In today’s roundup of regional news headlines, South Korea’s Lotte Group completes its acquisition of a Chicago hotel, China’s real estate crisis hammers bonds issued by developers Country Garden and Logan Group, and statistics show that Singapore REITs doubled their overseas investment in 2021.
Hotel Lotte, retail conglomerate Lotte Group’s luxury hotel operator, completed the acquisition of Kimpton Hotel Monaco in Chicago for $36 million last Friday, the South Korean hotel operator announced on Monday.
Lotte and Korea Overseas Infrastructure & Urban Development Corporation, a state-run organisation to support global private-public partnerships, jointly acquired the hotel from Xenia Hotels & Resorts, a Florida-based REIT. Read more>>
Concerns about concealed debt at Logan Group fuelled a heavy sell-off in Chinese dollar bonds, both investment-grade and high-yield. A key interest rate cut by China wasn’t enough to stem a drop in property stocks, with traders calling for more policy support as the economy slows.
Logan’s 2023 note sank 14.7 cents to a record low 62.3 cents after Debtwire reported that the developer could be on the hook for $812 million of guarantees on outstanding obligations due through 2023. Read more>>
The prices of China’s newly built homes declined at a slower rate in December, offering a bit of relief to dozens of property developers that are struggling with a cash crunch and mounting debt.
The average price of new homes across 70 cities fell by 0.28 percent in December from a month earlier, a slower rate than the 0.33 percent monthly drop in November, according to calculations by E-house China R&D Institute in Shanghai, based on data released Saturday by the National Bureau of Statistics. Read more>>
The crisis engulfing China’s property sector is impacting its biggest developer, with Country Garden Holdings’ shares and bonds hammered amid fears that a reportedly failed fundraising effort may be a harbinger of waning confidence.
Country Garden is one of the few remaining large, better-quality private developers that had been largely unscathed by the liquidity crunch, even as peers such as Shimao Group Holdings saw dramatic reversals in their credit ratings. The firm is viewed as a bellwether for contagion risk, as unprecedented levels of stress in the offshore credit market threaten to drag good credits down with bad. Read more>>
Singapore’s property managers are accelerating their push abroad as a slow reopening and diminishing returns at home force them to look for growth opportunities elsewhere.
Foreign acquisitions by REITs in the city-state jumped to an all-time high of 61 last year, data compiled by Bloomberg show. The total value of such deals also more than doubled from 2020 to $12.3 billion. Read more>>
The Shanghai Stock Exchange has stopped trading some bonds of Chinese real estate developer Shimao.
The day after the company failed to make payments on loans, there was growing concern that the cash crisis could spread throughout the real estate industry in the country. Read more>>
Flats at Hong Kong’s first new housing project of the year have been priced lower than expected as the city faces a fifth wave of COVID-19 outbreak, which could weigh on buying sentiment.
Henderson Land Development, founded by Hong Kong’s second-richest man, Lee Shau-kee, on Friday said 66 flats at the 337-unit The Harmonie in Cheung Sha Wan would be offered at HK$21,379 ($2,746) per square foot on average after discount. Read more>>
China’s crackdown on its real estate sector shows few signs of stopping as officials seek to reduce the risk of a US-style financial crisis.
The big questions now are what will the world’s largest property market look like at the end of this process — and whether the Communist Party can avoid a hard landing of the economy. Read more>>