Henderson Land H1 Property Revenue Plunges 68% and More Asia Real Estate Headlines

Hong Kong’s property woes lead the way in Mingtiandi’s roundup of Asia real estate headlines today with the news that the developer founded by Kong Kong’s second-richest man has recorded a steep decline in revenue from its property business for the first half of the year.

In other news around the region, a REIT sponsored by a newspaper kingpin turned landlord is in due diligence on a $720 million debt issuance to fund a property acquisition, while a co-working giant has opted against using Morgan Stanley in its looming IPO after the investment bank is said to have balked at the debt financing involved.

Elsewhere, an ASX-listed developer controlled by a Singapore-headquartered investment manager is poised to buy a building in Brisbane for $30 million.

Henderson Land H1 Real Estate Revenue Plunges 68%

Henderson Land Development reported its second consecutive double-digit percentage decline in interim revenue, as one of Hong Kong’s largest developers fell victim to the city’s slowing property market.

Turnover fell 38 percent to HK$8.1 billion ($1 billion) in the six months ended June, while first-half underlying profit, excluding revaluation gains on investment properties, dropped to HK$6.7 billion. Revenue from real estate sales plunged 68 per cent to HK$2.7 billion during the period, said Henderson, founded by Hong Kong’s second-richest man Lee Shau-kee. Read more>>

WeWork Rejects Morgan Stanley Over Debt Financing

Morgan Stanley famously nabbed this year’s largest initial public offering, thanks partly to its top technology banker’s moonlighting job as an Uber driver. But the firm is nowhere to be found on what’s shaping up to be the year’s second-biggest IPO, WeWork.

Morgan Stanley stepped back from a lesser role in the deal after WeWork rejected its pitch to be the top underwriter, according to people with knowledge of the matter. The relationship became strained when the bank wouldn’t extend as much debt financing as WeWork was seeking from key lenders, the people said, asking not to be identified discussing non-public information. Read more>>

SPH REIT Launches S$1B Debt Issue

Retail landlord SPH REIT has established a S$1 billion ($720 million) multi-currency debt issuance programme, with part of the proceeds to be potentially used for a possible acquisition.

The REIT’s manager, SPH REIT Management, is currently conducting due diligence on the potential acquisition. “Discussions about the potential acquisition are still preliminary and there can be no assurance that the acquisition will materialise at all,” the manager said. Read more>>

Yanlord to Issue US$ Bonds with 4.5 Year Tenure

Yandlord Land on Wednesday said it is proposing to issue US dollar-denominated senior notes with 4.5 years tenure and a non-call of 2.5 years at an initial price guidance in the 7.1 percent area.

A non-call means the issuer has the right but not the obligation to call or redeem the bonds after 2.5 years. The issuer is Yanlord Land (HK) Co, the property developer’s subsidiary. Read more>>

Rockworth-Affiliate Said Poised to Buy Brisbane Building for A$45M

ASX-listed property investor Elanor Investors Group is poised to buy one of Brisbane’s most prominent heritage buildings from Charter Hall for about A$45 million ($30 million).

It’s understood the deal is close to being finalised on the seven-storey building at 200 Adelaide Street, which is being offloaded by Charter Hall’s Direct PFA Fund. Singapore-based real estate firm Rockworth Capital Partners acquired an 18 percent stake in Elanor in April, making it the group’s largest shareholder. Read more>>

CITI Research Calls ESR REIT a “Hidden Industrial Gem”

CITI Research has initiated coverage on ESR Reit with a “buy” and a target price of S$0.57 ($0.41), saying the fourth-largest Singapore real estate investment trust by assets under management (AUM) is a “hidden industrial gem”.

The research house noted that ESR Reit has sizeable exposure to the “high value-add industrial space”. Such properties make up 46 percent of its AUM and account for 44 percent of net property income. Read more>>

Tokyo’s 2.9% Office Yield Lures Foreign Funds

With ultra-low interest rates and one of the highest yield gaps in international cities, foreign funds are increasingly turning their attention towards real estate in Tokyo and the rest of Japan.

According to JLL, the yield gap on prime office buildings in Tokyo is 2.9 percent, exceeding London’s average of 2.5 percent and New York City’s average of 1–1.5 percent. Tokyo’s yield gap has consistently outranked London, New York, and Hong Kong, hovering around the 2.5–3 percent range for the past ten years. Read more>>

India Real Estate Investment Triples

Technology upgrade and innovative strategies continue to drive growth making Indian real estate lucrative for occupiers and investors. Investments have more than tripled to INR 1.4 trillion ($20 billion) during 2014-18 as compared to INR 465 billion during 2009-13, says the latest CII-JLL report.

Investments in commercial office space rose to INR 622 billion in 2014-18 from INR 105 billion in 2009-13, a six-fold jump owing to strong office space demand. Read more>>

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