The Shanghai Tower still has 55 empty floors two years after completion
The mainland’s tallest building is proving to be one of its hardest to fill as Shanghai’s giant corkscrew gets some media attention for its leasing struggles. Also in the headlines today, nearly all of China’s new mortgages went to first-time home buyers in the first half of the year, and investors begin to punish Sunac for its acquisition-happy ways.
Shanghai Tower May Be World’s Tallest White Elephant
It’s China’s tallest building and was supposed to be a symbol of Shanghai’s modernity and the city’s glittering future as a global financial centre.
Yet more than four years after The Shanghai Tower “topped out” at 632 metres and 2½ years after architects declared it “ready for occupancy”, the building remains largely vacant. Read more>>
Ninety Percent of Mainland Mortgages Go to First-Time Buyers
China’s big four state-owned banks, which collectively grant more than half of the nation’s mortgage loans, significantly slowed their lending pace in the first half of this year in response to a government call, and devoted 90 per cent of their new mortgages to first-time homebuyers.
In the first half the four banks – Industrial and Commercial Bank of China, Bank of China, China Construction Bank and Agricultural Bank of China – extended about 1.3 trillion yuan (US$197.6 billion) of new mortgages, according to aggregate numbers obtained from their interim results. The growth rate of outstanding mortgages tapered off substantially. Read more>>
Mid-Sized Developers Sell Off Whole Condo Blocks as Market Peaks
Small to mid-sized property developers appear to have shifted their focus for profit in recent months by selling entire residential blocks to investors as home prices recorded their slowest gain in 16 months, increasing fears of a drop in demand, says industry watchers.
Yuexiu Property is the latest developer to sell a new residential building – in Ho Man Tin, a mostly residential area in Kowloon – for HK$820 million (US$104 million) in its case to Grand Ming Group Holdings, raising total transaction value for turnkey developments since January to nearly HK$4 billion. Read more>>
Sunac Debts Seen Bringing Down Share Price
Sunac China Holdings Ltd. shares fell as investors focused on the struggle by China’s most-leveraged developer to control its debt, instead of a surge in net income that was fueled by unrealized gains from acquisitions.
Excluding one-off gains, Sunac recorded a core loss of 530 million yuan ($81 million) in the first half, almost double the loss of 283 million yuan a year earlier, CIMB Securities Ltd. estimated. Sunac reported core profit of 1.4 billion yuan, a figure that included some one-off gains, while saying its first-half net income surged 1683 percent to 1.3 billion yuan. Read more>>
China’s Anbang Insurance to Roll Out New Products After Govt Ban
Anbang Insurance Group Co. is going back to basics.
The acquisitive Chinese firm, which landed in Beijing’s crosshairs after funding a global buyout spree with sales of high-yield investment products, is adopting a more traditional approach as it emerges from a three-month regulatory ban on new client offerings. Anbang is preparing to sell more than 20 new products, the majority of which are plain-vanilla, protection-type policies, according to people familiar with the matter.
The pivot illustrates how China’s crackdown on financial risk is changing the nation’s insurance industry. Gone are the days when firms like Anbang could fund explosive growth by offering short-term policies with juicy yields. The company will now have to go head-to-head with more traditional players, including China Life Insurance Co. and Ping An Insurance (Group) Co., that have much larger armies of agents. Read more>>
Landing Intl Says It Needs $1B More to Develop Jeju Island Casino
Hong Kong-listed casino investor Landing International Development Ltd says it will require more funding to complete its casino resort on the holiday island of Jeju, in South Korea.
“It is currently estimated that a further investment amount of approximately US$1 billion will be required to cover the higher construction and development costs [for Jeju Shinhwa World], and the accelerated spending for the upcoming period,” the firm said in a filing on Thursday. Read more>>
Shimao’s Hui Wing Mau Buys Aussie Beef Producer for Over A$100M
NSW beef processor Bindaree Beef Group has had another crack at securing a Chinese investment partner – this time successfully. Bindaree Beef has sold a 51 per cent stake in the company to the Hong Kong-based Hui family and the Hui-backed Archstone Investment Co in return for a “significant” investment in Bindaree Beef.
The amount of the investment has not been disclosed, but is believed to be between $100 million and $150 million. Read more>>
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