Shimao Proposes 8-Year Debt Repayment Plan and More Asia Real Estate Headlines

In today’s roundup of regional news headlines, debt-saddled developer Shimao floats a proposal to repay $11.8 billion over eight years, a Shanghai mega-mall reels from COVID-led lockdowns, and Link REIT extends a rent holiday for Hong Kong tenants.

China’s Shimao Proposes to Repay $11.8B Debt Over 8 Years

Cash-strapped Chinese developer Shimao Group has proposed a two-class restructuring plan to offshore creditors to repay $11.8 billion over a period of three to eight years, according to two sources with direct knowledge of the matter and a document seen by Reuters.

Shanghai-based Shimao first missed a public offshore bond obligation last month. With an outstanding $6.1 billion worth of international bonds, Shimao is the sixth-largest issuer among Chinese developers, according to Refinitiv. Read more>>

Shanghai’s Super Brand Mall Sees 34% of Shops Close

Shopping malls in China’s financial hub are seeing a surge in vacancies after COVID-zero lockdowns hammered consumer demand, adding to the woes of developers and asset managers owning them.

Vacancy rates in Shanghai’s malls climbed to 7 percent in the second quarter, above a “warning line” of 5 percent, said China Real Estate Information Corp. The worst hit was Super Brand Mall, in the heart of the city’s Lujiazui financial district, which saw 34 percent of its shops shuttered. Read more>>

Link REIT Extends Rent Holiday for Retail Tenants

Link REIT, Asia’s largest real estate investment trust, said it would not immediately take legal action against Hong Kong tenants who owe rent following the end of a government-enforced three-month “protection period”.

Enacted by the city’s Legislative Council during the fifth wave of coronavirus infections, the rent moratorium became effective in early May. Its three-month protection period ceased at the end of July. Read more>>

China RRR Cuts in Play as Beijing Seeks to Bolster Property

China’s central bank could give lenders a bigger cash boost to help them reduce their rates on mortgages and other loans in a bid to stabilise the nation’s embattled property sector, according to the Securities Times.

The People’s Bank of China could cut the reserve requirement ratio, or the amount of cash that banks must keep in reserve, before the end of 2022, according to a front-page commentary carried in the newspaper Tuesday. That would provide banks with the liquidity needed to swap “rather large amounts” of policy loans coming due in the final four months of the year, the article said. Read more>>

United Hampshire US REIT Restructuring Debt Maturing in 2023

United Hampshire US REIT has begun negotiations on refinancing options for its short-term liabilities maturing in March 2023 and is confident of a successful outcome, the trust’s manager said Monday in a bourse filing.

The announcement was in response to queries raised by the Singapore Exchange Securities Trading about UHREIT’s “significant liabilities of S$309.2 million ($221 million) and cash and bank balance of only S$12.6 million”. Read more>>

Tokyo Landlords Cut Rents to Fill Condos Before Inflation Worsens

While most prices seem to be going up these days, one sector is heading the other way: Tokyo condo rents.

The average monthly rent for Tokyo condominiums declined 0.3 percent in July, the third consecutive month for the average to dip below the previous month’s rate, according to Tokyo Kantei, a real estate data company. Read more>>

Hong Kong Secondary Home Sales Suffer as Market Slows

Prices of decades-old secondary homes in Hong Kong, which were driven up in the past two to three years, have slumped by more than 30 percent in recent days as they lose appeal among buyers.

Home seekers have become more selective amid a market correction, preferring to buy new flats that are more resilient in these conditions, analysts said. Read more>>

Retailer Gome Doubles Down on Brick-and-Mortar Business

Gome Retail Holdings, one of China’s largest bricks-and-mortar electronics retailers, plans to acquire real estate to develop into shopping malls and a customer experience centre, a sign it is refocusing on its offline business and paring back a loss-making e-commerce venture.

Gome Retail will buy Eagle Delight Properties Overseas Ltd outright from Gome Property Holdings, the Hong Kong-listed firm said in a Friday exchange filing. The latter is wholly owned by the retailer’s controlling shareholder, Huang Guangyu, also known as Wong Kwong Yu. Read more>>

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