Morningstar has issued a research report maintaining its fair value estimate of HK$25 for SWIREPROPERTIES (01972), which it rates as having a narrow economic moat. The firm views the current share price as reasonable, noting that the growth anticipated from the company's HK$100 billion investment plan is already fully reflected in the market.

According to Morningstar, SWIREPROPERTIES' recurring underlying profit is expected to decline by 3% to HK$6.3 billion in 2025. This is primarily attributed to continued weakness in the Hong Kong office market and the cessation of profit contributions from a Miami shopping centre following its sale in mid-2025. Despite this, the dividend per share is projected to increase by 5% to HK$1.15. The firm considers these results to be in line with expectations.

The retail portfolio in mainland China and Hong Kong demonstrated strong performance. Upgrades to the tenant mix have driven healthy growth in tenant sales, which are outperforming the market average. Management indicated that this positive momentum in tenant sales growth continued into the first two months of 2026.

Office leasing activity has shown improvement, benefiting from a recovery in financial markets, particularly the active IPO market in Hong Kong. Morningstar anticipates this will help mitigate the issue of negative rental reversions. However, the firm still expects that a more significant recovery in rents will only materialize from 2027 onwards, as vacancy rates decline further.

Projects under SWIREPROPERTIES' HK$100 billion investment plan for 2023-2032 are progressing steadily. New developments in Beijing and the new Bund project in Shanghai are scheduled to open in 2026. Morningstar expects these new projects to support a compound annual growth rate of approximately 9% in the company's earnings over the next decade.