Country Garden Warns H1 Loss Could Widen to $3B and More Asia Real Estate Headlines

Widening losses at a pair of struggling mainland developers lead today’s review of real estate news from around the region, as home sales continue to slow despite government policy support. Also in the news, one of the biggest sovereign funds in the Middle East aims to exit a Sydney office project before the development breaks ground.

China’s Country Garden Warns H1 Loss Could Widen to $3B

Country Garden Holdings said its first-half loss could reach as high as $3 billion, with China’s prolonged property crisis continuing to weigh on the embattled developer.

The builder said its preliminary net loss will be in the range of RMB 18.5 billion to RMB 21.5 billion ($2.6 billion to $3 billion) for the six months to June, reflecting a reduced scale of settlement for low-margin development projects and increased asset impairments. That compares with a loss of RMB 15.1 billion a year earlier, according to a Friday filing with the Hong Kong stock exchange. Read more>>

China Vanke Loss Grew to $1.7B in H1 as Home Completions Slow

China Vanke reported a wider first-half loss, underscoring ongoing challenges even after the developer received a financial lifeline from its hometown government in Shenzhen.

Vanke posted a net loss of RMB 11.95 billion ($1.7 billion) in the six months to June, widening from a RMB 9.85 billion loss a year earlier. The results stemmed mainly from declines in home settlements and suppressed gross margins, Vanke said in a filing. Read more>>

ADIA Stake in Sydney Office Tower on Market for $324M

Lendlease is chasing a new investment partner for a scheme to develop one of Australia’s tallest-ever office towers in Sydney’s central business district, as the project’s Middle Eastern co-owner, the Abu Dhabi Investment Authority, plots an exit.

Lendlease’s flagship office fund and ADIA had proposed a new multibillion-dollar scheme known as the O’Connell Precinct, which would rise 309 metres (1,014 feet) and have 72 storeys. Lendlease worked with ADIA on assembling properties around the 1 O’Connell tower, and the Mideast group’s interests are worth an estimated A$500 million ($324.4 million). Read more>>

CapitaLand Explores Distressed Opportunities in Hong Kong-Listed Companies

Singapore’s CapitaLand Investment is considering providing rescue capital to listed Hong Kong companies that would likely be among the first to benefit if the troubled property market recovers, according to an executive.

Not as much capital is going into Hong Kong and China, and that provides opportunities for investors willing to take calculated risks, Gabriel Fong, head of the special opportunities group at the real estate investment manager, said Thursday at a conference in Singapore. Read more>>

Singapore’s JTC Reopens Tender for 208-Room Punggol Hospitality Project

A tender to fit out and operate a 208-room hospitality project in Singapore’s Punggol Digital District was launched Friday after an earlier expression of interest exercise closed with no award in April.

The property, which sits on a site of 8,140 square metres (87,618 square feet), comes with a 60-year lease and is integrated with a mixed-use tower in a 50 hectare (124 acre) business park shaping up in Punggol. Read more>>

Hong Kong Interest Rates Rise as HKMA Tapers Defence of Dollar Peg

A “low-rate honeymoon” for Hong Kong borrowers has come to an end with an increase in the interest rate banks use to set loan prices, a mixed blessing that drives away carry traders but threatens a property market recovery and discourages corporate borrowing, according to analysts.

The Hong Kong Monetary Authority intervened 12 times in the currency market over the past two months, successfully defending the local currency’s peg to the US dollar by buying HK$119.95 billion and selling $15.28 billion between 25 June and 13 August. Read more>>

Malaysia’s Sime Darby Property Rules Out REIT

Sime Darby Property has ruled out plans for a REIT listing for now. The Malaysian group’s managing director and CEO, Azmir Merican, said it will prioritise building up its recurring income portfolio before anything else.

“It is too premature to talk about a REIT listing, and we want to have assets that are ripe and ready for us,” Azmir said at a Friday press conference. “We are in the middle of executing our plans to build up recurring income, and we have to do a lot more here before we talk about what do we do or any possible monetisation of these assets.” Read more>>

Influx of Wealthy Mainlanders Fuelled 8.6% Jump in HK Luxury Housing Rents in Q2

Hong Kong’s luxury home rents increased the most globally in the second quarter, according to Knight Frank, benefiting from an influx of high-net-worth individuals through the capital investment scheme.

A survey tracking 16 cities worldwide showed that upscale residential rents climbed 8.6 percent in the April-June period from a year earlier, the consultancy said. Tokyo came a close second with an 8.3 percent increase, followed by New York at 6.9 percent. Singapore ranked 13th with a 1.5 percent gain. Read more>>

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