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<Research>HSBC Research: HK Office Rent Decline Narrows; SWIREPROPERTIES (01972.HK) Liked
Recommend 17 Positive 30 Negative 9 |
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Commercial property rents in Hong Kong remained under pressure in 3Q25, though the rate of decline narrowed further, HSBC Global Research issued a research report saying. Of which, the improvement was particularly evident in Central. Although new supply is expected to enter the market in the near term, improving demand is anticipated to provide some support. Rental declines in the core business district, where financial activities are concentrated, are projected to narrow over the next 12 months. Among office landlords, the broker liked SWIREPROPERTIES (01972.HK) with rating at Buy and a target price of $23.9, as well as Hongkong Land. Hong Kong's office vacancy rate remained higher than many major international cities, with rental income expected to face continued pressure, the broker noted. A peak in new supply is anticipated over the next 12-18 months, including SHK PPT (00016.HK)'s new commercial project in West Kowloon and HYSAN DEV (00014.HK)'s Lee Gardens 8 in Causeway Bay. HSBC Global Research estimated that institutions and enterprises may expand operations or upgrade offices while rents remain low. Market sources indicate that BABA-W (09988.HK) (BABA.US) is in talks to acquire 13 office floors of One Causeway Bay, potentially the largest transaction this year. HSBC Global Research maintained a cautious view on CHAMPION REIT (02778.HK), with rating at Underweight and a target price of $1.71, projecting continued pressure on its DPU. AASTOCKS Financial News Website: www.aastocks.com |
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