Hongkong Land Holdings

[gzbkel]

> Does anyone know where to find information about the number of years left for Hong Kong Land's leasehold properties?

If I am right, HK Land's HK central prime offices are mostly 999 yrs lease.

The WALE is in the results announcement slides.  About 4 yrs, if my memory is right.

I checked the 2011 and 2012 filings on sgx, but cannot find the information. Maybe I missed something.
Its also surprisingly difficult to find this information on the internet.

Perhaps I will try to email IR as butcher suggested.

Up till 10 yrs AR put up in their website. Information is available in earlier ARs.

Indeed, I found it in the 2005 AR. Thanks for that

HK land uses the capitalisation rate method to valuate its properties which I find is a bit misleading, especially when they are using rates as low as 4or 5%..

I calculated the cap rate using operating profit from commercial property divided by commercial property valuation for the past several years, and found that it varies from about 3% to 4.5%. 4.5% is in 2009. Currently it is 3.5%, so compression of cap rate could indeed be a concern.
Currently rental in Hong Kong Central is about 100 HKD psf, which is near the peak just before GFC. Not sure if that is sustainable, with China and banking slowing down.

Current discount to NAV is quite steep, and could be partially due to the above factors. 

Love to hear the thoughts of any buddies familiar with HK properties.

[fatpudge]

Office rental at Central is the sky rocket high

[cyclone]

Hongkong Land set to open US$1.1b Beijing shopping centre this month
Mall will include the first Cheesecake Factory in China’s capital

Zheng Yangpeng
PUBLISHED : Wednesday, 01 November, 2017, 6:45pm
UPDATED : Thursday, 02 November, 2017, 10:25am

Hongkong Land Holdings, the largest commercial landlord in Central, is making its first retail foray in Beijing - a market that drastically differs from its home turf.

The developer will start trial operation of WF Central, a 150,000 square metre retail, dining, hospitality and lifestyle hub in downtown Wangfujing, at the end of November. The US$1.1 billion investment is the company’s first large-scale shopping centre endeavour in China’s capital. It also operates shopping centre in Shanghai, Chengdu and Chongqing.

The company said it envisaged the complex as a Beijing landmark of quality living, by integrating luxury, fashion, food, lifestyle, art and culture, and a 74-room Mandarin Oriental hotel. The retail space is about 50,000 square metres.

Hongkong Land has spent a lot of time and energy on this project. Although it acquired the site in 2011, negotiations to buy the property stretch back more than 10 years.

More details in http://www.scmp.com/property/hong-kong-c...ntre-month

[¯|_(ツ)_/¯]

27 Apr 2020 C&C published a interim management statement for 1Q20.

I should had see it coming... 
28 Apr 2020 all the Jardine company published their interim management statement too

Here it is:
JMH
JSH
JCC
HK Land
Dairy Farm

Stay Home and Stay safe, everyone.

[Choon]

HKL's office rents in HK Central are about double that of their office rents in Singapore.

Any thoughts on whether its HK Central rents are sustainable over the long-term? 

If COVID19 or renewed/never-ending social unrest in HK would cause a watershed change in tenants sentiments and/or cause HK to deteriorate as a financial hub?

[karlmarx]

Until China becomes widely accepted as the global economic, cultural, and military power -- wherein they may feel secure in their position -- it is likely that the mainland will continue to keep tight controls over its financial markets, and other institutions such as media which are key to maintaining the political status quo.

Shanghai and Shenzhen can be international financial centres, and if so, Hong Kong's competitive position will be severely weakened. It will be a repeat of what happens when mainland ports are allowed to compete with HK ports. But China is not yet ready to allow free movement of capital.

So international money which wants to invest in China still do so through HK. And Chinese companies which want to raise international money, and/or do business with international companies, will also do so through HK.

HK will probably continue to broker business between the East and West for the next decade. But who knows if it will still be the same in the very long term.

Assuming HK will still be in business for a long time, the large sell down has made HKL cheap.

https://www.businesstimes.com.sg/stocks/...y-law-risk

[beefjerky]

Dear experts,

I read previously that some of you have questioned the NAV, P/B etc. because of the method they used to value their properties 'capitalisation method?'. I am not trained in accounting and was wondering, is there an alternative and fairer metric I could use to value the stock? Is there a way to strip off this additional valuation? If I'm not wrong, Boustead/Berkshire values their property at cost? How can we do this for this stock?

[karlmarx]

Most properties are valued at about 5% yield, or cap rate. Or to put it in another way, a p/e ratio of 20.

In such a simplified equation, the value of a property = income of property x 20

So if income of property goes down, so does its valuation. And vice versa.

Hence, the 'intrinsic value' of HKL depends on your assumptions about HKL's future. Will it earn higher rents from its offices, and higher profit from its development properties?

HKL's present valuation (p/underlying earning of about 10, excluding revaluations) suggests that its future income is going to come down by half. It is up to an investor to decide if that is true.

[setan]

Most properties are valued at about 5% yield, or cap rate. Or to put it in another way, a p/e ratio of 20.

In such a simplified equation, the value of a property = income of property x 20

So if income of property goes down, so does its valuation. And vice versa.

Hence, the 'intrinsic value' of HKL depends on your assumptions about HKL's future. Will it earn higher rents from its offices, and higher profit from its development properties?

HKL's present valuation (p/underlying earning of about 10, excluding revaluations) suggests that its future income is going to come down by half. It is up to an investor to decide if that is true.

Hi Karlmax,

May I know in your opinion is a reasonable cap rate to invest in a property company for OPMI? Thanks.

[Clement]

A key factor about cap rates is that they need to represent both return on capital as well as return of capital, as depreciation is normally not considered when factoring property net operating income. In the case of Hong Kong, especially with the uncertainties around what happens in 2047, I would probably not be comfortable with the low capitalisation rates used.