Goldman Sachs is making a hasty exit from its investment in Luckin Coffee
Coffee leads the way in Mingtiandi’s roundup of Asia real estate headlines today with the news that a US investment bank is seizing shares in a scandal-hit coffee chain after the company’s chairman defaulted on a $518 million loan.
In other news around the region, a recent rebound in home sales has prompted mainland China’s biggest developers to prepare to splurge on land, while Korea’s state health provider has committed $1.1 billion to future investments in alternatives including real estate. Elsewhere, Singapore office rents are set to slide as the effects of the pandemic begin to take root.
Goldman Seizes Luckin Coffee Shares after $518M Default
Goldman Sachs said it would seize and sell Luckin Coffee shares from the chairman of the scandal-hit chain after he defaulted on the terms of a $518 million margin loan.
Goldman on Monday said it was seizing the shares as collateral on the margin loan facility to Luckin chairman Lu Zhengyao. It would then convert them into American depositary shares and sell them to recoup losses on behalf of a syndicate of lenders. The syndicate of lenders also included Credit Suisse, Morgan Stanley and Barclays, two people familiar with the situation said. Read more>>
Gemdale USA Sells LA Residential Complex for $32M
A private Orange County-based private family paid $31.95 million for the property, or $375,882 per unit. Institutional Property Advisors (IPA), a division of Marcus & Millichap, announced and brokered the deal, but declined to share additional details about the buyer.
“South Hills Apartments is poised to benefit from the San Gabriel Valley’s strong economic fundamentals,” said Kevin Green, IPA senior managing director, in a statement. Read more>>
Korea’s State Health Provider Commits KRW 1.4T to Alternative Investment
The National Health Insurance Service unveiled on Monday plans to commit up to 1.4 trillion won ($1.1 billion) to its first alternative investment in history as an institutional investor. It plans to select two lead partners to manage the assets for four years, officials said.
This comes as the South Korean state agency, with some KRW 20 trillion worth of assets under management, moves to shift away from a conservative portfolio and turn to alternative assets, ranging from real estate to infrastructure and private equities. Read more>>
China’s Biggest Developers Set to Splurge on Land
China’s top developers are prising open their war chests to snap up land this year as local governments sell more prime real estate to boost revenues and smaller, distressed property firms look to offload assets as the coronavirus takes a toll.
Despite some analysts’ warnings that an economic recovery could take longer than expected, many major property companies said at recent earnings conferences that they planned to ramp up spending thanks to a faster-than-expected home sales rebound in the first quarter and more abundant liquidity. Read more>>
Singapore Office Rents to See Effect of Pandemic this Quarter
The impact of the COVID-19 outbreak on Singapore’s central business district grade A office rents was not yet apparent in the first quarter this year, as rents and capital values remained flat, while vacancy tightened.
Colliers expects the effect of Covid-19 on office rents to be more evident in Q2 2020, though the pandemic may not jolt the office market as significantly as past crises. Read more>>
Investment Funds Said Circling Distressed Assets in Hong Kong
Hong Kong’s cash-strapped property owners have been willing to sell their assets at a 20 per cent to 30 percent discount as the economic fallout from the coronavirus pandemic mounts. Some investment funds are waiting out for bigger fire sales.
London-based real-estate investment fund manager Nuveen Real Estate said some assets had been priced at around 20 percent to 30 percent clearing even before the pandemic hit, as holders buckled under months of anti-government protests. Read more>>
India Co-Working Firms Waive Rent as Users Disappear
Several co-working space providers have waived rentals, or are providing rental discounts, for their customers for April, since most customers are not using the spaces on account of the lockdown.
Some are doing it because they are worried that the clients, many of who pay on a monthly basis for each seat, will move away from them if they don’t provide concessions during this difficult time. Read more>>
Tune in again tomorrow for more news, and be sure to follow @Mingtiandi on Twitter, or bookmark Mingtiandi’s LinkedIn page for headlines as they happen.
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