Core Viewpoint - Citi expects the Hong Kong real estate market to recover further in 2024, with a projected increase of 3% after hitting a low in 2025, entering an upward cycle [1] Group 1: Market Outlook - Hong Kong property prices are entering an upward cycle, with new sales profit margins improving, currently ranging from 5% to 9%, and net asset values having upward potential [1] - Retail sales are showing a positive trend, with luxury goods outperforming the market, while the mass market has stabilized since May 2023, with expectations of a stable recovery starting in the second half of 2026 [1] Group 2: Office Space and Construction - The completion of office buildings is expected to reach a record high in 2025, with increased competition anticipated in 2026; however, core area Grade A office spaces are expected to perform steadily [1] Group 3: Corporate Financial Health - Listed companies are streamlining operations, actively managing capital cycles, reducing debt, and lowering capital expenditure and financing costs, which should support cash flow for growth under stable dividends [1] - Increased investment sentiment, along with changes in leadership and the smooth transition of new strategies, are contributing factors to the positive outlook for the Hong Kong real estate market [1]

Core Viewpoint - Citi's report is optimistic about the Hong Kong real estate market recovering after hitting a low in 2025, with further recovery expected in 2026 due to several factors [1] Group 1: Housing Market - Housing prices are entering an upward cycle, with new sales profit margins improving (currently between 5% to 9%) and net asset values having room for growth [1] - A forecasted 3% increase in residential prices for 2026, with a similar 3% increase expected in 2025, indicating the start of a multi-year upward trend [1] Group 2: Retail Sales - Luxury goods are outperforming the broader market, while the mass market is expected to stabilize starting May 2025, with a recovery anticipated from the second half of 2026 [1] Group 3: Office Space - The completion of office buildings is expected to reach a record high in 2025, leading to increased competition in 2026; however, core area Grade A office buildings are expected to perform steadily [1] Group 4: Corporate Financial Health - Listed companies are becoming more streamlined, with active capital circulation, reduced debt, and lower capital expenditure and financing costs, which should support growth through stable dividends and cash flow [1] Group 5: Investment Sentiment - There is a rebound in investment willingness, alongside smooth transitions in leadership and new strategies among some companies [1] Group 6: Preferred Stocks - Citi's preferred stocks include Hysan Development, Hang Lung Properties, New World Development, Henderson Land, and Link REIT [1]