HongKong Land: CLSA raised its TP by US$0.50 to US$9.20 and maintains its Outperform rating, highlighting that Hongkong Land is expected to benefit from the tightest office market since 2Q08.
Central rents were up 5.6% q/q in 2Q, the strongest growth since 2Q11 as vacancies dropped to just 1.7% in 1H15, driven by expansion and relocation requirements in the finance industry and mainland demand.
With limited supply in other decentralised hubs, the house expects bargaining power to shift back to landlords and for Central rents to accelerate faster to +12% in 2H15.
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