A visitor to Hong Kong gives a fair picture

Merry Christmas 2025

A quarter century already …

Christ and Muhammad, a history lesson | Brigitte Gabriel

 

On this day, the birth day of Christ, the prophet. And King. And consider what Muhammad took from the Old Testament to cobble together his “recitation”, his “Koran”. 

And of course a Merry Christmas to One and All! 🥂❤️🎉🎄

The new Middle East | Dan Schueftan

Broadcaster Jonathan Sacerdoti speaks to professor Dan Schueftan.

I’ve posted Dan Schueftan before. 

Many will find him too… Right Wing. I’d rather call him Sound. Robust. Based. 

Some of his points:

In the Middle East you have to be strong. And you have to show your strength. If you are weak and seen to be weak you risk attack. Israel has shown its strength since October 7. It has come out of two + years of war much stronger. 

If someone is not afraid of you, you have to be afraid of them. You can’t appease. 

Israel has come out of this latest war much stronger. It has weakened Iran and all its proxies. Weakened Syrian Jihadist forces. 

 Arab countries support Israel because they’re decimating their strongest enemies, the Muslim Brotherhood. But publicly they have to diss on Israel because that’s what the Arab Street expects. 

“I don’t like the Jews or Jewish society — too noisy, too messy. But I Love them.” 

Meantime western countries like Britain, the EU, Australia and even the U.S. allow the Muslim Brotherhood free rein, with its dozens of allied bodies. Which Arab countries do not allow. They ban the Brotherhood. They tell us we must do the same. We ignore them. Because we are smarter! We know more than all these Muslim states.... Right. 

From the Show Notes:

Condemned by mobs on the streets of the West, denounced by governments across Europe and beyond, and vilified by the United Nations and its satellite institutions, Israel might nevertheless be in a stronger strategic position than at any point in its history.
 
Two years after October 7th, Israel’s international standing has deteriorated even as its regional power has expanded. What appears in Western capitals as isolation and moral failure is understood very differently in the Middle East, where strength is measured not by approval but by the capacity to act, to endure condemnation, and to defeat enemies who interpret restraint as weakness.

This discussion moves beyond the battlefield to examine why Europe has drifted from strategic thinking into ideological paralysis, why progressive politics treats self defence as a moral failure, and why Israel’s greatest strength lies not in its political leadership but in a society willing to fight, endure and rebuild without illusions.

👁‍🗨 Watch if you want to understand why Israel’s unpopularity in the West has coincided with a historic consolidation of power in the Middle East, and what that reveals about the condition of Western opinion.

The inevitable partition of Ukraine? | George Yeo

Listen carefully to George Yeo, former foreign minister of Singapore.

He displays a far deeper understanding of European history and its conflicts than most Western politicians ever have.

It’s rare to see a high-ranking official speak with this level of depth, clarity, and insight in an interview. Here.

Having listened, I don't agree with George Yeo on Taiwan. I don't believe Taiwanese are taking an independent line, wanting to remain as they are, de facto if not de jure independent, just because the US says so. All the polls over many years, shows they don't want to be a part of the mainland. And that's the story. An independent people want to remain independent.

But on the Ukraine-Russia war question, perhaps he's got a point. Which is simply this: that any settlement, any Cease Fire, will involve Ukraine giving up some land. I think those of us that followed this at all were already there.

By the way, to be clear when i say "independent line" I don't mean that the want to declare independence. Which would be suicidal. They simply want the status quo. Which is effective independence. Without calling for it in legal international terms.

There is no Sisterhood

 

I was told this years ago, by a senior manager in a finance company here in Hong Kong. A woman. By some criteria "a person of colour". A minority. Who was nonetheless very senior in her organisation: up to the Managing Director level. 

But who told me that she didn't like to work with women. Because they were always talking behind your back and waiting for you to fail. Men were different, she told me. An Old Man. With men, she said, they fitted in to a hierarchy straight away. They were natural at it. When the boss was named, they followed the boss. 

No, you don't have "lots of Muslim friends", OtherBarak! They don't love you. They're just waiting for the chance.

 

Birth of a Grand-Nephew

Grand-Nephew, Noah, born to Dr Meredith Davies and Zed. 

A birth. Always a thing to celebrate. Especially these days of such low birth rates. 

A son to my niece, daughter of my sister and Ian. 

Hurrah! 

Is it better to own property direct or indirect via a REIT?

We have properties here in Hong Kong. Which we rent out. That's us owning property direct. It's been pretty good for the best part of two decades. But recently, I calculated that it would be better, for us, to own property INdirect. That is, via a fund of properties, like the REITS, which are Real Estate Investment Trusts. These invest in a portfolio of properties and divide up the net rental returns, after taking a management fee, between all the share owners. 

I calculated that it would be better to own property INdirect: 

(1) Easier. Less hassle

(2) More money. About $HK 1 million more per year.

This is not accepted by my partner in all this. 

I asked Grok. 

Look at hong kong property. Compare owning of apartments direct, leasing them out to ordinary people. Compare that with putting the same amount of money into a REIT, like the LINK Reit. Compare for the period 2008 to 2025. Compare CAGR and ROI (Net rent divided by value of the property).  

Tell me if you think it would have been better to invest in property direct, or in property indirect, like in a REIT.

Here's the answer. 

Direct Ownership of Residential Apartments (Buy and Lease Out) vs. Investing in Link REIT (2008–2025)To compare these two approaches over the period from the start of 2008 to the end of 2025 (approximately 18 years), we focus on key metrics: CAGR (Compound Annual Growth Rate of total return, including capital appreciation and income) and net rental yield (net rent as a percentage of property value, averaged or representative over the period).Note: Direct residential ownership involves buying apartments and renting them to ordinary tenants. Link REIT (0823.HK) is primarily a retail-focused REIT (shopping malls, car parks, some office/logistics), not residential, so it's an indirect property investment but in a different sector. This is an apples-to-oranges comparison in asset type, but as requested.1. Direct Residential Property Ownership (Buy-to-Let)

• Price Appreciation:
  • Hong Kong residential prices rose dramatically from 2008–2013 (~+134%).
  • Peaked around 2021 (BIS index ~263 vs. base periods).
  • Then declined sharply due to high interest rates, economic pressures, and policy changes: ~25–30% drop from 2021 peak by mid-2025, with ongoing year-on-year declines (e.g., -7.76% y-o-y in Q1 2025).
  • Overall from 2008 to 2025: Strong gains early, but recent corrections mean net appreciation is positive but moderated. Estimated total capital growth: ~150–200% (rough, based on index from low post-GFC to current levels around 190–200 on various bases like BIS 2010=100 or RVD 1999=100 equivalents).
• CAGR (Capital Only): ~5–7% annually.
• Rental Income:
  • Rents followed prices upward but with less volatility and lagged during downturns.
  • Gross rental yields have been consistently low in Hong Kong: Averaged ~3–4% over the period, recently ~3.9% (Q2 2025), with ranges 2.4–4.99% depending on size/location.
  • Net yield (after management fees, maintenance, vacancy, rates/taxes, but before financing costs): Typically ~2–3% (gross minus ~1% costs).
• Total Return CAGR (capital + reinvested net rent): Estimated 7–9% annually, driven mostly by early appreciation. Recent years have lower/negative capital returns, dragging overall performance.
• ROI as Net Rent / Property Value: Average ~2.5% annually (varying from ~2% in high-price periods to ~4% recently as prices fell faster than rents).

Challenges: High transaction costs (stamp duties), leverage risks (many use mortgages, amplified losses in downturns), management hassle, vacancy risks, and illiquidity.2. Investing in Link REIT (Indirect via Retail-Focused REIT)

• Price Appreciation:
  • IPO in 2005; from 2008 lows (post-GFC dip to HK$0.65 adjusted) to 2025 prices (HK$35–42 range in recent data).
  • Peak 2019 (HK$89–90).
  • Recent declines due to retail challenges (post-COVID, mainland competition, negative reversions).
  • Overall capital growth from 2008–2025: Positive but lower than residential peak-to-trough swings.
• CAGR (Capital Only): ~4–6% annually.
• Distribution Income (DPU):
  • Consistent growth historically (e.g., from ~HK$1.8 in mid-2010s to peaks ~HK$2.7–3).
  • Yield typically 5–7% (higher than residential due to commercial efficiencies and mandatory 90%+ payout).
  • Recent: Some declines (e.g., -5.9% in H1 FY2026), but resilient with diversification (China, Australia, etc.).
• Total Return CAGR (price appreciation + reinvested distributions): Estimated 8–10% annually over long periods (since IPO ~10–12% in some analyses, adjusted down post-2019). Link has delivered stable income even during property downturns, outperforming direct in volatile periods due to professional management and diversification.

Advantages: Liquidity, diversification (portfolio of 150+ assets), no management hassle, higher yields.Comparison Summary

Metric	Direct Residential (Buy-to-Let)	Link REIT (Indirect Retail)
Total CAGR (2008–2025)	~7–9% (strong early gains, recent drag)	~8–10% (steadier, income-driven)
Net Rental/Distribution Yield (Avg.)	~2–3% (low due to high prices)	~5–7% (higher efficiency)
Volatility	High (price swings, leverage risks)	Medium (stock-like, but income buffer)
Key Driver	Capital appreciation (boom-bust)	Consistent distributions + moderate growth

Conclusion: Which Was Better?Over 2008–2025, investing in Link REIT (indirect via REIT) would likely have been better overall for most investors.

• It provided higher and more consistent income yields.
• Total returns were comparable or slightly superior, with lower hassle and risk (no single-property exposure, professional management).
• Direct residential benefited hugely from the 2009–2021 bull run but suffered sharp corrections recently, compressing yields and eroding gains for late entrants or leveraged buyers.

If you were unleveraged and held through the full period, direct might edge on capital gains—but factoring in costs, time, and recent performance, Link REIT offered a superior risk-adjusted return. For pure residential exposure, direct ownership captured the boom better early on, but REITs like Link provided smoother, more passive returns.This is based on aggregated historical data; individual results vary by timing, location, and leverage. If you'd like more precise calculations with specific indices or assumptions, let me know!