Group 1 - UBS reports that the Hong Kong real estate sector is starting strong in 2026, with several stocks nearing historical highs [1] - The firm is adopting a more selective approach due to rising valuations, even for stocks with low price-to-book ratios [1] - Preferred stocks include Cheung Kong Property (00013), Sino Land (00083), and Kerry Properties (00683), which have relatively low debt-to-equity ratios and lower risks related to equity issuance [1] Group 2 - UBS believes the market has largely priced in positive factors for residential recovery, such as further interest rate cuts and an influx of talent and students from mainland China, but has not fully recognized the potential benefits of returning immigrants [2] - The firm forecasts over 10% growth in property prices over the next two years, supported by an estimated 321,000 Hong Kong residents applying for BNO visas, Taiwan residency, or Canadian student visas from 2020 to 2025 [2] - UBS anticipates a wave of returning immigrants this year, estimating that if 30% of the immigrant group returns, there will be an additional demand of 13,900 units by 2027, which represents 90% of the first-hand supply and 26% of the total supply [2]

Group 1 - The core view of the report indicates that investors have a positive attitude towards Hong Kong real estate, prioritizing real estate developers, Central office buildings, and luxury retail, while non-essential retail is disappointing [1] - Investors expect property prices to enter an upward cycle this year, with a projected increase of 5% to 10%, and believe that prices have passed the turning point [1] - Approximately 10% of investors are skeptical about the price trends in 2027 and 2028, citing that the rebound in transaction volume is mainly driven by pent-up demand [1] Group 2 - Investors' demand, currently accounting for about 10% to 15% of the market share, depends on rental yields and capital markets, with potential stabilization in residential rents if talent inflow slows [1] - The report highlights that Hong Kong real estate stocks remain attractive in valuation compared to other Asia-Pacific regions, but companies need to demonstrate uniqueness and actual performance to support further stock price revaluation [1] - Investors are optimistic about Central office buildings but have a lukewarm view on the retail sector, favoring companies such as Sun Hung Kai Properties, Hongkong Land, Hang Lung Properties, and Swire Properties [1] Group 3 - There is a divergence in market views on companies such as Sino Land, Henderson Land, and Hysan Development, while there are recommendations to reduce holdings in Link REIT and Wharf Real Estate Investment Company [2] - Less discussion surrounds companies like Cheung Kong Group, Kerry Properties, Regal Real Estate Investment Trust, Champion REIT, and Wharf Holdings [2]