GIC, TPG Invest $72M in Indian Hospital Chain and More Asia Real Estate Headlines

Healthcare leads today’s roundup of real estate headlines from around Asia as Singapore’s sovereign fund hooks up with a US private equity giant for a $72 million India investment. Also in the news, Hong Kong’s borrowers catch a break after the US holds interest rates steady and New World Development continues to work on its balance sheet.

GIC, TPG Fund Buys Stake in Indian Hospital Chain for $72M

Specialty investment firm Asia Healthcare Holdings, backed by US private equity investor TPG and Singapore sovereign fund GIC, has acquired a major stake in India’s Asian Institute of Nephrology and Urology (AINU) for INR 6 billion ($72.1 million), the companies said on Wednesday.

Global investors are scouting India’s healthcare market to buy stakes in hospital chains amid huge demand for private health care, Reuters reported in June. Global consultancy PwC projects 12-14 percent annual growth for India’s private healthcare market currently worth around $48 billion. Read more>>

Hong Kong Monetary Authority Keeps Rates Steady as Fed Takes a Break

Hong Kong kept its base rate unchanged after the US Federal Reserve skipped its monetary tightening cycle for the second time this year, giving the city’s businesses and borrowers breathing room amid a struggling economy.

The base rate was kept at 5.75 percent, the Hong Kong Monetary Authority (HKMA) said before financial markets opened. Hours earlier, the Fed maintained its target rate unchanged at between 5.25 percent and 5.5 percent, taking its second recess since the cost of money began rising in March 2022. Read more>>

Hong Kong’s New World Faces Balance Sheet Woes as Market Sags

From CK Asset Holdings Ltd.’s Li Ka-shing to Henderson Land Development Co.’s Lee Shau-Kee, Hong Kong’s fabulously wealthy tycoons have for decades dominated the city’s property and retail sectors. Now, these families face a big existential crisis. Their founders are either really old or have passed away. The younger heirs need to prove that the original rags-to-riches business acumen is still in their DNA, at a time when the economy and the financing world are rapidly changing.

Out of the four biggest dynasties, the most vulnerable seems to be the Chengs, whose empire spans property flagship New World Development Co. and retail jeweler Chow Tai Fook Jewellery Group Ltd. After a brutal sell-off this summer, bonds issued by New World are yielding double digits, hardly befitting the image of a family that is, by one estimate, worth almost $30 billion. Read more>>

UBS Pegs Tokyo, Zurich as World’s Remaining Real Estate Bubbles

According to the UBS Global Real Estate Bubble Index 2023, published on Wednesday, imbalances in housing markets have seen a significant decline over the past year. Driven by macroeconomic factors, real house prices in 25 major cities fell 5 percent on average from mid-2022 to mid-2023. As a result, only two cities – Zurich followed by Tokyo – remain in the “bubble risk” category, compared to nine cities a year ago.

“The global surge in inflation and interest rates over the past two years has led to a sharp decline in imbalances in the housing markets of global financial centers on average,” said UBS, predicting further declines. Read more>>

China Property Crisis Weigh on Asia’s Developing Economies – ADB

Economic growth in developing Asia this year will be slightly lower than previously expected as the weakness in China’s property sector and El Niño-related risks cloud regional prospects, the Asian Development Bank (ADB) said on Wednesday.

Updating its regional economic outlook, the ADB trimmed its 2023 growth forecast for developing Asia to 4.7 percent, from 4.8 percent projected in July. Read more>>

SGX-Listed EC World REIT Makes Onshore Interest Payment

The manager of EC World Real Estate Investment Trust said on Thursday (Sep 21) that around RMB 11.3 million ($1.5 million) has been released from its onshore interest reserve to fully repay the REIT’s onshore interest expenses due on Wednesday.

The REIT’s majority lenders approved the release of the interest reserves at the manager’s request, it added. However, as there is no specific deadline by which the onshore interest reserves need to be topped up, there are ongoing talks between onshore lenders and EC World REIT and its subsidiaries. Read more>>

Warehouse Sector Continues to Deliver Returns as Offices Suffer

Companies from e-commerce retailers to third-party logistics providers are leasing less new warehouse space amid weak freight demand, high interest rates and shifting consumer spending.

But the industrial real-estate market hasn’t completely cooled off after three years of frenetic expansion. The amount of storage available remains historically tight, industry experts say. Read more>>

China’s Office Market Makes US Look Healthy

The office market in the U.S. is dismal. In some ways, it is even worse in China. With the country’s economy facing its worst slowdown in years, huge amounts of office space are sitting empty in once-booming cities like Shenzhen and Wuhan, while rents are falling.

Nearly 24 percent of the office-tower space in 18 major Chinese cities was unoccupied as of June, according to CBRE, the real-estate services firm. That is worse than the U.S., where office vacancy rates hit a 30-year-high of 18.2 percent in June. Read more>>

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