Some mainland developers are turning to short-term debt
Stalling home sales lead the way in Mingtiandi’s roundup of Asia real estate headlines today with the news that mainland developers are scrambling for cash in a liquidity crunch triggered by the coronavirus outbreak.
In other news around the region, a sovereign wealth fund is leading the suitors for Mapletree’s $350 million tech park in Bangalore, while a Singapore-listed property group founded by tycoon Ong Beng Seng has acquired a boutique hotel in Italy.
Elsewhere, Wuhan has suspended a $4 billion land auction as developers quarantine their cash.
Mainland Developers Turn to Short-term Debt as Virus Hits Cashflow
Some Chinese property developers are turning to short-term debt for funds as home sales stall due to a spreading coronavirus outbreak, sharply reducing their cash flow.
The switch is in stark contrast to last month, when many developers were able to sell long-tenor notes with maturities of up to 12 years. At least four other developers have borrowed debt offshore maturing in less than one year since the Lunar New Year, including Central China Real Estate, whose projects are in Henan province, which borders Hubei province, the epicenter of the outbreak. Read more>>
GIC Leads Bids to Buy INR 25B Tech Park from Mapletree
Singapore’s sovereign wealth fund is the front runner to acquire Mapletree Investments’ Global Tech Park in Bangalore for around INR 25 billion ($350 million) in what would be the largest private equity exit to date in India’s commercial real estate space, two people familiar with the negotiations said.
“GIC has been shortlisted and the deal is under documentation and has not been funded yet,” one of them said. Read more>>
Singapore’s Hotel Properties Buying Italian Boutique Hotel for €41M
Hotel Properties Limited plans to add another Italian hotel to its portfolio, this time from Italy’s Dolomites region.
HPL Dolomites, which is 80 percent owned by HPL Europe, has agreed to acquire 90 percent of the corporate capital and voting rights in Alpina Dolomites SRL from Misam S.r.l. for €40.6 million euros ($44 million), with a net working capital adjustment to be finalised later. Read more>>
HK Retailers Strike Over Rent as Virus Decimates Sales
Fifty retailers shut their fashion outlets, restaurants and cafes in Hong Kong on Tuesday in an unprecedented strike to demand rental cuts, as plunging foot traffic caused by months of anti-government protests and a coronavirus outbreak threatens to decimate the industry.
Confectioner Lady M, the French sportswear brand Lacoste distributed by Crocodile and Singapore’s fashion brand Club 21 are among nearly 200 shops that have declared a “no business” day across 14 shopping centres in Hong Kong. Some of the shops said they would be shut for 24 hours, while others announced temporary closures without stating a time limit. Read more>>
HK$1B Kowloon Development Draws 17 Bids
Urban Renewal Authority’s Tonkin Street/Fuk Wing Street Development Project in Sham Shui Po has received at least 17 tenders from mainland and Hong Kong developers today.
The developers include, Country Garden, Chevalier International, China Overseas Land and Investment, Emperor International, Far East Consortium International, Chinachem Group, New World Development, Wang On Properties, Sino-Ocean Group, SEA, and K&K Property. Read more>>
Wuhan Suspends Land Sales Worth RMB 29B
Wuhan, the Chinese city at the centre of the coronavirus epidemic, has suspended a set of land auctions worth about RMB 29 billion ($4.1 billion) a day before the bidding deadline, citing “virus outbreak” for the move.
The Wuhan Natural Resources and Planning Bureau on Tuesday halted the sale of 10 plots of land with a combined reserve price of RMB 10.5 billion, according to a notice posted on its website. It followed a decision on Monday to hold off an auction for six plots worth RMB 18.24 billion. Read more>>
ARA H-Trust Q4 DPS Misses IPO Forecast by 12.9%
ARA US Hospitality Trust (ARA H-Trust) posted a distribution per stapled security (DPS) of 1.08 US cents for the fourth quarter ended 31 December, 2019, missing its initial public offering forecast of 1.24 US cents by 12.9 percent.
Gross revenue was down 12.2 percent to $39.3 million for the quarter, from $44.8 million forecast. This was due to room revenue being 12.6 percent lower than forecast at $37.2 million due to lower average daily rate. Read more>>.
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