Country Garden Seeks Grace Period for RMB Bond and More Asia Real Estate Headlines

In today’s roundup of regional news headlines, once-mighty Country Garden manoeuvres to extend a maturing onshore bond, and Hong Kong home prices sag for a third month in a row. Also making the cut are a hedge funder’s luxe Shanghai home buy and a slide in Hong Kong revenue as land sales slow.

China Distress Mounts as Country Garden Tries to Dodge Default

China is flashing new signs of financial stress almost on a daily basis, with a property giant making fresh efforts to avoid default and a state-run bad-debt manager suffering a bond slump on worries about its own health.

In the latest indication of its liquidity struggle, Country Garden Holdings has proposed a grace period of 40 calendar days for a maturing onshore bond as it seeks to win creditor support to stretch payment into 2026. Read more>>

Hong Kong Home Prices Down for Third Month in July, Falling 1.1%

Hong Kong private home prices eased 1.12 percent in July from June, the third monthly fall in a row, official data showed on Tuesday, as homebuyer sentiment was deterred by rising interest rates and a weak economic outlook.

The drop in home prices last month in the financial hub — one of the most expensive markets in the world — followed a revised 1.05 percent fall in June. Read more>>

China Hedge Fund Founder Buys $39M Shanghai Villa at Discount on Taobao

The founder of a top quantitative hedge fund in China bought a villa in Shanghai for RMB 285.5 million ($39 million) in an online auction, scooping up one of the city’s most expensive homes for less than its appraised value.

The winning bid was about 10 percent lower than the RMB 316.4 million appraised value for the 1,300 square metre (14,000 square foot) property in Pudong district, according to records on Taobao. The villa was sold on Alibaba Group’s auction site after its previous owner failed to repay more than RMB 67 million owed to a bank. Read more>>

Stamp Duty Dilemma Adds to HK Finance Chief’s Woes

Facing Hong Kong financial secretary Paul Chan is a book — and a situation — that would challenge anyone in a similar position.

Instead of being on track to generating an income of HK$85 billion ($10.8 billion) from land sales and premiums to narrow the fiscal deficit to HK$54.4 billion at the end of this financial year, Chan is confronted with an 82 percent drop in land premium income so far. Read more>>

Manhattan Hotel Once Linked to 1MDB Scandal Sold to Qataris

A Manhattan hotel once caught up in the 1MDB scandal was sold to Qatar’s sovereign wealth fund after spending years on the market.

The Qatar Investment Authority paid nearly $623 million for the Park Lane Hotel on Central Park South, city property records showed. Read more>>

Japan Regulator to Evaluate Banks’ Commercial Property Exposure

Japan’s financial regulator plans to review major banks’ exposure to overseas commercial real estate, reflecting global alertness to troubles in the sector.

The area is among the credit risks to watch this year, according to the Financial Services Agency in its annual policy guidance released Tuesday. The regulator cited interest rate rises and deterioration in related markets overseas as reasons to assess the “situation of loans” made in this sector. Read more>>

Korean Lenders in New York Luxury Hotel Likely to See Losses

Some Korean institutional investors may see significant losses on their investment in a hotel in the heart of New York, as the developer has defaulted on its loan.

South Korea’s Hana Securities invested $86 million in mezzanine debts in the Margaritaville Resort Times Square Hotel in February 2019 and created two US private real estate funds via Seoul-based Global One Asset Management. Hana and local brokerage houses sold the funds to four undisclosed domestic institutional investors; the funds mature at the end of this year, according to banking sources. Read more>>

China’s Shoppers Hesitate to Spend Big in Face of Deflation

For Song Jingli, a 39-year-old founder of a communications startup in Beijing, 2023 was supposed to be a year of big spending. She and her husband hoped to travel to New Zealand and buy a second apartment in the Chinese capital.

But by the time summer arrived, the state of the economy had persuaded them to avoid expensive purchases. “It’s like when you know the storm is coming,” said Song. “You stay away from the water.” Read more>>

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