Jan. 24 (Bloomberg) -- Hongkong Land Holdings Ltd., one of the biggest landlords in the city’s Central business district, climbed to record in Singapore trading amid optimism office rents in Hong Kong may be bottoming.
Hongkong Land rose as much as 3.5 percent to $8.08 and traded at S$8.02 as of 4:06 p.m. in Singapore, heading for its highest close on record. About 4.7 million shares changed hand, the most since May 25. The stock climbed 15 percent so far this month, compared with a 2.6 percent gain for the benchmark Straits Times Index.
“We are seeing a return of leasing transaction volume in the Hong Kong office market so there is the expectation that perhaps rents in Central are starting to bottom out,” said Paul Louie, a Hong Kong-based analyst at Nomura Holdings Inc. “The share price has run ahead as the recovery is largely priced in.” Nomura has a neutral rating on Hongkong Land with a share-price forecast of $7.50, according to data compiled by Bloomberg.
Average rental prices in Central, the world’s most expensive place to lease office space, fell about 12 percent last year as banks cut staff and sought cheaper locations on slowing corporate finance activities. Prime offices in Central lease for about HK$98.80 ($12.74) a square foot a month on average at the end of the third quarter, according to Colliers International.
UBS AG, Switzerland’s biggest bank, has agreed to extend its lease for almost 205,000 square feet of space at Two International Financial Centre in Hong Kong’s Central. The bank will continue to lease the eight floors it currently occupies in the city’s second-tallest tower until 2019 at an average monthly rent of about HK$106 a square foot, said two people familiar with knowledge of the deal, who asked not to be identified because the information isn’t public.
To contact the reporter on this story: Jonathan Burgos in Singapore at email@example.com
To contact the editor responsible for this story: Nick Gentle at firstname.lastname@example.org