Macquarie upgrades Hongkong Land (H78.SG) to Outperform from Neutral, lifts target price to US$6.10 ($8.31) from US$4.90 to reflect strong recovery in Hong Kong office market, according to Dow Jones.

Macquarie says new supply in overall HK office sector equates to just 6.7% of existing stock over next three years: “This should lead to continued low vacancy and increasing rents, trends already evident in the market from our industry feedback.”

Research house notes developer’s residential business also doing well, with strong home sales largely behind 69.9% on-year rise in 1H10 underlying profit to US$476.8 million.

Shares +0.4% at US$5.38.