Evergrande Hit With $111M Penalty Over Failed Deals and More Asia Real Estate Headlines

In today’s roundup of regional news headlines, defaulted developer China Evergrande loses an arbitration case against a jilted investor, and fellow builder Fantasia Holdings’ debt restructuring plan hits a snag. Also in the news, a son of Hong Kong billionaire Joseph Lau has put a pair of homes on Victoria Peak on the market and higher interest rates may be opening the door for investments by cashed-up families.

Evergrande Ordered to Pay $111M in Arbitration Against Unit, Exec

China Evergrande on Friday said it received an enforcement notice from the court in relation to arbitral proceedings against its Guangzhou Kailong Real Estate and executive director Xu Jiayin by Hexin Hengju (Shenzhen) Investment Holding Center.

The developer said the enforcement notice requires it to pay compensation of RMB 770 million ($111.4 million) to the claimant, among other required payments. Under the deals, the claimant injected RMB 5 billion into Hengda Real Estate, another Evergrande unit, to buy a 1.6 percent stake, but the deals later fell through as certain obligations were not fulfilled. Read more>>

Shareholders of Evergrande’s EV Unit Agree on Restructuring Deal

Shareholders of China Evergrande New Energy Vehicle Group accepted a proposal to dispose of two subsidiaries in a restructuring, according to a filing with the Hong Kong stock exchange on Friday night.

More than 50 percent of the votes under the EV company, a unit of embattled developer China Evergrande, were cast at a Friday general meeting in favour of a proposal raised in late April, the filing said. Read more>>

China Builder Fantasia Faces Key Shareholder Revolt on Debt Plan

A Chinese developer whose default in 2021 has since fed into a broader industry rout is facing resistance to its restructuring plan from a major shareholder.

Fantasia Holdings’ second-biggest shareholder, TCL Industries Holdings, opposes the terms of the debt-to-equity swaps, a key part of the restructuring proposal that would dilute shareholders’ stakes, according to people familiar with the matter who asked not to be identified discussing private matters. Read more>>

Huang Wei’s Shenzhen New World Fined $4M in LA Bribery Case

A company owned by a billionaire Chinese developer was fined $4 million on Friday for bribing a Los Angeles city council member for help in getting a downtown skyscraper approved.

Huang Wei’s Shenzhen New World I LLC was given the maximum penalty and was also placed on five years of probation, according to a statement from the US Department of Justice. Read more>>

Joseph Lau’s Son Puts Two Peak Houses on Sale for $128M

Hong Kong tycoon Joseph Lau’s eldest son, Lau Ming-wai, is trying to sell two houses on The Peak for almost HK$1 billion ($127.5 million) in total, according to sales documents seen by the South China Morning Post.

The younger Lau, chairman of Hong Kong-listed Chinese Estates Holdings, has appointed Centaline Property Agency to market houses A and D at 31 Barker Road. The three-storey detached houses in Hong Kong’s most exclusive residential neighbourhood enjoy a full Victoria Harbour view. Read more>>

Funding Crunch in APAC Commercial Properties Opens Doors for Local Players

Commercial real estate markets in Asia Pacific face a $5.8 billion funding gap between now and 2025 — but therein lie pockets of opportunities for local property players eyeing assets in distress.

In a report on the APAC commercial real estate debt market, CBRE estimated that the region had $177 billion in outstanding senior loans as of the first quarter of 2023. A funding gap of $5.8 billion is expected to emerge through 2025, primarily due to declining capital values in today’s high interest rate environment, the consultancy said. Read more>>

Hong Kong’s Luxury Home Renters Should Prepare to Pay More in Second Half

Hong Kong’s luxury home rents have turned a corner and are set to rise up to 6 percent in the second half as expatriates return, market observers said.

The government’s Top Talent Pass Scheme and the gradual return of expatriates, who had temporarily relocated to other cities including Singapore amid the COVID-19 pandemic, will support the high-end rental market, they said. Read more>>

India Poised for Hospitality Boom as Hotel Brands Race to Meet Surging Demand

India is tipped to be the next engine of growth for the hotel industry in Asia Pacific, as global hospitality brands embark on aggressive expansion in an “underserved” market.

The country’s huge and increasingly prosperous population — it recently superseded China as the world’s most populous country — and an estimated threefold rise in foreign tourists in the next few years will ensure a race among hospitality providers to meet rapidly expanding demand for accommodation, analysts said. Read more>>

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