HK retail industry recovery remains solid. The value of total retail sales in January 2018 increased by 4.1% yoy, recorded the 11th consecutive months of year-over-year growth, which signal a sign of recovery in consumer spending of inbound tourism. Besides, the relatively stronger RMB has boosted the per capita spending of mainland visitors as RMB/HKD has appreciated over 10% since 2017 on dollar’s weakness. According to the Hong Kong Tourism Board, although January tourist arrivals slid yoy, the value of sales of jewellery and cosmetic product still recorded a solid 10 to 20% yoy growth. Wharf Real Estate Investment Company Limited (1997), a spin-off from diversified property company Wharf Holdings, currently holds and operates a portfolio of six premium quality properties in Hong Kong, including Harbour City, Times Square, Plaza Hollywood, Crawford House, Wheelock House and the former Murray Building (which is currently undergoing conversion into a hotel, The Murray). The rental revenue growth of its Harbour City has outpaced the industry peers significantly in the FY17 amid higher percentage rent provisions and an improving consumer spending from mainland visitors driven by RMB appreciation. Besides, revenue from its two premium office premises in Central also recorded a solid 15% yoy growth, as rental revenue from renewal lease increased. Wharf REIC’s payout ratio currently at 65%, with an above-industry dividend yield of 3.8%. Wharf REIC is our top pick in the HK property investment sector, we advise investors to accumulate the shares as a long-term holding.