In today’s roundup of regional news headlines, a deeper-than-expected rate cut by China’s central bank sparks a rally in developer stocks, South Korea’s government requests changes in Mirae Asset’s $3 billion deal for IFC Seoul, and MGM China injects cash into its Macau unit.
China Cuts 5-Year Mortgage Rate as Real Estate Crisis Deepens
China trimmed its key lending rates again on Monday, one week after it cut two interest rates in a surprise move. The moves are seen as an attempt to revive credit demand and fire up the economy hurt by extended Covid lockdowns and property debt problems.
The People’s Bank of China cut its five-year loan prime rate by 15 basis points to 4.30% from 4.45%, and lowered its one-year loan prime rate by 5 basis points to 3.65 percent. Read more>>
China Developers Rally as Beijing Alleviates Liquidity Fears
Chinese developer stocks rallied after a deeper-than-expected cut in a mortgage reference rate and Beijing’s pledge of financing help, as policymakers showed more urgency to ease a severe property crisis.
A Bloomberg Intelligence index tracking developers rose as much as 1.9 percent before paring the gains to 1.2 percent in afternoon trading. Developers’ junk dollar bonds were up 0.5 cents to 5 cents on the dollar, according to credit traders. Read more>>
Seoul Pushes Mirae to Cut Leverage for $3B IFC Deal
South Korea’s land ministry has advised Mirae Asset Global Investments to cut the proposed leverage for its $3 billion deal to buy the International Finance Center in Seoul, according to the ministry and industry sources on Friday.
In May, Mirae Asset was selected as the preferred buyer of the landmark tower by Brookfield Asset Management. The deal is expected to be the country’s largest real estate transaction this year. Read more>>
MGM China Injects $594M Into Macau Unit to Keep Casino Licence
Casino operator MGM China Holding said it will inject MOP 4.8 billion ($594 million) into its MGM Grand Paradise unit as it prepares to re-tender for a licence to operate its gaming business in Macau.
Under the terms of a revised gaming law released by Macau’s legislature earlier this year, a casino needs a minimum capital requirement of MOP 5 billion, and the managing director of the concessionaire must be a Macau permanent resident holding at least 15 percent of its capital. Read more>>
Moving Singapore Air Base to Create Space for 150,000 New Homes
Besides freeing up land for 150,000 new homes in Paya Lebar, the relocation of Paya Lebar Air Base will mean the lifting of some building height restrictions around it, allowing for the redevelopment of towns such as Hougang, Marine Parade and Punggol, Prime Minister Lee Hsien Loong said at the National Day Rally on Sunday.
In these towns, more amenities can be added and better use can be made of the space, he said: “It won’t happen overnight. But over decades, we can completely reimagine the eastern part of Singapore.” Read more>>
Logan Among 3 Mainland Developers Warning of Profit Hits
Shenzhen-based developer Logan Group has warned that its net loss for the first half will range from RMB 500 million ($73 million) to RMB 800 million.
There are three major reasons for the loss: the pandemic delayed construction progress that decreased income; a year-on-year decline in sales due to a continuing downturn of the real estate industry; and a decrease in the gross profit margin caused by recognising lower gross profits at some projects. Read more>>
Hong Kong to Raise Plot Ratios, Building Heights at Northern Metropolis
The Hong Kong government has applied to relax plot ratios and building height restrictions at 37 parcels of land by up to 30 percent in northern Fanling and Kwu Tung as part of its Northern Metropolis development plan to boost the city’s housing supply.
The Civil Engineering and Development Department submitted two applications seeking approval from the Town Planning Board this week which, if cleared, could yield 58,439 homes, according to documents provided by the board. Read more>>
Lendlease Posts $68.5M Loss, Targets Profit in 2024
The massive shake-up of Lendlease’s business has taken a toll on the fiscal 2022 bottom line, with the company expecting the pain to continue into the current year before hitting its straps in 2024.
The property giant posted a bottom-line loss of A$99 million ($68.5 million) for the full year but noted that its performance improved dramatically in the second half as core profit jumped from A$28 million in the first six months of the year to A$248 million in the second half. Read more>>
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