Morningstar on Friday named its top picks in real estate equities for the coming year, including two based in Hong Kong,
Current top picks in the real estate sector are Cheung Kong Property Holdings, China Overseas Land & Investment, and Simon Property Group, based in New York City and New Jersey.
Cheung Kong Property Holdings, which deals in property development and infrastructure investments, is a good bet for investors because of its strong operational capability and access to merger and acquisition opportunities, which will enable it to acquire a large-scale project portfolio, Morningstar says.
China Overseas Land & Investment, another property development and infrastructure investment organization, focuses on quickly turning around assets and maintaining a strong balance sheet, leaving ample opportunities for countercyclical land acquisitions, Morningstar explains.
Simon Property Group specializes in shopping centers and outlet malls. Morningstar says the company is doing a good job of fighting e-commerce by operating high-quality properties that are in demand by retailers and have consistent rental growth.
Overall, Morningstar “continues to view themes in commercial real estate as generally defensive in nature, with lingering concerns about increasing bond yields pressuring property stocks globally by double-digit percentages.
“However," it continues, "underlying performance has remained healthy overall, as real estate investment trusts have been focused on repositioning and strengthening their portfolios, deleveraging, and capital recycling.”