[ET Net News Agency, 10 January 2020] J.P. Morgan raised its target price for Wharf
REIC (01997) to HK$42.1 from HK$33 and maintained its "underweight" rating.
The research house said Hong Kong retail and Harbour City's passing rents are at the
highest level despite the sharp slowdown in retail sales. JPM believes supportive policies
for China's domestic consumption are likely to be at the expense of Hong Kong retail
sales. Further tenant reshuffling will need to be done to focus more on domestic
consumption, implying potentially lower or negative rental reversions.
JPM sees short-term downside risk on earnings and dividends. There is also a potential
loss of market share to Sun Hung Kai Properties' (00016) new project in West Kowloon and
New World Development's (00017) Victoria Dockside in the longer run. (KL)