Investment summary

We expect Treasury China Trust (TCT) to continue to capitalise on proven asset management strategies to derive revenue growth from its stable investment property portfolio and returns from refurbishment and developments over the next few years. When complete, these will improve sector and geographical diversification and potentially generate a step-change in group revenues. The key in both cases is TCT’s strategy to tap into resilient demographic trends, in particular the growing scale and disposable income of China’s middle class. Risks are managed by avoiding more speculative areas of commercial real estate, and zero exposure to residential property.

Last updated on 04/01/2012

Industry outlook

The core, stabilised investment portfolio has produce three positive quarters of occupancy and rental growth, which we attribute to TCT’s asset management rather than market-related assistance. Market forecasts see PRC GDP growth above 9% this year. Efforts to dampen inflationary pressure and speculation on residential property appear to be taking effect and November saw the Beijing government signal the first monetary loosening for two years.

Last updated on 09/12/2011