I thought that Hong Kong seems to be doing extremely well again despite the slump that persist post COVID and the weakening local retail scene due to the exodus of HongKongers shoppers going to Shenzhen to wine, dine SPA and shopping etc. Good news is that Hong Kong has recorded strong growth in its wealth management business. In 2024, cross-border wealth booked in the city surged by $231 billion to $2.7 trillion, putting Hong Kong is thus on par with Switzerland, the long-time leader in cross-border wealth management, according to Boston Consulting Group Inc.’s latest Global Wealth Report. The surge was the largest in the world that year. From then on, its wealth management continued to flourish and grow from 2025 and even now. Hong Kong also remained a vital gateway to Chinese mainland due to its deep talent pool and long time experience in the wealth management sector. As such, I think that the current slump in its retail and commercial property markets should be bottoming soon with revival in its economy engine.
1. Portfolio Restructuring and Doubling Down on Link REIT.
It has been scary indeed to see the plunge in rental rates in Hong Kong. My Hong Kong work colleagues were telling me all sort of horror stories over the past 2 years on empty shops and sharp drop in commercial rental. However, with the surge in HKEX IPOs over the past year as well as the news on its rapid growth in Wealth Management sector, I would think that green shoots have appeared and that Hong Kong's commercial property slump will desist and rise again. I have began taking profits from my investment portfolios (sold off all my Ping'An and part of my Keppel Ltd stocks after 78% profits surge) and reallocating the funds into Link REIT as well as Amova STC Asia REIT ETF (this also contains HK Link REIT on top of SG REITs).
2. Link REIT
Latest full-year financial interim results showed NAV per unit at around HK$61.19 at 30 Sep 2025. Market price as at 23 January 2026 is HKD35.48 per unit. It is thus trading at a 42% to its NAV. Interestingly, pre-COVID days, Link REIT was trading at around NAV per unit. As such, I believe that there is potential for another 20%-30% capital appreciation. Current distribution yield hovers around 7.4% (as per StockCafe) which also makes it extremely attractive. I am also looking forward to Link REIT IPO of its Singapore Shopping malls.
Parting Thoughts
I have built up around S$80K of Link REIT HKEX position as at 23 January 2026 (Friday) in view of a potential 20%-30% capital appreciation within the next 2 years and a potential IPO of its Singapore shopping malls. Its high distribution yield of 7.4% is also very tempting. Anyway, the above are my personal thoughts.
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