REIT ASIAPAC
HONG KONG REITS PERFORMANCE
student protest and the student unions do
not represent the protesters. The apparent
lack of leaders also means that the situation
is particularly fluid.
AGAINST THE HANG SENG INDEX
While REITs initially stayed rangebound at
the start of the protests, they have since fallen
about 16%. However, they remained slightly
positive year-to-date. As the movement has
dragged on, retail sales growth has weakened
throughout June and July. The lack of a
resolution has hit confidence in the short
term. Crucially long term prospects depend
on how the movement is resolved.
2014 Umbrella Movement occupied Admiralty and Mong Kok,
the former being Hong Kong’s political centre and the latter being
Hong Kong’s commercial centre. In 2019, however, protesters
have not mounted any long-term occupation. Even if roads were
blocked, they were cleared in hours. This extends the stamina
of the movement, as protesters go home every night and few
commercial activities have been disrupted for extended periods.
Secondly, the 2014 Umbrella Movement could be described as a
youth movement, but the 2019 protests saw more actions from
other age groups. Granted, the young generation is still at the
forefront. A construction supply shop, for example, wrote in an
article about a 13-year-old boy who bought a helmet with pocket
money. But the older generation has also been more involved. In
the Shatin protest on July 14, multiple video feeds showed older
residents refusing police entry to their buildings.
W H AT W I L L H A P P E N A F T E R 2 0 4 7 ?
For two decades, the major political movements all revert back
to a simple but central question: How should the social contract
between the government and the people in Hong Kong be
arranged?
Since the 1997 handover, Hong Kong has been governed under
the “one country, two systems” protocol, supposedly in place for
50 years until 2047. In 2047, many of the readers of this magazine
and I will be retired. But the 13-year-old boy who bought the
construction helmet will only be 40 years old and will be in his
professional prime. He is, on top of the immediate triggers, trying
to seek an exact clarification on the arrangements after 2047.
This is perhaps the real fuel that has driven the movement into a
second month and beyond.
ORGANISERS RANGE FROM
MOTHERS TO COUNCILLORS
On September 4, Chief Executive Carrie Lam
announced the formal withdrawal of the
extradition bill. It meant that the government
had finally acceded to one of the protesters' five
demands. While this is a positive development,
it has not answered the deeper question of
Hong Kong’s future after 2047. The long-term
investment merits of Hong Kong depend on
when and how this clarification is reached.
Third, the current protests have no visible leaders. In 2014, the
Hong Kong Federation of Students (HKFS) — an alliance of the
public universities’ student unions — was nominally the protest
leader. This was why Carrie Lam, as the then Chief Secretary,
organised a public meeting with the HKFS representatives.
In 2019, while the million-people marches were organised by
the Civil Human Rights Front—a protest organiser with a long
history—many other protests were largely self-organised. These
self-organised protests are happening every weekend in different
districts.
“We counted 15 separate protests from the first million-people
march on June 9 to July 15, with organisers ranging from local
district councillors to a group of Hong Kong mothers.”
About the author: Victor Yeung is Admiral’s founding managing
partner and chief investment officer. Since 2013, he has been
responsible for our overall firm strategy and day-to-day management
of our funds. From 2007 to 2013, Victor was with LaSalle Investment
Management, where he managed the Asia Pacific portion of the
US$10 billion Global Real Estate Securities program and eventually
became its Managing Director, Asia Pacific Securities. He writes
regular columns for various news media in Hong Kong, Singapore and
Taiwan, and he is a co-host of a REIT commentary segment on Hong
Kong’s Now TV. He has written one English and three Chinese books
on REITs and other real estate topics.
The lack of identifiable leaders means
that the government does not have
a negotiation counterparty.
In fact, the university student unions rejected Carrie Lam’s
request to meet, on the grounds that the 2019 protest is not a
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