Mapletree Closes on $552M for US Office Fund and More Asia Real Estate Headlines

Singapore’s ongoing interest in American real estate assets as Mapletree Investments announces that it has closed on $552 million in equity for its first-ever US office fund.

The ongoing financial pressure on Chinese developers continues to make headlines as we head into the final days of September with China Oceanwide announcing that it may collapse if it can’t find new funding, and mainland site sales slowing as builders struggle to reduce their debt piles.

Mapletree Closes on $552M in Equity for US Office Fund

Mapletree Investments has closed its maiden US office fund, Mapletree US Income Commercial Trust (MUSIC), with $552 million in total fund equity raised.

The vehicle’s portfolio five commercial properties in markets including Oakland, California; Dallas, Texas; Raleigh, North Carolina; and Minneapolis, Minnesota. The assets cover a total net lettable area (NLA) of 285,000 square metres (3 million square feet) with a total asset value of $1.3 billion. It has a weighted average lease expiration of 8.8 years and an occupancy rate of about 96 percent. Read more>>

Developer China Oceanwide Warns of Potential Collapse

As the financial world warily watches the fate of cash-strapped China Evergrande Group, another big Chinese property developer is facing a ticking clock too, tied to projects in Manhattan, Los Angeles and Hawaii.

China Oceanwide Holdings’ Hong Kong-based development subsidiary has been warning in regulatory filings this year that if it can’t complete plans to bolster its finances, such as restructuring debts and selling part of its portfolio, it might not be able to continue to “operate as a going concern.” Read more>>

China’s Regulators Push Evergrande to Finish Projects

Regulators in China are said to have instructed developer Evergrande Group to focus on completing unfinished properties and repaying investors while avoiding a near-term default.

But it offered no financial support to the company which has yet to pay US$83.5 million (S$112.5 million) in bond interest due on Thursday (Sept 24). The world’s most indebted developer now has 30 days to pay the amount. Read more>>

HSBC, StanChart Seen Exposed to Evergrande Spillover

HSBC and Standard Chartered could face spillover damage to their profits and balance sheets from the debt crisis enveloping China Evergrande Group even though the two banks say they have limited their direct exposure, analysts have warned.

HSBC and StanChart make a big chunk of their profits in China and Hong Kong and they have been the foreign banks most involved in underwriting syndicated loans for developers there. That means they are likely to face the most immediate second-order impacts, analysts at JPMorgan said in a research report. Read more>>

China Land Sales Cool Off as Developers Stumble

China’s property crackdown and the deepening crisis at Evergrande are showing more signs of cooling the market after land auctions in several cities received tepid interest. Nine out of 10 land parcels in Hangzhou, home to tech giant Alibaba Group Holding, went unsold during the second batch of centralised land bidding recently, the Securities Daily reported. By comparison, in January all four parcels in the eastern city were auctioned at the upper end of prices set by local authorities.

The land market is also losing steam in other cities, with parcels sold at their asking prices in Qingdao, Jinan, Tianjin and Shenyang, the Economic Information Daily reported. The gap between asking and final prices narrowed to one per cent in Suzhou. Read more>>

SGX-Listed IREIT Global Buys Barcelona Office for $32M

IREIT Global’s wholly owned subsidiary has acquired a Grade A freehold office building in Barcelona, Spain, for 27.2 million euros ($31.8 million).

The move brings the number of Spain properties in the Europe-focused real estate investment trust’s (REIT) portfolio to five, including three in Barcelona and two in Madrid. Read more>>

LHN Group Buys Hotel on Singapore’s Balestier Road for $11M

Singapore’s LHN Group will acquire the Balestier Hotel near the Integrated Care Hub in Novena for S$15 million ($11 million). The company, which is acquiring the 10,000 square foot (929 square metre property) through a joint venture between a pair of subsidiaries, has announced that the acquisition of the freehold hotel property is intended for the running and operation of a co-living hotel.

The co-living hotel at 471 & 473 Balestier Road will operate under LHN Group’s Coliwoo brand, a co-living business that runs more than 800 rooms in Singapore in areas such as Balestier, Boon Lay, and Bukit Timah. Read more>>

Korean Finance Ministry Warns of Excessive Borrowing

A senior South Korean official on Thursday called for greater efforts to manage the country’s excessive borrowing, saying problems at China Evergrande served as an example of the debt issues economies could face as they scale back stimulus.

Lee Eog-weon, a vice finance minister, said South Korea should “pre-emptively manage default risks that could arise from excessive leveraging and risk-taking,” citing a potential Evergrande default as the kind of incident that could arise as central banks globally unwind pandemic-era monetary policy. Read more>>

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