Evergrande’s Hong Kong trophy becomes a millstone
The Evergrande dumpster fire continues to command Asia’s real estate news cycle with Reuters reporting that the developer’s discussions with Guangzhou’s Yuexiu Property for a $1.7 billion purchase of the Evergrande Hong Kong headquarters have fallen through. Also, China’s central bank on Friday attacked Evergrande for mismanagement while regulators have also begun probing PwC’s audit work for the naughty megabuilder.
In non-Evergrande news, a US real estate debt strategy backed by CalSTERS and Korea’s POBA continues a deal streak and a set of conservation shophouses in Singapore is on the brink of changing hands for $66.7 million.
Yuexiu Backs Away From $1.7B Buy of Evergrande HK Headquarters
Chinese state-owned Yuexiu Property has pulled out of a proposed $1.7 billion deal to buy China Evergrande Group’s Hong Kong headquarters building over worries about the developer’s dire financial situation, two sources said.
The collapse of the talks for the landmark building’s sale is another setback for cash-strapped Evergrande which has been scrambling to divest some assets to repay creditors knocking on its doors. With more than US$300 billion in liabilities, it has already missed three rounds of interest payments on its international bonds. Read more>>
China’s Central Bank Names and Shames Evergrande to Prop Up the Market
China’s central bank for the first time on Friday lambasted property giant Evergrande Group for its “poor management”, while saying the potential spillover effects to the financial system from a collapse of the developer are controllable.
The comments from Zou Lan, head of the financial department at the People’s Bank of China (PBOC), come amid heightened market concern about worsening debt problems in China’s property market, which has for decades been a main engine of growth in the world’s No 2 economy. Read more>>
HK Audit Watchdog Investigating PwC Work for Evergrande
Hong Kong’s audit regulator said on Friday it was investigating China Evergrande Group’s 2020 accounts and their audit by PwC because it had concerns about the adequacy of reporting on whether it could continue operating as a going concern.
Cash-strapped Evergrande has been scrambling to divest some assets to repay creditors knocking on its doors. With more than US$300 billion in liabilities, it has already missed three rounds of interest payments on its international bonds. Read more>>
Korea’s POBA Teams with CalSTRS for $317M in US Real Estate Debt
The California State Teachers’ Retirement System (CalSTRS) and South Korea’s Public Officials Benefit Association (POBA) have invested a combined $317.2 million in US real estate debt so far this year via their $600 million co-investment fund, according to a local media report.
The debt investments were made on three multifamily housing facilities and a multi-asset portfolio, the Financial News said on Oct. 15. Read more>>
Porcelain Hotel in Early Stage of Being Sold for Around $66.7M
In one of the largest deals in the Singapore conservation shophouse market, Porcelain Hotel – comprising 12 contiguous four-storey shophouses along Mosque Street – is in the early stage of being transacted at about S$90 million ($66.7 million), The Business Times understands.
The property, which bears 5 addresses – 46, 47, 48, 49 and 50 Mosque Street – is on two land lots with a total site area of 10,143 sq ft. Both lots have land tenures of 99 years starting August 2002, leaving balance lease terms of about 80 years. Read more>>
Family of Kopitiam King Buys Lornie Road GCB for S$26.8M
THE family of Lim Bee Huat of Kopitiam King fame is buying a fairly new bungalow along Lornie Road for S$26.8 million.
The price of S$2,545 per square foot, albeit on a relatively small freehold land area of 10,529 sq ft, is seen as being on the high side for the Caldecott Hill Estate Good Class Bungalow (GCB) Area. Read more>>
New Singapore Private Home Sales Fell 31% in September
New private home sales posted a double-digit drop for a second straight month as many developers held off on new launches following a sharp rise in Covid-19 community cases and tight visitor restrictions.
The number of units moved fell 31 per cent to 834 units last month from 1,216 in August, while sales dropped 37 per cent from the 1,329 units moved a year ago, according to Urban Redevelopment Authority (URA) data released on Friday. Read more>>
China Eases Mortgages for Rest of Year
China is loosening restrictions on home loans at some of its largest banks, according to people familiar with the matter, adding to signs of growing concern by the authorities about contagion from the debt crisis at China Evergrande Group.
Financial regulators told some major banks late last month to accelerate approval of mortgages in the last quarter, said the people, asking not to be identified. Read more>>
Ping An Drop in Market Value Driven by China Market Fears
China’s Ping An Insurance (Group) Co. has long argued it should be treated like a high-growth technology company instead of a seller of life policies. After a $90 billion plunge in its market value, it’s now priced more like a property developer at a time when the country’s real estate sector is out of favor.
This year’s 40% stock dive has cut its price-to-earnings ratio to just above 6, slightly more than the Shanghai Stock Exchange Property Index’s multiple of 5.7 and a far cry from the 20-plus commanded by insurance peers Berkshire Hathaway Inc. and AIA Group Ltd. That’s been fueled by a botched real estate investment, Beijing’s technology crackdown that hit the value of its spinoffs and a slumping life business. Read more>>
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