Existing home sales in Shanghai doubled over the weekend from the previous one, CIMB says (Getty Images)
In today’s roundup of regional news headlines, China’s newly announced support measures boost property stocks, and embattled builder Country Garden reportedly makes a payment on a ringgit-denominated bond. Also on the list, mainland megacities react to the latest stimulus and Australia’s Cromwell plunges to a heavy loss.
Property Stocks Lead China Rally as Stimulus Measures Lift Mood
Chinese stocks jumped after the nation rolled out further property support measures, the latest in an intensifying campaign to rescue the beleaguered sector that’s been dragging down the economy.
The Hang Seng China Enterprises Index gained 3.2 percent, with property names Longfor Group Holdings and China Resources Land among the top performers. A Bloomberg Intelligence gauge of developer shares surged 7.2 percent, the most in six weeks. Read more>>
Country Garden Reportedly Wires Ringgit Bond Coupon
Distressed Chinese builder Country Garden Holdings has wired a coupon payment coming due on a ringgit-denominated bond, according to people familiar with the matter, in its latest effort to avoid default.
The developer, which won approval Friday to extend a separate maturing yuan bond, told creditors that it has made the ringgit coupon payment, the people said, asking not to be identified speaking about a private matter. The MYR 2.85 million ($613,365) coupon is effectively due on 4 September, according to data compiled by Bloomberg. Read more>>
China’s Mortgage Relaxation Spurs Weekend Sales in Megacities
Home sales in two of China’s biggest cities soared in the past two days after mortgage relaxations, an early sign that government efforts to cushion a record housing slowdown is helping.
Existing home sales for Beijing and Shanghai doubled over the weekend from the previous one, according to CGS-CIMB Securities. “We were surprised by the strong pick up in Beijing and Shanghai, despite the challenging economy,” said Raymond Cheng, head of China property at CIMB. Read more>>
After Country Garden Debt Deal, Focus Shifts to Sector Recovery Prospects
Country Garden’s deal with creditors for an extension on onshore debt payments worth RMB 3.9 billion ($540 million) has brought the developer and China’s crisis-ridden property sector some much-needed respite.
But while investors in the company and China economy-watchers alike may be heaving sighs of relief, it remains to be seen whether a raft of government stimulus measures will soon help revive demand and ease the sector’s cash squeeze. Read more>>
Malaysia’s $100B Country Garden Forest City Caught Up in Developer’s Woes
On the approach to Malaysia’s $100 billion island megaproject backed by Chinese investment, a collapsed bridge forces drivers to detour before they reach an artificial city emerging from palm oil trees where condos, roads and shops lay empty.
Aimed at middle-class Chinese buyers, Forest City has weathered scant sales, Chinese currency controls, a pandemic shutdown and public anger at China’s growing influence in Malaysia. Read more>>
Surprise Victim Country Garden Could Be Worse Than Evergrande for China Economy
The catastrophic crash in Country Garden Holdings, once the gold standard in China’s property industry, has cost stock and bond investors steep losses. Now, the developer stands to potentially inflict wider damage on the economy than the high-profile default of China Evergrande.
The company’s stock has declined 67 percent this year, knocking HK$49.2 billion ($6.3 billion) off its market capitalisation and shrinking its market value to $3.1 billion, as a cash crunch took the market by surprise. Its $14 billion worth of outstanding local and foreign-currency bonds have lost at least 90 percent of their face value, according to Bloomberg data. Read more>>
Cromwell Crashes to $287M Loss but Lands Buyer for Polish Centres
Office landlord and funds house Cromwell Property Group has plunged to a A$443.8 million ($287.2 million) loss but says it will slash debt after finding a European investor to buy the bulk of its troubled Polish shopping centre portfolio.
The group, chaired by corporate raider Gary Weiss, took heavy write-downs on its portfolio, including on local office blocks, revealing that its suburban and lower-grade buildings were under pressure but tenants were not leaving for premium towers. Read more>>
Japan’s Old Abandoned Houses Draw Foreign Buyers
Coline Aguirre, a Parisian, fell in love with Japan and its culture after spending a year there as an exchange student eight years ago. So when the opportunity to buy a 300 square metre (3,229 square foot) property in the central prefecture of Nara for just JPY 4.9 million ($33,000) came along, she knew she had found her dream home.
With enough savings in the bank, Aguirre bought the house — which had stood empty for several years — in 2021. The property, which dates back about a century, had two gardens and needed major repairs, so the 25-year-old reckoned a total investment of JPY 9 million. Read more>>
Tune in again soon for more real estate news and be sure to follow @Mingtiandi on X, or bookmark Mingtiandi’s LinkedIn page for headlines as they happen.
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