HK Land

HK Land: UBS tips the stock as among the least-preferred HK stocks on its new Alpha Preferences list. Believes the rental and occupancy of Central offices will continue to be the weakest among the key districts in Hong Kong. Thinks the weak finance sector will dampen leasing demand for Central office space, particularly the top international Grade-A offices in Central. Expects new leasing demand to remain focused on cheaper de-centralized or fringe-Central locations to generate cost savings. Notes HKL's Central commercial exposure accounts for 72% of gross NAV. With HKL trading at a 30% NAV discount, UBS views it factors in expectations for a 15%-20% 2012 rental decline; but sees limited upside on HKL from here due to the challenging macro conditions affecting the potential leasing demand for HKL's Central offices. The house rates the stock at Sell with TP US$5.48. The stock is down 1.1% at US$5.50.