5 Quick Things Investors Should Learn About Hongkong Land Holdings Limited

Hongkong Land Holdings Limited (SGX: H78) is one of the cool companies which shares its earnings webcast (the link is here).

Hongkong Land is a leading property investment, management, and development group with operations primarily in Hong Kong, Singapore, and mainland China. Its business can be segmented into the commercial office rental market and residential real estate development.

You can read more about Hongkong Land here.

What’s the story?

Below are five useful things I learned from listening to Hongkong Land’s fourth quarter earnings webcast for the financial year 2014:

  1. Hongkong Land celebrated its 125th anniversary year in 2014. The company closed the year with an attributable interest in more than 8 million square feet of property. By country, the largest commercial property space came from Hongkong (4.9 million square feet) while Singapore came in second with 1.8 million square feet. Meanwhile, the office segment made up close to 6.7 million square feet of space.
  2. General vacancy for the Grade “A” office market in Central (Hong Kong) was 3.7% and is expected to be around this level over the next five years; this trend may support modest rental growth.
  3. On another note, the Hong Kong Central Grade “A” Office Rental Index was relatively flat compared to last year, but was still down from its 2011 high. As a result, the vacancy level for Hongkong Land was 5.4% in 2014 as the company worked to renew its expiring leases from 2011. Y.K. Pang, Chief Executive Officer for Hongkong Land, acknowledged that Hongkong Land’s vacancy levels is higher than the general market, but emphasized the company’s focus on yield.
  4. On the other hand, Hongkong land managed to keep a 0% year-end vacancy for its Central (Hong Kong) retail portfolio – even managing to bump up rental rates by 6% to HK$ 214 per square feet.
  5. At the Singapore front, Hongkong Land’s stake includes a 100% ownership in One Raffles Link and a 33% stake each for One Raffles Quay and the Marina Bay Financial Center. Significant supply is expected to be added in 2016 for the Singapore Central Business District (CDB), possibly leading to higher vacancies in 2016. Currently, vacancies for the Grade “A” office market at Singapore CDB area is 6.1%. Comparatively, Hongkong Land’s portfolio in Singapore had a vacancy level of just 1.7%.

Foolish takeaway

To buy and hold for a company for the long term also means keeping up with developments in the company.

The access to management teams via webcast gives the Foolish investor a fair chance to judge for themselves on whether they would like to be invested alongside the management teams that they have chosen. It also helps us put together a more complete thesis around the company and keep up with developments in its industry.

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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 contributor Chin Hui Leong doesn’t own shares in any companies mentioned.