CLSA has released a research report stating that WHARF REIC (01997) surprised the market by increasing its dividend payout ratio from 65% to 90%. This move, combined with the sale of Wheelock Square, has driven per-share dividend growth, demonstrating management's commitment to enhancing shareholder returns.

The company now offers shareholder return characteristics similar to those of a real estate investment trust. Importantly, management has indicated no intention of lowering the dividend payout ratio. The target price has been raised from HK$40 to HK$42.2, with the "Outperform" rating reaffirmed, and the stock is designated as a top pick.

The firm has revised up its per-share dividend forecasts for WHARF REIC for 2026, 2027, and 2028 by 40.1%, 43.5%, and 43.5%, respectively, reflecting the higher dividend payout ratio and the value-add from the Wheelock Square sale. The report believes that the significantly improved shareholder returns are sufficient to support a re-rating of the stock.