Update shared on 14 Dec 2025
Fair value Increased 17%Narrative Update
The analyst fair value estimate for Hongkong Land Holdings has been raised from 7.42 dollars to 8.66 dollars. Analysts attribute this change to a stronger expected profit margin and slightly higher valuation multiples, even though revenue growth assumptions have moderated and the discount rate is marginally higher.
What's in the News
- Hongkong Land has advanced plans to launch its first private real estate fund, the Singapore Central Private Real Estate Fund (SCPREF), which is expected to become Singapore's largest private real estate fund with over SGD 8 billion of assets under management at inception (Key Developments).
- The company will seed SCPREF with its Singapore commercial portfolio and additional assets acquired over time, aiming to create a dedicated platform for prime commercial properties and generate a new fee-based earnings stream (Key Developments).
- Keppel REIT has agreed to acquire Hongkong Land's interest in Marina Bay Financial Centre Tower 3 for about SGD 1.5 billion, a 2% premium to the June 2025 independent valuation. This lifts total capital recycling since 2024 to USD 2.8 billion, around 70% of the USD 4 billion 2027 target (Key Developments).
- With pre-emptive offers on One Raffles Quay and Marina Bay Financial Centre Towers 1 and 2 having lapsed, Hongkong Land plans to transfer its stakes in these properties, along with its 100% interest in One Raffles Link, into SCPREF. This would bring total attributable property value to around SGD 3.9 billion and roughly 3.2 million square feet of prime office space on a 100% basis (Key Developments).
- The SCPREF initiative supports Hongkong Land's long-term strategy to grow assets under management to USD 100 billion by 2035 with significant third-party capital participation. A further announcement on the fund establishment is expected in the first quarter of 2026 (Key Developments).
Valuation Changes
- Fair Value Estimate, raised from $7.42 to $8.66, reflecting a moderate upward revision in intrinsic value.
- Discount Rate, increased slightly from 8.91% to about 9.03%, implying a marginally higher perceived risk or required return.
- Revenue Growth Assumption, reduced significantly from about 15.28% to about 9.53%, indicating a more conservative outlook on top line expansion.
- Net Profit Margin, raised meaningfully from about 46.73% to about 58.25%, signaling expectations of stronger profitability per dollar of revenue.
- Future P/E Multiple, increased from about 13.16x to about 14.57x, suggesting a modestly higher valuation multiple applied to forward earnings.
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