Three Things To Like About Hongkong Land

HklandlogoWe Asians love property. So what is there not to like about Hongkong Land (SGX: H78). The company is one of Asia longest established property companies that traces its roots back to 1889. Yes, 1889 – 125 years ago. That is the first thing to like about Hongkong Land – its rich pedigree and its long and impressive track record.

Since the turn of the Millennium, the property developer has increased its book value in almost stepwise fashion from S$12b to S$33b last year. The 8% annual rise in its net assets has been mirrored by the increase in the value of its shares. Over the same period, Hongkong Land has seen its share price rise around 10% a year.

The performance of the company’s assets is thanks to its wide but focussed geographic footprint in fast-growing Asian cities. That is the second thing to like about Hongkong Land – its selectivity. Its list of developments includes 450,000 square metres of properties in Hong Kong’s prime commercial district and major interest in Singapore’s equally valuable Marina Bay Financial District. The company is also exposed to China through developments in key cities such as Shenyang, Beijing, Chengdu and Chongqing.

Hongkong Land is also a decent, but not overly generous, dividend payer. Currently, the dividend yield of 2.9% is unlikely to set pulses racing. It is not too dissimilar to the yield on the Straits Times Index (SGX: ^STI). But couple the yield with the dividend growth rate and the share price appreciation and you have an explosive mixture. That is the third thing to like about Hongkong Land. The total return over the last 14 years has been an impressive 14% a year.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.