGF":1,"HNGKY":1,"JARLF":1,"JLL":1,"JMHLY":1},"content_text":"Hongkong Land remains a Buy with potential portfolio optimization moves and the improved outlook for Hong Kong's office property market.HKHGF could engage in a number of value-accretive portfolio optimization moves, such as rejuvenating its Landmark Atrium retail asset.The demand-supply dynamics for the Hong Kong office property market have become better, taking into consideration industry statistics, relevant news flow, and the company's recent operating metrics.   IakovKalinin/iStock via Getty Images Elevator Pitch My rating for Hongkong Land Holdings Limited (OTCPK:HKHGF) (OTCPK:HNGKY) [H78:SP] stays as a Buy. Earlier, I wrote about the company's new CEO and its share buybacks in my January 1, 2024 update. With this latest article, my focus is on Hongkong Land's potential portfolio optimization initiatives and the outlook for Hong Kong's office property market. I think that the prospects for the office property segment in Hong Kong have become better, and my opinion is that there is the potential for HKHGF to engage in different portfolio restructuring moves to enhance shareholder value. This explains my decision to stick with a Buy rating for Hongkong Land. The company's shares are traded on the Singapore Exchange and the OTC (Over-The-Counter) market. Hongkong Land's Singapore-listed shares and OTC shares boasted three-month mean daily trading values of around $7 million and $100,000 (source: S&P Capital IQ), respectively. US stockbrokers like Interactive Brokers offer trading services for Singapore-listed shares. Potential Portfolio Optimization Moves Jardine Matheson Holdings Limited (OTCPK:JMHLY) (OTCPK:JARLF) is Hongkong Land's parent with a 53% equity interest. Macquarie published a report (not publicly available) titled \"Macquarie Asia Conference - Key Takeaways\" on May 20, 2024 detailing Jardine Matheson's management comments regarding Hongkong Land at a recent investor event last month. In Macquarie's May 20 research report, it is highlighted that Hongkong Land's new CEO Michael Smith is \"undertaking a strategic review to set priorities\" for the company. In my prior January 2024 write-up, I noted that HKHGF's \"current asset portfolio is concentrated in the Hong Kong market and office properties.\" I also mentioned in my January 1, 2024 article that \"the new CEO will help to diversify the company's geographical and property mix considering his experience.\" I am of the opinion that Hongkong Land could possibly undertake portfolio optimization moves to increase income contribution from non-office assets like retail properties. Notably, Jardine Matheson indicated at the Macquarie Asia Conference in the previous month that HKHGF's \"Hong Kong luxury retail space in the Landmark complex will be refreshed\" as per Macquarie's May 20, 2024 report. At the company's FY 2023 analyst briefing (transcript obtained from S&P Capital IQ) in March this year, Hongkong Land noted that its luxury retail property Landmark Atrium \"remains effectively fully occupied\" and indicated that \"flagship tenant sales have largely returned to pre-pandemic levels\" at this asset. Therefore, it is reasonable to think that there are opportunities for Hongkong Land to rejuvenate the Landmark Atrium property and secure higher rents in the future. Apart from the potential rejuvenation of Landmark Atrium, my view is that HKHGF might also engage in other portfolio restructuring initiatives such as monetizing its office assets and acquiring properties outside of its home market, Hong Kong. Late last year, there was a media report published in The Standard speculating on Hongkong Land's potential sale of its Hong Kong office property, Three Exchange Square. As such, one shouldn't rule out the possibility of HKHGF monetizing a portion of its office portfolio and reinvesting divestment proceeds elsewhere. Separately, Hongkong Land's new CEO Michael Smith has formerly worked as an investment banker in Asia and he was previously in charge of US and European operations for an investment firm. It won't be far-fetched to expect the company's new CEO to spearhead new investments or acquisitions in other parts of Asia (beyond Hong Kong), and in the European and North American markets as well. In a nutshell, there are a number of potential shareholder value enhancement moves for Hongkong Land, considering the various portfolio restructuring possibilities. Hong Kong Office Property Market Outlook The prospects for the Hong Kong office property market and Hongkong Land's office property segment appear to be improving, taking into account multiple indicators. Firstly, commercial real estate services firms have turned positive on Hong Kong's office property market. Jones Lang LaSalle's (JLL) latest research report issued on May 22, 2024 indicated that \"Hong Kong's overall Grade A office market recorded a positive net absorption (my emphasis) of 248,000 sq ft in April\" this year. In JLL's recent late-May article, it is also mentioned that the city's \"new Grade A office in the mid-to long-term supply could decrease (my emphasis) by about 2.0 million sq ft\" due to a change in property mix for certain new projects and the hold-up for other real estate transactions. Earlier, Knight Frank outlined its views in its Hong Kong property market research report for April 2024 that the city's office sector \"has already bottomed\" based on its analysis. In other words, the demand-supply dynamics for the office market in Hong Kong seemed to have turned for the better. Secondly, recent news flow points to more companies either opening new offices in Hong Kong or expanding their office space in the city. A May 7, 2024 article published on the Fund Selector Asia website highlighted that asset manager Federated Hermes (FHI) is planning to set up a new office in Hong Kong to \"strengthen its wholesale distribution efforts in Asia.\" Separately, hedge fund Dymon Capital Asia recently took up more office space in Hong Kong and \"signed a lease for a 7,000 square-foot (650 square-metre) office in Edinburgh Tower in the Landmark commercial complex,\" a Hongkong Land property as per a June 4, 2024 Business Times news report. Thirdly, the most recent quarterly performance for Hongkong Land's Hong Kong office property segment has been decent. According to the company's Q1 2024 business update released in late-May, the vacancy rate for HKHGF's office portfolio in Hong Kong declined by -30 basis points QoQ to 7.1% as of March 31 this year. In summary, the outlook for Hongkong Land's office property operations has become more favorable. Key Risks Investors should take note of two major risk factors for HKHGF. One key risk is that Hongkong Land fails to execute well on portfolio optimization initiatives. The market will most probably be disappointed if HKHGF sells some assets at fire-sale prices or overpays for certain acquisition targets. The other key risk is that HKHGF's office property segment underperforms significantly in the scenario that the supply-demand dynamics for Hong Kong's office property market become unfavorable. Closing Thoughts My view of Hongkong Land's portfolio optimization potential and the Hong Kong office market's outlook is positive. Also, Hongkong Land's valuations have remained attractive with a consensus next twelve months' dividend yield of 6.8% and a trailing P/B multiple of 0.23 times as per S&P Capital IQ data. As such, I have maintained a Buy rating for HKHGF.  Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2445172884"}