Signs of Warmth Appear in HK Property Market, Local Highlights in Mainland Developer Sales

Overview

This is a daily highlight tracking report on the real estate market in Hong Kong and Mainland China released by HSBC (data as of close on April 24, 2026). The report summarizes key recent market dynamics in the two regions via news abstracts: In Hong Kong, strong new launch sales drove market sentiment recovery, with secondary market transaction volume rebounding MoM. In the mainland, approval of the first batch of commercial REITs marked market expansion, while high-end improvement projects in Shenzhen and Hangzhou recorded impressive sell-through performance, though macro-level land transfer revenue remained in a YoY decline range. The report also includes valuation summaries for covered targets, NAV discount charts, and individual stock performance tracking.

Core views

Short-term Recovery in HK Property Market: According to Midland data, the top 10 most popular estates in Hong Kong recorded 13 second-hand trades over the past weekend (April 25-26), up 30% MoM. The new launch market performed even stronger, with over 330 new trades over the weekend, improving overall market sentiment and trading atmosphere. Henderson, Sino Group and others cooperated project Harbour Grand Phase 1 launched 218 units in the first round, all sold out, raising nearly HKD 1.64 billion; New World Development and MTR collaborated Tai Wai Park View Court Phase III added push 75 units, all sold out, involving approx. HKD 790 million. Policy and Sales Highlights in Mainland: CSRC and SSE approved the first batch of 4 commercial REITs, totaling planned fundraising of RMB 19.3 billion, underlying assets covering shopping malls, office buildings and outlets, marking the formal expansion of the REITs market into the commercial real estate sector. On the sales front, CMSK and China Resources Land's Shenzhen Bao'an Muliitu project first opening recorded over RMB 6 billion in sales, an 188 sqm four-bedroom unit sold out within two hours; Binjiang Group and Gemdale's collaboration in Xiaoshan, Hangzhou first opening sell-through rate reached 94%, contract value over RMB 2 billion, showing core city high-end improvement demand remains strong. Macro and Land Data Weaker: Despite local sales heating up, Ministry of Finance data shows Q1 2026 nationwide land use right grant revenue was RMB 518 billion, down 24% YoY; local government fund budget income was RMB 660 billion, down 19% YoY. But concurrently nationwide general public budget revenue was RMB 6.2 trillion, up 2.4% YoY, creating the fastest growth rate in three years for the same period, indicating tax revenues stabilized in overall fiscal income structure. Valuation Level: As of data date, covered HK and mainland developers average NAV discount is approx. 52%, forward PE in 9.5-10.5x range, overall valuation remains at historical lows. Chart shows industry PB has dropped from approx. 0.8-0.9x in 2010-2011 to 0.3-0.4x level in 2024-2025, below mean and close to -1 standard deviation line.

Analysis framework

This report adopts bottom-up news event driven tracking method, using high-frequency micro sales data to perceive marginal changes in market temperature. Specifically, the report focuses on tracking sell-through rates and sell-out situation of initial pushes for hot HK new launches (e.g., Harbour Grand, Park View Court), and high-end project opening performance in core Tier 1 and 2 cities in mainland China (e.g., Shenzhen Bao'an, Hangzhou Xiaoshan projects), as basis for judging local demand vitality. In macro cross-verification, the report compares micro hot sale phenomena with Ministry of Finance published macro land transfer revenue data - despite local project heat, national land transfer income still down 24% YoY, thereby revealing structural characteristics of market recovery: i.e., demand recovery mainly concentrated in quality improvement projects in core cities, while extensive lower-tier markets and land finance remain under pressure. Valuation tracking level, the report uses long-cycle time series charts (since 2010) across three dimensions of NAV discount, PB and forward PE, combined with mean and ±1 standard deviation intervals, to judge current sector valuation is at historical bottom area. This method of verifying high-frequency micro data with macro fiscal data and supplementing with long-cycle valuation anchor to judge sector bottom is the core analysis framework for such tracking reports.

Methodology notes

• Valuation MethodNAV Net Asset Value Method

  NAV Discount

  NAV refers to net asset value, which is per-share net asset value obtained by revaluing real estate company land reserves and ongoing projects at current market value. Stock price discount magnitude relative to NAV reflects market pessimism/optimism about company asset liquidity capability and profit prospects. Average NAV discount for developers in report approx. 52%, meaning market offers approx. half asset valuation, usually viewed as one signal industry in bottom area.

• Valuation MethodPB valuation

  Price-to-Book Ratio (PB) and Historical Standard Deviation Channel

  PB is ratio of stock price to per-share net asset. Report draws PB trend chart from 2010 to present, overlaying mean and ±1 standard deviation lines, to measure relative position of current valuation in historical cycle. Current PB approx. 0.4x, close to -1 standard deviation, indicates valuation has fallen to historically rare low interval.

• Industry/Industrial Analysis FrameworkVolume and Price Breakdown

  Sell-through Rate

  Sell-through rate refers to proportion of actual sold units to total pushed units after project opening, is core high-frequency indicator measuring real estate project market acceptance. Report tracks new launch sell-through rate (e.g. Hangzhou project 94% sell-through) to judge real demand heat for specific cities or products.

• Industry/Industrial Analysis FrameworkSupply and Demand Framework

  Land Transfer Revenue Growth Rate

  Land transfer revenue is local government land sales income, its YoY growth rate reflects real estate enterprise willingness to take land and upstream supply side prosperity. Report cites Ministry of Finance data pointing land transfer revenue down 24% YoY, contrasting with micro project heat, revealing industry supply side (especially non-core cities) still in contraction state.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• New World Development (17 HK)

  Co-developed Tai Wai Park View Court Phase III 75 unit add-on push fully sold out, reflecting market appeal of its HK projects

  Strengths

  Strong sell-through capability in core area projects, fast cash realization

• Henderson Land (12 HK)

  Participated cooperation Harbour Grand Phase 1 first round 218 units fully sold out, raised HKD 1.64 billion

• CMSK and China Resources Land (1109 HK)

  Cooperative Shenzhen Bao'an Muliitu project first opening recorded over RMB 6 billion sales, validating core city high-end improvement demand

  Strengths

  Project pricing capability strong (avg price 140k/sqm), high brand premium

• Binjiang Group and Gemdale

  Cooperative Hangzhou Xiaoshan project first opening sell-through rate reached 94%, contract amount over RMB 2 billion

  Strengths

  Hangzhou local high-end market sell-through capability outstanding

Key data

• HK Top 10 Estates Weekend Second-hand Transaction MoM+30%Recorded 13 trades, up 30% MoM
• Park View Court Phase III Second Round Sales AmountApproximately HKD 790 million75 units fully sold out, single unit price 7.89 million to 14.4 million HKD
• Harbour Grand First Round Sales AmountApproximately HKD 1.64 billion218 units fully sold out
• 2026 Q1 Land Transfer Revenue YoY-24%Amount is RMB 518 billion
• First Batch Commercial REITs Planned Fundraising ScaleRMB 19.3 billionTotal 4 REITs approved
• CMSK/China Resources Shenzhen Project First Opening SalesOver RMB 6 billionAvg price approx. 140,000 RMB/sqm
• Binjiang/Gemdale Hangzhou Project Sell-through Rate94%Contract amount over RMB 2 billion
• Developer Average NAV DiscountApprox. -52%Based on HSBC covered target valuation table

Impact & implications

Report believes strong sell-through of HK new launch market helps improve overall property market sentiment and transaction cash flow, core city quality projects remain attractive. Approval of mainland first batch commercial REITs provides new financing and exit channels for commercial real estate, expected to improve related developer asset liquidity. However, significant decline in national land transfer revenue indicates industry overall still in deep adjustment and inventory reduction stage, recovery more presents structural, local characteristic. For covered targets, developers with core city quality project reserves and strong development capabilities (e.g., China Resources Land, CMSK) expected to benefit from release of this high-end improvement demand wave.

What to watch

• Whether subsequent rounds of HK new launch sales sell-through rate continues
• Progress of mainland first batch commercial REITs fundraising and subsequent approval rhythm
• Marginal change trend of national land transfer revenue growth rate