Headlines

l  Y’day: NKY -0.39% (Aug 7), HSI -0.63%, SHCOMP +0.75%, KOSPI +1.48%

l  Overnight: Dow +1.3%, SPX +0.27%, Nasdaq -0.39%

l  US: SPX approaching prev all time high

l  US: Stimulus deal continues to be discussed; Mnuchin maintained some kind of deal is possible

l  Macau: CN says travelers entering CN from Macau w/ COVID certificates wont require quarantine

l  Macau: Zhuhai Individual Visitor Scheme will be resumed both from Aug 12

l  HK: Extend social distancing measures to Aug 18 – as expected

l  HK: Li Ka Shing foundation buys back 800,000 shares CK Asset (1113) on Aug 7

l  HK: Rt ↓ to 0.6 today, lowest since June 15^th. 

Today 1 –Japan.  1st trading for Mitsubishi Estate post result.  Mit Estate result stood out achieving 29% of FY guidance (vs more retail focused Mit Fud @ 18% of FY) + rent uptrend in core office. Ave vacancy in building biz flat at 1.13%; avg mthly rent/tsubo ↑ to \27,361 from \27,177.

Today 2 – Hysan reported y’day, maintained div. Virus #’s in HK continue to moderate (Rt ↓ to 0.6 today!!).  I was @ Hysan portf on Saturday & saw multiple (spaced) queues as people waited for stores to open.  62% disc to NAV is 2std dev wider than avg since 2011. 6.3% div yld.  Base rent reversions were positive for office (low teens).  Occupancy steady vs May, 94% retail, 96% office.  Office contribution now greater than retail. 

Finally:  Is virtual reality the future of remote working? Video conferencing alone has its limits. We can’t see or touch anything, can’t go anywhere together as a group, & can’t interact in a way that seems remotely genuine. Virtual reality cld chnge that - & quickly. By creating a virtual location to explore, handing each other documents, working on a project that involves virtual tools or holding up a prototype, walking around a new building & inspecting the design, or interacting in other ways, VR cld be the 1 thing that makes remote work & stay-at-home office interactions more seamless.  W/ VR, you cld decide to meet together anyway - virtually. In what looks like an exact replica of the conference room you normally use, everyone appears to be sitting at a table. It means you can’t hear the kids playing in the other room b/c you are wearing a headset but also b/c you can only see the conference room. What would this do for physical office demand!!  (Tech Radar) 

Some provinces roll out free/disc tickets policy for tourist attractions. Inter-provincial tours recover to 90% of same period ‘19. (The Paper)

Guangzhou lists 4 commercial/resi sites in Zengcheng (2), Yuexiu, Panyu districts. Total start price Rmb9.2b, site area 234,200m². (Guandian)

Ronshine / CIFI JV acq’d a resi site in Minhang, Shanghai for Rmb4.5b, fl px Rmb54,814/m². Other 8 bidders incl Poly Devt, Jinmao, Sunac, Longfor. (The Paper)

CR Land acq’d a mixed site in Chongqing for Rmb1.9b, plan construction area 174,914m²: resi 169,968m², retail 2473m², office 2473m². (Sina)

Shenzhen Govt accelerates urban redevelopments adjacent to the SZ-HK cooperation zone (The Paper)

Guangzhou relaxes home purchase restrictions for qualified talents (Guandian)  qualified talents who have worked in Guangzhou for >6mths can purchase a house.

Beijing government regulates short rental housing (Guanddian)  the operation of short rental housing must be agreed by other property owners in the same community.

CIFI acquires a land parcel in Shanghai (The Paper)  in Minhang District, for  RMB4.5bn with land premium of 40.55%. Average land costs stood at RMB54,814 psm.

Vanke; builds a 23ha pig breeding base in Dongying, Shandong. (The Paper)

Kaisa Jul contract sales Rmb9.5b (+78%YoY), GFA 561,279m² (+50%YoY). Jan-Jul Rmb45.6b (+14%YoY), GFA 2.68m m² (+15%YoY). (Co)

Li Ka Shing Foundation bought total 800,000 CK Asset shrs @ avg HK$41.3669/sh Aug 7. Li Ka-shing’s stake in CK Asset ↑to 35.32% from 35.30%, Victor Li’s stake ↑to 35.39% from 35.37%. (Co)  Clearly the family think the stock is cheap here, though they are now close to their creeping limit.  I maintain a company buyback would be a good idea, with cost of debt below cost of equity.  In HK you must cancel bought back shares as soon as is practically possible.  This would drive EPS, DPS & NAV/share accretion, benefiting all shareholders & would also boost the Li family holding. Its like buying CKA’s assets, at wider than half price.  Seems like a simple risk/reward equation to me.  Surely this would be better for everyone.  We have selling in this name again today. 

207 new homes sold over w/e. (HKET)

SHKP puts 53 units in Regency Bay, Tuen Mun up for sale this Fri, price HK$15,652-19,224/ft². Co already sold 152 units (93% available for sale) for HK$1b since launched. (HKET)

Most HK developers skipped Shouson Hill tender by the US govt (SCMP)  Only CKA is known to have submitted a bid for the property (tender closed July 31).  The plot in Deep Water Bay, which can be redeveloped with up to 70,500 sqf GFA, is valued at HK$3.2-3.5bn.  … not far from the Li family compounds

SHKP to launch 53 units of Regency Bay in Tuen Mun this Fri. (Apple Daily) filed the price list for 53 units of Regency Bay in Tuen Mun. ASP for the new batch is HK$17,747 psf.  So far has sold 152 units of the project for HK$1bn, or HK$18,530 psf.

Stan Group to sell HK$6.5bn of HK props (HK-01) controlled by famed private property investors Mr. TANG Shing Bor, has put up HK$6.5bn of properties for sale in HK year to date, & HK$14bn in past 2yrs per an estimate by HK-01.  The co indicated it controls HK$80bn of assets. Mr. TANG recently said in an Apple Daily interview that the co has encountered near-term liquidity pressure a/f an acqn binge pre pandemic.

West Kowloon land sale derailed by the pandemic (Mingtiandi)  The harbourside Arts, Commerce & Exhibitions (ACE) project has cancelled a tender for bids on the 1.45mn sqf GFA project (retail, hotel & exhibition, supplemented by office and entertainment spaces).

China Resources-Led group buying 65% stake in HK supermkt chain City Super for reportedly $300m. (Mingtiandi)

Co-working space operators tone down gwth plans. Operators are predicted to take up ~200kft² new space this yr (vs 800kft² last yr), given subdued mkt, w/ new take-up xpctd to be driven by partnerships or mngt agreements w/ asset owners, Colliers said. (Straits Times)

Temasek will not proceed w/ its pre-conditional S$4b partial offer for Keppel Corp, which breached a key term of the deal a/f posting S$697.6m 2Q net loss. (Biz Times)

Tuan Sing to sell Robinson Point for S$500m. didn’t disclose the buyer, but said it’s a BVI-incorporated entity that is not related to Tuan Sing. (Straits Times)

Activist Quarz to vote Against ESR-Sabana Singapore REIT merger. (D2D news)

AIMS APAC REIT to Acquire SG Logistics Warehouse for S$129.6m (BBG) entered into Put & Call option to buy asset.  To be funded w/ net proceeds from issuance of perps of S$123.5m & debt S$12m.  To add 0.18 Sg cents to FY20 DPU of 9.50c, bringing it to 9.68c

SCA Property FY FFO per unit A$0.1465, est A$0.1508. FY FFO A$140.8m, ↓0.7%YoY. FY AFFO A$124.3m, ↓2.4%YoY. FY net income A$85.5m, ↓22%YoY. Final distribution/unit A$0.05. Co will not provide FY21 guidance at this time, will continue to tgt a distribution payout ratio of ~100% of AFFO. (Co)

Blackstone acqrs 4 logistics facilities from Daiwa House Industry for Y55b ($500m). (Nikkei RE)

Centre govt approves construction of 1m houses under PMAY (Urban).(India Times)

Blackstone is reportedly in talks to acq Rs127.5b ($1.7b) of Prestige’s assets. Assets incl ready as well as under- construction projects in southern Indian cities. The sale will help Prestige (net debt Rs81.7b in Mar) pay its obligations. (BBG)  Prestige Estates says no event to trigger any disclosure; says co. regularly evaluates opportunities  

COVID19: Philippines recorded its highest single day case of 6,958 y’day.  Is now speculation of extending MECQ past Aug 18 for a month long lockdown on Metro Manila/NCR to ease strain on health care sector.

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