EUR 850.00 For Business Accounts Only

Morningstar | With scale and dominance, Sun Hung Kai Properties is a bellwether of the Hong Kong property sector.

Sun Hung Kai Properties is the leading property developer in Hong Kong. While others may specialise in certain sectors--for example, Cheung Kong in mass residential and Swire in office--SHKP is a significant player in all sectors of the city’s property market. SHKP's sheer scale and dominance translate into a formidable competitive advantage in a highly consolidated Hong Kong property market. SHKP is one of the city’s largest holders of retail and office properties; the underlying economic growth positions the company’s investment property assets to generate solid rental growth. We believe SHKP's established assets in well-located areas under single-landlord management will remain attractive investment for wholesale property investors, supporting asset values.The stock of Hong Kong's prime office space is far below that of similar financial centres. New supplies are being added over the next few years, but they will be not be in SHKP's core market; rather, they will mostly be located in Hong Kong's Kowloon East district. Infrastructure investments by the Hong Kong government will further integrate the city with its neighbours across the Pearl River Delta and encourage the growth of new towns in the city’s outlying areas. The company’s portfolio of regional mall assets is well placed to serve an increasing suburban population, as well as a larger number of day-trip tourists from across the border. SHKP has a competitive advantage in sourcing land supplies in Hong Kong. First, as a result of the company’s long operating history, it is a major owner of industrial and agriculture assets suitable for conversion. Second, the city's land market is dominated by a group of major developers with significant power to dictate the amount of supplies coming into the market. While Hong Kong's residential property market may be at a cyclical high, we think SHKP can successfully navigate any difficulties ahead and emerge unscathed as the city's leading developer.In China, SHKP has established itself as the purveyor of high-end commercial developments and a premium residential builder. However, its operations do not benefit from a sustainable competitive advantage.