Evergrande Restructuring Timetable Stays on Track and More Asia Real Estate Headlines

In today’s roundup of regional news headlines, China Evergrande says it will unveil its restructuring scheme by the end of July as planned, as the debt-saddled developer receives new terms from the Hong Kong bourse to avoid a delisting. Meanwhile, a rout in conglomerate Fosun International’s dollar bonds signals a new front in China’s financial struggle.

China Evergrande Said Sticking to Restructuring Schedule

China Evergrande Group said it expects to announce its preliminary restructuring plan before the end of July, sticking to its original deadline as the world’s most indebted property developer struggles to emerge from its financial crisis.

Reeling under more than $300 billion in liabilities, the firm’s offshore debt is deemed to be in default after missing payment obligations late last year. Read more>>

Hong Kong Exchange Sets Terms for Evergrande to Avoid Delisting

China Evergrande said Hong Kong’s stock exchange has set the terms for it to avoid delisting, as turmoil in the country’s property sector pushed a gauge of Asian high-yield dollar debt to near-record lows.

The slump for the ICE Bank of America Asian Dollar High Yield index was spurred largely by global investors dumping Chinese developers’ bonds in response to mounting repayment pressures. Last week, Moody’s put the credit rating of Chinese conglomerate Fosun International on review for downgrade. Read more>>

China Junk Bond Sell-Off Enters New Phase With Record Fosun Rout

A record sell-off in Fosun International’s dollar bonds is a sign that financial stress among China’s property developers is starting to spread to the country’s other weaker borrowers.

The Shanghai-based conglomerate’s dollar notes lost 21 percent last week, the most in a Bloomberg index of Chinese high-yield dollar bonds, after Moody’s Investors Service put the firm on review for a downgrade. Most of Fosun’s notes have continued to slump since Monday, despite an offer by the company to buy back some offshore debt. Read more>>

Closing Date for High Point Tender in Singapore Confirmed After Interest Picks Up

Freehold condominium High Point in Singapore’s prime Orchard Road area will close its en-bloc tender on 28 July after the interest level in “super prime residential sites” picked up, said sole marketing agent Savills.

The condominium at 30 Mount Elizabeth was put back on the collective sale market in March, three months after Hong Kong-listed Shun Tak Holdings backed out of a S$556.7 million ($407.5 million) winning bid for the site. Read more>>

Chinese Realty Brokerage 5i5j Cuts Franchises Amid Poor Sales 

China’s 5i5j Holding Group, the country’s first real estate agency to be listed on the mainland, intends to close its franchise business in some second-tier cities, including Hefei and Yantai, to focus on direct sales in key cities to cope with the sluggish property trend.

Besides the two eastern cities, the company plans to close its franchises in Hunan province’s Changsha because of the pandemic and the real estate situation, the Beijing-based firm said in a Monday statement on WeChat. Read more>>

Frasers Hospitality Trust Falls to Headwinds — Are More S-REITs at Risk?

Just a month shy of eight years since its initial public offering, the managers of Frasers Hospitality Trust are ready to call it quits.

FHT on 13 June announced a proposed privatisation by its sponsor group. Under the scheme of arrangement, the offeror — a wholly owned subsidiary of real estate giant Frasers Property Ltd — will pay S$0.70 ($0.51) in cash for each FHT stapled security that FPL and TCC Group Investments do not already hold. Read more>>

HK Policies Saved Homeowners From Negative-Equity Trap

Hong Kong is better prepared now than it has been in the past 25 years to withstand future financial crises, with leverage among homebuyers in the world’s most expensive urban centre at the lowest level since 1997, the city’s former central bank chief said.

That strength is reflected in the mortgage-to-property value ratio, which stood at 53 percent at the end of 2021, according to official data, versus 64 percent in 2009 and as high as 70 percent in 1997. Its stringent mortgage financing rules have helped the city ride out two of its biggest crises over the past two decades. Read more>>

Hong Kong Developers Lower Prices to Generate Sales

Hong Kong property developers are offering new projects at lower starting prices to stimulate sales in an environment of rising interest rates and increasing supply of flats.

Sun Hung Kai Properties, Hong Kong’s biggest developer by sales, for instance, on Sunday set the starting price for a 217 square foot (20 square metre) flat at its Silicon Hill project at HK$3.85 million ($490,460) in its latest price list. This was lower than the HK$4.97 million it asked for a 291 square foot flat in the first round of sales on 3 June. Read more>>

Kowloon May Attract More Chinese Firms as Mainland Cost Gap Narrows

Falling office rents in Kowloon have reduced the price premium between the area of Hong Kong and mainland cities in the Greater Bay Area, attracting more Chinese firms to set up shop in Kowloon, according to property consultants Colliers and Knight Frank.

The most recent and worst wave of the COVID-19 pandemic in Hong Kong dragged down office rental prices, and the average office rent in Kowloon fell 9.3 percent to HK$26.90 ($3.43) per square foot in May. Read more>>

Tune in again soon for more real estate news and be sure to follow @Mingtiandi on Twitter, or bookmark Mingtiandi’s LinkedIn page for headlines as they happen.