Zhongzhi’s Zhongrong unit had been a major source of funding for mainland developers
China’s latest corruption case leads the real estate news from around Asia again today, with reports emerging that authorities have detained suspects in a newly launched investigation. Also making the headlines, Hong Kong developers are turning to private credit as a funding gap looms and Link REIT opens a Guangzhou mall.
China Detains Suspects as Probe of Shadow Bank Zhongzhi Opened
Authorities have opened an investigation into Zhongzhi Enterprise Group and detained several suspects days after the shadow bank, one of mainland China’s largest, revealed a staggering $36 billion shortfall that could threaten the stability of the country’s financial system.
Police in Beijing have imposed “criminal compulsory measures” against several suspects, including an individual surnamed Xie, according to a statement on WeChat on Saturday. Investors should actively cooperate with the police investigation and evidence collection, the statement added. Read more>>
Stressed Hong Kong Developers Seek Private Credit as Funding Gap Looms
Private credit lenders are circling distressed developers in Hong Kong, with a record $23.4 billion in bank loans coming due next year for the downtrodden sector.
The potential funding gap is drawing a range of players — including family offices, private equity firms and asset managers such as PACM Group Holdings — who can stomach offering high-risk, high-yield loans for collateral in one of the world’s most expensive property markets. Read more>>
Link REIT Opens Revamped Guangzhou Mall
Link REIT, Asia’s largest real estate investment trust, has opened a renovated shopping mall in Guangzhou, a clear indication of its focus on mainland China, with a top executive firmly rejecting rumours of asset sales despite the prolonged economic recovery.
The Hong Kong-listed REIT acquired the shopping mall, located in the southern Chinese city’s core business district of Tianhe, for RMB 3.2 billion ($451 million) in June 2021. Read more>>
Japan’s Tallest Skyscraper Opens in Tokyo
Japan’s new tallest building opened in Tokyo on Friday, taking the title from an Osaka skyscraper.
The 330 metre (1,083 foot) Azabudai Hills Mori JP Tower is not Japan’s highest structure, which is still the Tokyo Skytree, a broadcasting and observation tower in the capital’s east, which stands at 634 metres. Read more>>
Equinix Set to Open Korean Data Centre in Q1 2024
Equinix this past week announced SL4, a new International Business Exchange retail colocation facility due to launch in the first quarter of 2024. The facility will be housed inside SL2x, an upcoming xScale hyperscale data centre located in Goyang-si, Gyeonggi-do, and will provide capacity for 475 cabinets.
SL4 will be directly connected to Seoul-based SL1, Equinix’s first IBX data centre in Korea, via a low-latency optical cable. It will also be connected to the Korea Internet Neutral Exchange and Sejong Telecom’s Korea Internet Exchange. Read more>>
China Needs to Sway Banks to Make Its Property Rescue Effort Work
Chinese developer stocks and bonds soared this week on government plans to push lenders to loan more credit to struggling developers. Convincing the banks to do so may be a bigger challenge.
Among the measures being considered is allowing banks to offer unsecured working capital to some homebuilders for the first time, Bloomberg News reported Thursday. That would be a major boost to developers, including Country Garden Holdings, which are trying to complete the construction of millions of homes. Read more>>
JPMorgan Says Unsecured Loans to China Developers a ‘Risky Move’
Any step by China to allow banks to provide unsecured loans to qualified developers “would be a risky move” for the lenders, according to JPMorgan Chase.
Such a measure “would be negative for banks as it would raise concerns about national service risk and credit risk in the medium term,” analysts including Katherine Lei and Karl Chan wrote in a note. What’s more, implementation “would be challenging, as banks could circumvent such guidance due to credit risk concerns.” Read more>>
Vietnamese Tycoons Held in Wave of Fraud Cases
Vietnamese prosecutors announced charges against a major drinks tycoon on Friday, the latest in a wave of arrests targeting top business leaders accused of embezzling billions of dollars.
Truong Quy Thanh, the head of Tan Hiep Phat Group — which makes some of the country’s most popular soft drinks — is to be prosecuted along with his two daughters for appropriating $31.5 million. Read more>>
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