HK Land

HK Land: Deutsche downgrades to Sell from Hold with US$4.40 TP. House cites expectation of weakening HK Office market ahead, with corporate hiring expectations turning cautious in light of a deteriorating macro environment, believe rents in the HK office market have peaked and are now heading into a downturn phase.

While house expect the imminent impact on passing rents to be relatively mild in 2012, see NAV coming under pressure on cap rate decompression. House lower NAV estimate to US$6.77/share and target price to US$4.4, pegging TP at a 30% discount to NAV.