Citi released a research report stating that it believes investors have already looked past the Hong Kong property market's weak performance last year, shifting their focus instead to the upside potential for property prices, profit margins, and sales volumes in 2026 and 2027. Other key focuses include plans to accelerate investments aimed at boosting net asset value, and a polarized rental outlook that favors retail properties (with luxury showing positive growth) and Central office spaces (where negative trends are easing) over retail/office spaces in surrounding areas (which remain in negative growth territory).

Citi believes that, compared to real estate investment trusts (REITs), developers exhibit greater upside potential for earnings per share (EPS) from 2026 to 2027. This is primarily attributed to improved profit margins from property sales due to rising home prices, along with potentially value-accretive new land acquisitions. Recommended stocks include Sun Hung Kai Properties (00016), Sino Land (00083), Henderson Land (00012) (post-March), and Hang Lung Properties (00101).

Regarding dividends, Citi indicated that Swire Properties (01972) and Hongkong Land have committed to achieving mid-single-digit year-on-year growth. For Wharf REIC (01997), any growth in dividend per share would mainly stem from interest cost savings under a stable 65% payout ratio. Dividends for Sun Hung Kai Properties, CK Asset Holdings (01113), Sino Land, Kerry Properties (00683), Hang Lung Properties, Hysan Development (00014), and Wharf Holdings (00004) are expected to remain stable. The dividend outlook for Henderson Land, which is celebrating its 50th anniversary, is viewed as contentious.

For Link REIT (00823), Fortune REIT (00778), and Champion REIT (02778), distribution per unit is forecast to decline due to negative rental reversion.

On the earnings front, Citi anticipates growth for Hongkong Land, Wharf REIC, and Fortune REIT. Earnings for Sun Hung Kai Properties, Sino Land, CK Asset Holdings, and Hysan Development are expected to be broadly stable. Hang Lung Properties and Swire Properties are projected to see a year-on-year decline of 0% to 5%, although conditions are expected to improve in the second half of 2025 due to better retail turnover rents. Performance is expected to be weaker for Kerry Properties (a 15-20% decline, in line with expectations), Henderson Land (a 40% decline, due to factors like the absence of disposal gains), Champion REIT (a 10% decline), and Link REIT.