Country Garden Warns of $1B Loss and More Asia Real Estate Headlines

In today’s roundup of regional news headlines, mainland property giant Country Garden foresees a $1 billion loss in its 2022 annual report, and Singapore-listed EC World REIT responds to questions about its balance sheet.

Country Garden Sees 2022 Loss Amid China’s Property Slump

Top Chinese developer Country Garden Holdings said Monday that it expected to swing to a net loss of up to $1.1 billion for 2022 amid a sluggish property market, though core profit, excluding non-recurring items, would remain positive.

The company, which has the largest sales in the industry, said its loss was mainly due to a drop in gross profit margin, a rise in provision for impairment for property projects, and net foreign exchange losses it expected to report. Read more>>

EC World REIT’s Manager Answers SGX Queries on Going-Concern Issues

EC World REIT’s manager said the trust has adequate current assets to meet its short-term liabilities, in its response to queries from the Singapore Exchange.

It was commenting on whether the China-focused player with e-commerce, supply chain management and logistics properties would be able to meet its short-term liabilities of about S$818.5 million ($607.2 million). The bourse regulator noted that ECW Group’s liabilities stood at S$1.1 billion but it had cash of only S$113.3 million, as shown in the group’s condensed interim financial statements. Read more>>

Vanke’s $2.2B Private Placement Plan Sparks Concerns

China Vanke has given the green light to a plan to issue RMB 15 billion ($2.2 billion) worth of shares to select investors despite existing stockholders’ fears of low pricing and dilution.

The general meeting of shareholders has passed the property company’s plan with more than 98 percent of the votes to complete a private placement, the Shenzhen-based firm said in a statement recently. The blueprint of widened share capital on the mainland still needs to be approved by the core securities regulator. Read more>>

Fitch: Vanke Share Placement Is Credit Positive

China Vanke’s rating headroom will improve after the recent completion of a HK$3.9 billion ($500 million) H-share placement and proposed RMB 15 billion ($2.2 billion) A-share placement, Fitch Ratings says.

Fitch estimates that Vanke’s leverage, measured by net debt (including asset-backed securities)/adjusted inventory, will drop by 2 percentage points when both share placements are completed. Read more>>

Favouring Continuity, China Reappoints Central Bank Governor

China on Sunday reappointed Yi Gang as head of the central bank in an effort to reassure entrepreneurs and financial markets by showing continuity at the top while other economic officials change during a period of uncertainty in the world’s second-largest economy.

Yi, whose official title is governor of the People’s Bank of China, plays no role in making monetary policy, unlike his counterparts in other major economies. His official duties lie in “implementing monetary policy”, or carrying out decisions made by a policymaking body whose membership is a secret. Read more>>

Hong Kong Market Stuck in Doldrums as Border Reopening Disappoints

Hong Kong’s beleaguered property market remains stubbornly stuck in the doldrums, as the much-anticipated border reopening with mainland China has yet to boost home transactions, which bodes ill for owners looking to unload their assets.

The number of homes that changed hands in Hong Kong was 3,051 in January, according to the latest data compiled by JLL, almost a fifth less than the monthly average of 3,755 transactions last year. Read more>>

More Pain for Singapore Tenants Who Engage Leasing Agents

Thanks to a Singapore rental market that started heating up in the last two years, tenants who use the services of an agent to help them lease a home are now expected to pay these agents a commission. This was not the case in the past, as the tenant’s agent usually shares the commission with the landlord’s agent, who in turn collects the commission from the landlord he represents.

This practice of agents taking a commission from their tenants has become the norm — at least for now — and mostly involves corporate clients and foreigners who are new to Singapore. This comes as private home rents shot up 29.7 percent last year, following a 9.9 percent rise in 2021. Read more>>

Chinese Buyers Ready to Scoop Up ‘Better Value’ Thailand Properties

As flights resume between China and Thailand, Shanghai resident Eri Chen is planning on visiting Bangkok and Chiang Mai in mid-March to look for homes to invest in and maybe even retire to.

Rising home prices and cost of living in Shanghai, China’s commercial hub, have prompted him to think about retiring in Thailand. Instead of spending at least RMB 4 million ($574,000) just to live on the outskirts of Shanghai, or double that amount for an average unit in the city’s urban areas, Chen finds a home in downtown Bangkok for around RMB 600,000 a lot more appealing. Read more>>

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