Dalian Wanda chairman Wang Jianlin (Getty Images)
In today’s roundup of regional headlines, Chinese developer Dalian Wanda reportedly looks to sell 20 malls for about $100 million each, as mainland credit woes help push distressed real estate debt levels to $190 billion globally. Also in the news, Vietnam’s Novaland is said to be in talks with creditors on restructuring debt and South Korea rolls out new measures to ease a financing crunch.
Wanda Said to Mull Sale of 20 Malls in Wealthy Parts of China
Dalian Wanda is weighing the sale of as many as 20 shopping malls in wealthy areas of China, according to people familiar with the matter, as the indebted conglomerate tries to avert a liquidity crunch.
The company has reached out to prospective investors including insurance companies and asset management firms about divesting some of its malls in Jiangsu and Zhejiang provinces, as well as in Shanghai, said the people, who asked not to be identified discussing private information. Read more>>
Vietnam’s Novaland in Talks With Credit Suisse, Others to Restructure Debt
Vietnamese property giant Novaland is in talks with creditors to restructure part of its $1 billion foreign debt, according to two people familiar with the matter, amid turmoil in one of the country’s top industries.
Those creditors include Credit Suisse, according to one of the people. The country’s fifth-largest developer by market value has been badly hit by a real estate sector wracked by a government crackdown on corruption and stricter rules on corporate bond issuance and refinancing. Read more>>
Distressed Real Estate Debt Reaches $190B Globally as China Woes Spread
Money managers are turning negative on real estate credit again, with the China Covid recovery trade fizzling out and rising interest rates leaving landlords facing a surge in financing costs.
The amount of property bonds and loans trading at distressed prices exceeds $190 billion globally, the most this year, according to data compiled by Bloomberg. That contrasts with other industries, where the comparable pile has shrunk in recent months. Read more>>
APAC Real Estate Investment Activity to Rise in Second Half: CBRE Survey
A new survey by CBRE has found that investors expect real estate investment activity in Asia Pacific to pick up in the second half of 2023, driven by reduced uncertainty regarding interest rates and an increase in capitalisation rates that will help close the gap in price expectations between buyers and sellers.
Cap rates, which measure a property’s value by dividing its annual income by its sale price, in APAC are projected to rise in the last six months of 2023, continuing an increase registered in the first half for all property types. The increase was recorded across most APAC cities with the exception of those in Japan and mainland China, where interest rates remain stable. Read more>>
South Korea Extends Liquidity Programme to Ease Real Estate Risks
South Korea’s financial regulator announced on Wednesday a series of measures, including an asset-backed commercial paper plan, to prevent a credit crunch in domestic financial markets from risks related to real estate projects.
Among the steps was an extension to the country’s Project Financing-Asset Backed Commercial Paper purchasing programme, which was set up last November in response to a liquidity crunch triggered by the default of the state-backed Legoland project. Read more>>
Hong Kong’s Shrinking Workforce Dims Property Prospects
The decline in Hong Kong’s working population may drag down property prices, according to real estate consultancy Knight Frank. But luxury home buyers remained undeterred as evidenced by the sale of houses on The Peak for over HK$2.6 billion ($330 million).
Due to the correlation between the size of the labor force and home prices and rents, the 0.8 percent decline in the working population during the first quarter led Knight Frank to forecast a potential fall of 1.2 to 3.6 percent in property prices over the next three months. Read more>>
Listed Landlords Face Tough Calls as Singapore Office Property Market Reprices
No Singapore office building has sold for S$500 million ($371 million) or more since last June. Institutional investors — the typical buyers of larger office buildings — are clearly not in the mood to acquire, with borrowing costs now exceeding office property yields.
Nevertheless, a few owners have quietly put their big-ticket office buildings on the market. Read more>>
IHG, Mori Trust Form Partnership to Expand Japan’s Hotel Indigo Footprint
IHG Hotels & Resorts and Mori Trust have signed a partnership agreement to open Hotel Indigo Nagasaki Glover Street in late 2024.
The deal marks the beginning of a new partnership between IHG, one of the world’s biggest hotel companies, and Mori Trust, one of Japan’s best-known development and hospitality companies. Read more>>
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