China’s richest man has upped his offer to buy back the Hong Kong-listed shares in Dalian Wanda Commercial property, plus Hong Kong home priced bounced back in April while credit agencies sound warnings over recent mainland site pricing and the impact on developers. Read on for all the details.
China’s Dalian Wanda Group is offering $4.4 billion in cash to buy out Hong Kong-listed unit Dalian Wanda Commercial Properties (3699.HK), part of a plan to take it private before relisting it in Shanghai where it hopes to gain better valuations.
Mainland-listed firms typically command higher valuations than those in Hong Kong, helped by a large pool of retail investors. An index tracking dual-listed companies .HSCAHPI, shows mainland listings trade at an average 34 percent premium to the same company listed in Hong Kong. Read more>>
Private financing schemes have long fueled building projects – even property development booms – in cities across China.
But a retired prosecutor who intentionally plowed his BYD SUV into a group of schoolchildren February 29 in Nanyang, in central China’s Henan Province, has exposed a dark side of that city’s private financing network.
Ma Gaochao, 60, reportedly lost 12 million yuan in a real estate financing scheme before venting his frustration by steering into the secondary school students at a campus gate. A 16-year-old girl died, and 11 students were injured, two of them seriously. Read more>>
Hong Kong’s home price index rebounded slightly in April after a decline over six consecutive months, but rents fell for a seventh straight month, government data showed.
The Rating and Valuation Department’s monthly supplement released on Tuesday showed the general price index for private homes rose 0.7 per cent month-on-month to 273.1 in April. But in the first four months of this year, the home price index accumulatively fell 4.17 per cent. It has dropped 10.78 per cent from the market’s peak in September, 2015. Read more>>
Memo to Hong Kong developers calling for the government to ease property curbs amid a slump in home prices: Don’t hold your breath.
Declines in the residential property market have to get a lot worse before Hong Kong’s lawmakers would consider rolling back measures they introduced more than five years ago to rein in prices, according to eight analysts and economists polled by Bloomberg News. On average, they estimate that home prices, which have fallen 13 percent from a September peak, will have to plunge another 19 percent before the government intervenes. Read more>>
Credit rating companies are warning that the financial health of property developers in China is deteriorating even as the nation’s real estate market shows signs of recovery.
Fitch Ratings said Tuesday that a divergence in the performance of Chinese developers is driving more rating downgrades and outlook cuts in the industry, while S&P Global Ratings issued a report Monday saying that an aggressive expansion of land purchases for construction has led to weaker credit profiles for some builders. Read more>>
A recovery in the Chinese property market that’s been fueled by government stimulus may not be sustainable, according to S&P Global Ratings, which has cut ratings on 11 developers this year.
“The recovery isn’t all that rosy, in fact it’s rather fragile,” Cindy Huang, director of corporate ratings at S&P, said during a webcast on Monday. “It’s driven by liquidity.” Read more>>
Ascendas REIT (A-REIT) announced that it has entered into a Sale and Purchase agreement with Cova Beijing ZPark Investment Ltd, whereby it will divest its Ascendas Z-link property to the latter at an attributable property value of RMB760m (~S$160m). This comes in favourably as compared to the asset’s valuation of RMB690, as at 31 Mar 2016, and acquisition price of RMB300m in Oct 2011.
Net proceeds after tax and divestment cost are expected to be S$135m, and this deal is estimated to be completed in 1HFY17. Ascendas Z-link is a business park property located in Beijing, China, and was acquired by A-REIT from its sponsor. Read more>>
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