Less than 10% Retail Investors in REITs, HKREITA Calls for More REITs Promotion

• A survey found that asset appreciation, secure source of income after retirement, and capital guarantee are the three major investment goals of Hong Kong investors.
• Currently, only 8.5% individual Hong Kong investors invested in REITs. Over half identified “not familiar with Hong Kong REITs” as the major reason for not interested in REITs, while “high dividend payout” is the most attractive reason for those interested.
• Established today, the Hong Kong REITS Association Limited aims to promote the growth and healthy development of the H-REITs market and raise public awareness towards H-REITs.

The Hong Kong REITS Association Limited (HKREITA), which was officially established today, unveiled the results of an online survey¹ on Hong Kong individual investors’ investment behaviour.

The findings of the online survey revealed that stocks, savings/fixed deposits (HKD) and MPF (mandatory contributions) were the most common investment products among investors, while only 6% of the respondents (or 8.5% of respondents who were investors) were investing in REITs at the time of the survey. A total of 53% of the respondents who said they were not interested in REITs identified “not familiar with Hong Kong REITs” as the major reason. On the other hand, 47% of those who are interested in REITs recognised “high dividend payout” as the most attractive reason for investing in this asset class.

The survey also showed that after learning about the characteristics of REITs, 46% of the respondents indicated a likelihood to invest in REITs in the next 12 months, with an expected return of 6.3% on average. 

Asset appreciation, secure source of income after retirement, and capital guarantee are the three major investment goals of individual investors in the city, according to the study which interviewed about 1,000 Hong Kong residents in April this year. However, 37% of the respondents said their investment returns last year were below 3% and “far from satisfactory”, an indication that their investment targets were not entirely met.

More effort from the industry is needed to foster investors’ understanding of REITs and their ability to deliver both stable dividends and capital growth potential, according to HKREITA. Co-founded by Link Asset Management Limited (Link), Yuexiu REIT Asset Management Limited (Yuexiu REIT) and SF REIT Asset Management Limited (SF REIT), HKREITA aims to propel the H-REITs industry to greater prominence in the capital market by enhancing public awareness towards H-REITs and promoting H-REITs to a broader investor base. The association also calls on all market stakeholders to join hands to elevate the Hong Kong REIT market through multiple channels, such as including REITs in Stock Connect between the Mainland and Hong Kong, with an aim to solidify Hong Kong’s position as an ideal listing destination of REITs and providing investors with more investment choices.

HKREITA concluded that certain investors in Hong Kong are interested in REITs but the awareness of the asset class is not universal. At the same time, the volatility in global stock markets has fuelled the demand for investment products with more stable returns, creating the perfect opportunity to educate investors on the characteristics of REITs, such as stable dividend payout and asset appreciation potential, with an aim to convert REITs into a preferred investment product among Hong Kong investors.

George Hongchoy, Chairman of HKREITA, Executive Director and CEO of Link, said: “As a key international financial centre, Hong Kong possesses multiple advantages that are conducive to the growth of a REIT market. As the founding presidents of the association, we wish that HKREITA can act as an open platform and rally all REIT market practitioners working alongside regulators and other stakeholders to propel the Hong Kong REIT industry to greater prominence among its global peers.”

Lin Deliang, Honorary Founding President of HKREITA and Chairman, Executive Director and CEO of Yuexiu REIT, said: “The launch of the first batch of C-REIT last year brought new inspiration and opportunities to the Hong Kong REIT market. One of the aspirations of HKREITA is to strengthen cross-border communication with relevant organisations in Hong Kong and Mainland China, thereby stimulating the inflow of capital to both the Hong Kong and Mainland REIT markets and providing investors with more REIT investment choices.”

Hubert Chak, Honorary Founding President of HKREITA, Executive Director and CEO of SF REIT, said: “The survey results showed that most Hong Kong investors are looking for stable investment tools with asset appreciation and secure source of income after retirement. REITs are fully capable of meeting their investment goals amidst market volatility. By stepping up the promotion of REITs, particularly its stable dividends and capital growth potential, we hope to raise public awareness towards the asset class and broaden its investor base in order to foster the growth of the industry.”

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Note 1: The Association appointed Cimigo (a market research company) in April to interview through online survey 1,000 Hong Kong residents who are at least 18 years old with monthly household income of $25,000 or above.

For the survey results, please click here.

For the introductory deck of HKREITA, please click here.

High resolution pictures can be downloaded here.

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About HKREITA

HKREITA is a collaborative platform of the city's real estate investment trusts (REITs) sector. The association brings together REIT managers, industry practitioners and professionals working in the REIT sector who share the association’s vision to jointly promote the overall development of the REIT market in Hong Kong. HKREITA seeks to pool ideas and to serve as the representative voice of the REIT sector in Hong Kong, and works closely with policymakers and other stakeholders to boost Hong Kong's position in the global REIT market.

For details, please visit hkreita.com.