HSBC Boss Says China Crisis Just Getting Started and More Asia Real Estate Headlines

In today’s roundup of regional news headlines, the head of HSBC warns of at least two more years of pain in China’s commercial property market, Yanlord Land Group announces its subsidiary’s winning tender for the Lentor Central site in Singapore, and Hong Kong tycoon Adrian Cheng raises funds for crypto investment.

Two More Years of Correction in China Commercial Market: HSBC CEO

The “massive” correction to China’s commercial real estate market may have at least another two years to run, according to HSBC chief executive Noel Quinn.

“It’s a faster correction and a more decisive one than I was expecting, or I think anyone was expecting, and I think it’s got quite a while to go before it really stabilises,” Quinn said at a Bank of America conference on Tuesday. “You could be looking at another two-plus years of correction.” Read more>>

Yanlord Unit’s Consortium Wins Lentor Central Site Tender for S$481M

Yanlord Land Group on Monday said an indirect subsidiary, together with two other parties, has been awarded a residential site tender in Lentor Central at a bid price of S$481 million ($345 million), or S$1,108 per square foot of built area.

UED Alpha, a wholly owned subsidiary of Yanlord’s United Engineers, submitted the tender with Forsea Residence and Soilbuild Group Holdings. Read more>>

Adrian Cheng’s Firm Raising $500M to Invest in Crypto, Private Equity

C Capital, a firm started by Hong Kong real estate tycoon Adrian Cheng, plans to raise $500 million to invest in blockchain assets, credit and private equity over the next 18 months, betting that prices of private companies and digital assets are bottoming out.

Also co-founded by ex-Bank of America Merrill Lynch banker Ben Cheng, the firm is marketing a $200 million blockchain fund and plans to gather about $300 million to invest in private equity and private credit strategies next year, people familiar with the matter said, asking not to be identified discussing fundraising details. Read more>>

Fitch Withdraws Zhenro Properties Group’s Ratings

Fitch Ratings has withdrawn Chinese developer Zhenro Properties Group Ltd’s long-term issuer default rating of RD (restricted default) and senior unsecured rating of C with a recovery rating of RR5.

Fitch is withdrawing the ratings because Zhenro has chosen to stop participating in the rating process. Therefore, Fitch will no longer have sufficient information to maintain the ratings. Accordingly, Fitch will no longer provide ratings or analytical coverage for Zhenro. Read more>>

European Business Group Warns of Loss of Confidence in China

A top European industry group warned on Wednesday that firms were losing confidence in China and that its standing as an investment destination was being eroded, citing its “inflexible and inconsistently implemented” COVID-19 policy as a key factor.

The European Chamber of Commerce published the warnings in a paper it said had input from 1,800 member companies, which also contained 967 recommendations for China, the European Union and European companies related to doing business in the country. Read more>>

Anxious Kaisa Investors Throw Good Money After Bad

Foreign bondholders in Chinese developer Kaisa, which is starting to default on $12 billion in offshore credit, are offering up to $2 billion to take over stalled housing projects plus restructure debt. A similar proposal failed last year, but as its woes worsen, Kaisa may reconsider. Pricing is the trick.

As with most holders of dollar bonds issued by Chinese developers, Kaisa’s investors are in a tough position. The Shenzhen-based company has not published its 2021 annual report, so there’s little insight on its current financial condition. Its shares have been halted since April, and its bonds are trading at as low as 10 cents per dollar. Read more>>

Japan’s Land Prices Up for First Time Since Before Pandemic

Japanese land prices rose in the 12 months to 1 July for the first time since before the pandemic, thanks to easing of measures to control COVID-19, an annual land ministry survey showed on Tuesday.

The data highlighted continued harm that border controls are inflicting on Japan’s tourism industry, at a time when the government is signalling further reopening to attract foreign visitors. Read more>>

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