We live in interesting times.  Everyone’s going to be talking office today on the Google WFH till summer 2021 news.  Personally I don’t think the NTT WFH headlines are news (does your firm have 30% of staff in the office?).  If you missed the Laura Cha call last night & want notes LMK – but clearly the big listings have been very good for HKEX.  I wonder if today is the day to buy REIC – more on that later.   

Headlines

l  Y’day: NKY -0.16%, HSI -0.41%, SHCOMP +0.26%, KOSPI +0.79%

l  Overnight: Dow +0.43%, SPX +0.74%, Nasdaq +1.67%

l  COVID: Moderna received 2nd round of US funding for vaccine, begins late-stage trial

l  COVID: Pfizer & BioNTech start later-stage study for vaccine

l  GOLD: Touched all time high against weak dollar & ahead of FED meeting

l  EU: Countries seek to restrict visits to Spain amid coronavirus outbreaks

l  IN/CN: India bans 47 more Chinese apps in India, 275 more under review

l  HK: Tighter virus measures. No in-restaurant dining.  Masks outside even during exercise

l  NZ/HK: Suspends extradition treaty w/ HK in light of national security law.

l  NZ/HK: Will treat military / dual-use goods + tech exports to HK same as it wld to CN

l  TB: Thailand closed today

l  TW: TSMC becomes the world’s 10^th largest stock (+35% MTD)  

l  VN: Vietnam to temporarily suspend Danang flights for 15 days

Google will keep its 200,000 employees WFH until at least July Next Year.

NTT to have 70% of staff WFH, ↑from 50%, per Nikkei. Rival KDDI Corp will do similar (Kyodo News)

Finally:  ~60% of REIT properties are projected to experience high water-stress by 2030, >double the number today, according to a report that Axios had early access to from BlackRock.  They say Investors who fail to price in the cost of adapting to water stress risk being left high & dry (ehm).

Almost all REIT properties in Malaysia, Japan, & Australia, among other countries, will likely be in what are classified as high-risk water zones w/in 10 yrs, per the report. ~ 2/3 of US REIT properties are projected to be in high-risk water zones, double the proportion today. This incls most of the country west of the Mississippi. According to World Bank estimates, global water infrastructure costs are xpctd to ↑ 4x by 2030, to $150bn a yr.  

Water scarcity doesn't automatically mean financial catastrophe.  All of high-income Singapore, for example, is w/in a high-risk water zone today.  Regardless, the report says we all need to prepare now for the financial effects of a drier future. (AXIOS)

Office vacancies in China’s cities soar even as economy reopens. Vacancy rates for prime office bldgs in Shanghai 2Q↑to 20%, & 21% in Shenzhen, both the highest since at least the financial crisis. (BBG)

Beijing 2Q office vacancy rate ↑to 15.5%, the highest since 3Q10, per CBRE. Rent continued to ↓in 2Q, -1.2%MoM; 2019 saw rent -1.4%YoY, biggest ↓since 2010. (Sina)

Hainan proposes new social housing policy (Guandian)  According to the draft, a Haikou household meeting certain criteria (e.g. giving preference to households without ownership of a home) is eligible to buy one social housing unit. The holding period of the social housing unit is 10 years at least.

High-profile propaganda on successful anti-home price speculation from Changsha (the paper) Official media released an article detailing how Changsha has successfully contained home price speculation.

Canadian coffee chain Tim Hortons plan to open 20 new stores in Beijing by end-2020. (China Daily)

California-born board-sports brand Volcom to expand stores in China. (Inside Retail)

Keppel Capital to invest Rmb1.5b to bld 45,000m², its 2^nd data centre in Huizhou, Greater Bay Area. (SCMP)

Wheelock put 34 units in Koko Hills resi project, Cha Kwo Ling up for sale. Sold a unit for HK$62.74m or HK$31,000/ft², both hit highest in the area. (HKET) … but then >> Wheelock closes KOHO Hills showflats  (Apple Daily)  In response to the surge in COVID-19 cases, Wheelock will close its KOKO Hills showflat for 2 days and has cancelled its sales launch of 44 units this Friday.

2 Tuen Mun new resi projects put total 112 more units up for sale.
50 units from SHKP’s Regency Bay, price HK$15,372-21,012/ft² a/f max 22% disc;
62 units from HK Ferry / Empire’s Seacoast Royale, price HK$12,490-17,035/ft² a/f max 6% disc. (HKET) 

20-26 July 2020, total primary sales volume in 32 key cities tracked +14% YoY vs +9% YoY in previous week (CREIS)

Mapletree North Asia Commercial Trust reported Q1 (Jun) update (Co) Festival Walk (FW) retail sales fell 38.6% YoY, while footfall dropped 44.9% YoY. FW retail rental reversion  -10%, or 15% if including short-term renewals. Occupancy was 99.3%.

F&B operator Tsui Wah leases Jordan street shop location (Apple Daily) Tsui Wah leased a street shop location in Jordan for HK$230k per month (HK$50 psf), 42.5% lower than the prior lease struck in 2017.  The new rent is back to level last seen in 2002. 

6 primary market sales transacted on 28 July (HKET) Six primary market transactions were recorded on 28 July, including two luxury apartment at Lai Sun/ Empire Group’s Alto Residences in Tseung Kwan O.  Both units were sold at HK$81mn, or at effective ASP of HK$23.0k psf.

RedMart to occupy 60,000ft² at 34 Boon Leat Terrace in Singapore as a fulfilment centre. (Biz Times)

ESR-REIT’s issue price is S$0.4018 per DRP unit, a 2% disc to volume-weighted avg traded price per ESR-REIT unit. (Co) 

Temasek’s deemed interest in CapitaLand Retail China Trust↓to 36.85% from 37%. (Co)

CapitaLand Retail China Trust entered into a facility agreement which contains a prepayment event if CRCT ceases to be mngd by the Mgr or a wholly owned subsidiary of CapitaLand Financial Ltd or any other entity as may be agreed b/w lender & borrower. (Co)

Charter Hall sells $203m block in Waypoint priced @ A$2.61/sh, 4.4% disc to close. (AFR)

Auckland’s PwC Tower adds 39,000m² premium office space to the mkt. Highest commercial tower block in ACK. (Stuff)

Ingenia purchases Sunnylake Shores Lifestyle Community for A$16m. INA closes FY20 w/ 325 new home settlements despite disruption to sales momentum as Covid-19, just below record 336 settlements achieved in FY19. 179 deposits & contracts on hand at June 30. (Mkt Herald)

NTT to have 70% of staff WFH, ↑from 50%, per Nikkei. Rival KDDI Corp will do similar (Kyodo News)

Daiwa House devping mixed-use bldg near Yokohama Station. (Nikkei RE)

Heiwa acqrs Nihombashi-Kabutocho office bldg from Hulic. (Nikkei RE)

Phoenix Mills opens 1mft² Phoenix Palassio mall in India. (Inside Retail)

E-commerce co Coupang will invest KRW100b ($83m) into its new logistics center in Eumseong, North Chungcheong, total 99,173m², due to be completed in Aug ’21. (Korea Joongang Daily)

* My pa holdings: BAC US, 1 HK, 6 HK, ST SP