Korea’s KFCC Could Take 33% Loss on London Disposal and More Asia Real Estate Headlines

London’s office market is falling down and the decline in UK commercial assets could mean a big loss for a Korean venture, with that story leading today’s roundup of Asia real estate headlines. Also in the news, Singapore’s red hot residential rents are showing signs of cooling and CapitaLand says it may double its India presence.

Vestas, KFCC Could Suffer 33% Loss on Sale of London Office Tower

South Korea’s Vestas Investment Management Co. is slated to sell off a London-based office tower as the property value has plunged due to rate hikes, sources familiar with the matter said. Korean Federation of Community Credit Cooperatives (KFCC), which has invested in the asset, is likely to see a huge loss, sources added.

The property is on 125 Shaftesbury Avenue in the UK capital, which Vestas owns via its 38th private real estate investment trust (REIT) that matures in April 2024. Vestas has tapped a financial advisor for the sale and will start the bidding process on 8 August, according to sources on Tuesday. Read more>>

Singapore Residential Rents Show Signs of Cooling

Singapore’s rental price growth slowed in the second quarter, cooling a years-long boom that has sapped affordability and threatened to dent the city-state’s appeal as a finance hub. An index of private residential prices rose 2.8 percent from the previous three months, the smallest gain since 2021, Urban Redevelopment Authority figures show.

The growth in rental costs is expected to ease further as new units become available, with about 20,000 private housing completions due this year alone – the highest annual supply since 2017. Government measures have also helped relieve the spike in rents that has rattled tenants. Read more>>

China’s State Council Pushes Cities to Support Property Markets

China’s State Council called on cities to introduce policies to ensure the healthy development of their property markets, adding to the chorus of top policymakers stressing the importance of targeted measures for economic growth.

Cities should roll out measures that meet their own needs, a cabinet meeting chaired by Premier Li Qiang decided on Monday, according to China Central Television. While there were no details on those plans, the state broadcaster also reported the meeting discussed the need to optimize policy properties and step up research and construction of a new industry development model. Read more>>

CapitaLand Investment Aims to Double India Portfolio

Singapore-listed and headquartered company CapitaLand Investment (CLI) is planning to double its portfolio in India. Its assets under management in India are currently valued at about S$4 billion ($3 billion) and this is likely to touch S$7-8 billion over the next three years, Sanjeev Dasgupta, CEO, CapitaLand Investment India and CapitaLand India Trust told Moneycontrol.

The company is also looking at expanding to the eastern region and planning to enter the renewable energy business. It plans to scale up its real estate portfolio to 50 million square feet in the next three years. Read more>>

Tenants Find Affordable Upgrades as Hong Kong Office Market Slumps

Companies are jumping on the opportunity to upgrade to bigger and better offices amid Hong Kong’s rare property downturn. That’s adding pressure to commercial landlords who own assets that are older or in non-prime locations.

With slowing demand and an impending influx of supply, Grade-A office rents are 31 percent lower than in 2019, according to JLL data. Read more>>

Singapore Shophouse Sales Jumped in Q2 Following Residential Restrictions

Commercial shophouse sales received a boost in the second quarter of 2023, on the back of higher additional buyer’s stamp duty (ABSD) rates for residential properties.

Between April and June 2023, 43 shophouses changed hands for S$414 million. This is up from the 32 deals in the previous quarter, a report released by real estate agency PropNex on Monday showed. Transaction values were up by 40 percent. Read more>>

US Congressional Panel Grills BlackRock, MSCI on China Involvement

A US congressional committee on China is investigating asset management giant BlackRock and index provider MSCI, saying they were facilitating investments into blacklisted Chinese companies, underscoring how tense relations between the two countries are rippling out into corporate America.

The firms have facilitated the flow of American capital into companies the US government had found guilty of fuelling China’s military advancement or human rights abuses, the House of Representatives’ Select Committee on the Chinese Communist Party (CCP) said in letters dated on Monday (31 Jul) and seen by Reuters on Tuesday. Read more>>

Starbucks Reports Record Revenue as China Sales Jump 46%

Starbucks reported record revenue in its fiscal third quarter as its China business roared back to life. While its earnings surpassed Wall Street’s forecast, its revenue and same-store sales were lower than expected as North American store traffic slowed.

Same-store sales – or sales at stores open at least a year – jumped 46 percent in China, reversing last year’s declines due to COVID restrictions. At Chinese stores opened in 2019 or earlier, morning routines are fully back to 2019 levels, the company said. Read more>>

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