CalSTRS is finding new places to seek returns for its pensioners
The ongoing redistribution of western investment in Asian markets leads today’s set of real estate headlines from around the region as one of America’s largest pension funds provides its latest portfolio update. Also making the list, Li Ka-shing’s CK Asset sees profit drop and the owner of Hong Kong’s Peninsula Hotel says business has yet to rebound.
China Drops to 19th Among CalSTRS’ Markets as Pension Funds Flee
China dropped to the 19th place on the California State Teachers’ Retirement System ranking of country asset exposure, following a broader US pension retreat from the world’s second largest economy.
The pension giant’s fund allocation to China trailed South Korea, India, Mexico and Ireland by the end of May, according to its latest disclosure based on market value and revenue exposure. China’s weight in its overall investment book tumbled from 2.1 percent at the end of 2020, the latest percentage undisclosed. Read more>>
Net Profit Drops 19% at Li Ka-shing’s CK Asset
CK Asset, Li Ka-shing’s flagship property developer, said its profits in the six-month period fell 18.9 percent to HK$10.3 billion ($1.3 billion). Revenue generated from property sales plummeted 60 percent to HK$8.25 billion, with Hong Kong generating around half of this.
In a filing by CK Asset, Li cited a backdrop of global economic uncertainties and rising interest rates as the two major contributors to the developer’s poor performance. The results come a week after interest rates in the city rose for the 11th time in 17 months, taking funding costs to the highest level since December 2007. Read more>>
CK Asset Selling Homes at Lowest Price in Seven Years
CK Asset Holdings Ltd. is selling its latest residential project in Hong Kong at the lowest price in seven years to attract customers in a market hobbled by expensive borrowing costs.
The average sale price for the Coast Line II project in the Yau Tong area is HK$14,997 per square foot after a discount, the cheapest unit price among all new projects in urban districts since 2016, according to Bloomberg Intelligence. Read more>>
Hongkong and Shanghai Hotels Says Business Yet to Recover
The Hongkong and Shanghai Hotels’ (0045) interim net profit dropped by 30 percent to HK$94 million from a year earlier, though The Peninsula Hong Kong’s occupancy rate and average room rate both rose in the second quarter.
The owner of The Peninsula Hotels said its flagship hotel in the city saw its occupancy rate rise 5 percentage points to 44 percent in the second quarter from the previous quarter. However, it was still far below the pre-pandemic level of 60 to 70 percent in 2019. Read more>>
China’s PBOC Vows to Provide Ample Liquidity
Reserve requirement ratio (RRR) cuts, open market operations and all structural monetary policy tools need to be used flexibly to ensure reasonably ample liquidity in the banking system, an official with China’s central bank said on Friday.
The central bank will guide banks to effectively adjust interest rates on outstanding mortgages and support banks to reasonably control cost of liabilities, Zou Lan, head of the monetary policy department at the People’s Bank of China (PBOC), told a press conference in Beijing. Read more>>
Fitch Upgrades Wanda Units After Bond Coupon Paid
Fitch Ratings has upgraded the Long-Term Foreign-Currency Issuer Default Rating (IDR) on Dalian Wanda Commercial Management Group Co., Ltd. (Wanda Commercial) to ‘CC’, from ‘C’, and that of Wanda Commercial Properties (Hong Kong) Co. Limited (Wanda HK) to ‘CC’, from ‘C’. Fitch has also upgraded the rating on the US dollar notes guaranteed by Wanda HK and issued by Wanda Commercial’s subsidiaries to ‘CC’, from ‘C’. The Recovery Rating is ‘RR4’.
The upgrades follow Wanda Commercial’s repayment of a coupon on its $400 million bond due 2025 before the grace period ended. Fitch believes the company will continue to face liquidity challenges as there is no clarity on the refinancing plans of several onshore and offshore bonds maturing in the next six months. Read more>>
IREIT Global Declares Lower Distributions After Equity Sale
Real estate investment trust (REIT) IREIT Global on Thursday (Aug 3) posted a distribution per unit (DPU) of 0.93 euro cent for the six months ended Jun 30, following a preferential offering in July enlarging its unit base.
Its first-half DPU is 23.8 percent lower than its restated DPU for the corresponding year-ago period, which stands at 1.22 euro cents after taking into account the new preferential offering units. The offering raised gross proceeds of around S$75.9 million ($56.6 million) to fund the acquisition of 17 retail properties in France and issued around 186 million new units. Read more>>
Daiwa House Logistics Trust Boosts Distributions
Daiwa House Logistics Trust’s distribution per unit (DPU) edged up 0.4 percent to S$0.0261 for its first half ended Jun 30, from S$0.026 in the same period last year.
Gross revenue was down 4.3 percent to S$30.9 million for H1, from S$32.3 million the previous year. On a yen basis, gross revenue was 7.4 percent higher at 3.1 billion yen (S$29.2 million). Read more>>
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