Hong Kong has some of the world’s most expensive real estate properties and some of the world’s cheapest real estate equities. Lack of confidence in the appropriate valuation of Hong Kong property and lack of growth in property income have resulted in a continual decline in equity valuations to an average 71% NAV discount (as of 6/19/24).
Yes I agree very thorough analysis. I also like Hongkong Land, especially by holding it through JMH. Funnily enough analysts in the beginning of the year were the most bearish HKL, and the most bullish Link REIT. HKL has been one of the best performers and Link REIT one of the worst so far.
Like someone else mentioned here Great Eagle is also a great property play, although large part of the assets are not IP, but operating assets. But this is just one of the reasons there is so much hidden value there.
Thanks for the excellent analysis. Yes, there is little doubt Hysan's book value is somewhat overstated and while this has some implications for debt/assets etc, hopefully it is more than in the price.
After a suggestion from https://x.com/phil_hk I edited my Hysan comments to mention the impact of the temporary Retail space renovations in progress. I welcome additional feedback about Hysan or any other companies mentioned.
Yeah, I mean it's clear that the market is very sceptical of HK RE book values across the board at the moment. Hysan in particular given it's relatively low P/B for it's higher quality portfolio. We can see all sorts of positive surprises from this level of valuation though so I remain bullish.
Yes I agree very thorough analysis. I also like Hongkong Land, especially by holding it through JMH. Funnily enough analysts in the beginning of the year were the most bearish HKL, and the most bullish Link REIT. HKL has been one of the best performers and Link REIT one of the worst so far.
Like someone else mentioned here Great Eagle is also a great property play, although large part of the assets are not IP, but operating assets. But this is just one of the reasons there is so much hidden value there.
Thanks for the excellent analysis. Yes, there is little doubt Hysan's book value is somewhat overstated and while this has some implications for debt/assets etc, hopefully it is more than in the price.
After a suggestion from https://x.com/phil_hk I edited my Hysan comments to mention the impact of the temporary Retail space renovations in progress. I welcome additional feedback about Hysan or any other companies mentioned.
Yeah, I mean it's clear that the market is very sceptical of HK RE book values across the board at the moment. Hysan in particular given it's relatively low P/B for it's higher quality portfolio. We can see all sorts of positive surprises from this level of valuation though so I remain bullish.
Reversion to mean PB implies all of their share prices double. Or is that too much to ask? Hmmm
Did you take a look at Great Eagle? Looks like cheaper than Hysan.
Did not include Great Eagle because it has high exposure to hotels which are operating assets rather than Investment Property.