Swire Properties:1H17operating data:PP office 15%reversion continues;PP Mall tenant sales turned positive

On August 7, Swire Properties released its 1H17 operating statement. Wesummarize our key takeaways for each segment as well as preview our expectationsfor 1H17 results.

HK office rental portfolio: Pacific Place (PP) is still showing strong rentalreversion in 1H17 at +15% versus 1Q17/2016’s +15%/+14%.

HK retail rental portfolio: Pacific Place Mall showed substantial improvement intenant sales, +2% yoy in 1H17 versus 1Q17/ 2016’s -2%/ -13%.

1H17 results preview: Reports August 17; GSe 24% yoy increase in underlyingprofit to HK$4.4bn amid HK development profit recognition.

We are Buy-rated. Swire Prop trades at 0.71X price-to-last-reported-BVPS vs. 5-yr.

average/-1s.d. of 0.66X/0.58X, and at an 28% discount to FY18E NAV vs. 5-yr.

avg./-1 s.d. of 28%/38%.