Kerry Properties (0683.HK): Asia Financials Corp Day Takeaways: Focus on prices over volume for HK DP. Proactive in landbank replenishment

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Kerry Properties (0683.HK): Asia Financials Corp Day Takeaways: Focus on prices over volume for HK DP. Proactive in landbank replenishment

Goldman Sachs Kerry Properties (0683.HK)

helped by contribution from higher-margin Mont Verra and their successful ASP hike

by single-digit % batch-by-batch amid better housing market sentiment (i.e., the

Centaline index +9.7% YTD). Looking ahead, they are not in rush to sell more units.

As for mainland China DP, they are launching the villa units at Shanghai Jinling

Residences in 2H26E. Inventory destocking in other mainland Chinese cities

remained slow in general.

n Remain proactive in HK DP landbank replenishment - Kerry has been proactive in

HK DP land bidding and spent HK$2.2bn in total to acquired 3 sites ytd: (1) Shau Kei

Wan site with 131k sqft GFA for HK$1.4bn land premium; (2) Mid-Levels West site

with 39k sqft GFA for HK$354mn consideration; and (3) Kowloon Tong site with ~25k

sqft GFA for HK$430mn consideration. All of these projects are high-end

positioning, and they expect another 4-5 years before completion. Looking ahead,

they remain keen to acquire more landbank at reasonable prices, targeting

double-digit % profit margin.

n Mixed IP performance in mainland China and Hong Kong - Office market

remained under pressure in mainland China where the company managed to keep

its overall portfolio occupancy stable at ~90% yet with negative rental reversion.

Meanwhile, management views the decline in early-leasing negotiations as a positive

sign of tenants’ gradually improving financial positions. Retail rental portfolio

performed slightly better, supported by yoy growth in overall tenant sales, despite a

slowdown in momentum since Mar. Occupancy remained stable at ~90%, though