Citi released a Research Report indicating a more pessimistic view on the Hong Kong real estate industry compared to November last year, expecting property prices to fall by 3% this year, mainly due to supply hitting a record high and high interest rates persisting for a longer period, which may prompt developers to expedite price cuts to reduce inventory. In the residential market, Citi expects new home sales and rental transactions to remain strong this year, driven mainly by buyers from mainland China. In the retail shop market, the bank anticipates retail rents to continue declining by about 5% this year. In the office market, Citi believes layoffs and regional competition have led to weak demand, and tenants are very sensitive to costs. With office supply increasing by 3% each year, the vacancy rate for Grade A offices is expected to be 16% this year, while rents are projected to fall by 6% year-on-year. Additionally, Citi favors stocks with visible free cash flow and dividend per share, while companies with high capital expenditure, high debt, or significant retail exposure may lag behind. The bank’s top choices are HENDERSON LAND and SINO LAND.