The ongoing financial struggles of shared office provider WeWork lead today’s collection of real estate headlines from around the region, with the company said to be planning a formal bankruptcy filing as early as next week. Also in the news, the number of Hong Kongers owing banks more than their homes are worth has tripled since June and China’s home sales slide shows signs of slowing.
WeWork plans to file for bankruptcy as early as next week, a source familiar with the matter said on Tuesday, as the SoftBank Group-backed company struggles with a massive debt pile and hefty losses.
Shares of the flexible workspace provider fell 32 percent in extended trading after the Wall Street Journal first reported the news. They have fallen roughly 96 percent this year. Read more>>
Hong Kong’s sliding home prices have snared more mortgage borrowers in negative equity as the market value of their properties decreased at a faster rate than their loan balances, giving policymakers more cause for concern as they grapple to revive the city’s economy.
So-called upside down loans more than tripled to 11,123 cases in the third quarter, according to data released on Tuesday by the Hong Kong Monetary Authority (HKMA). The aggregate value of negative-equity loans also more than tripled to HK$59.3 billion ($7.6 billion), compared with HK$17.4 billion at the end of June. Read more>>
The number of property foreclosures in China rose 32.3 percent in the first nine months of the year, according to a private survey, as homeowners grappled with debt amid a property market slump and shaky economic recovery.
Property foreclosures in January-September rose to 584,000 units from 441,000 in the same period last year, according to a survey by China Index Academy on Saturday, one of the country’s largest independent real estate research firms. Read more>>
China’s housing sales decline slowed in October, following stepped-up efforts from Beijing to support the real estate sector.
The value of new home sales among the 100 biggest real estate companies fell 27.5 percent from a year earlier to RMB 406.7 billion ($55.6 billion), narrowing from a 29.2 percent decline in September, according to preliminary data from China Real Estate Information Corp. on Tuesday. Sales gained 0.6 percent on month. Read more>>
Private real estate fundraising plunged in the third quarter as higher interest rates cooled investor appetites for risk.
Around the world, $18.2 billion was raised by 61 funds in the three months through September, a 71 percent decline from the second quarter, when 117 funds raised $63.4 billion, according to a report by Preqin. It was the slowest rate of fund closures in the present cycle of interest-rate increases, the research firm said. Read more>>
More real estate properties were listed and sold in the auction market in the third quarter of 2023, despite the slowing economy and the higher-than-longer interest rate environment, according to Knight Frank’s market update on Monday.
Auction listings jumped 24.4 percent from 82 in Q2 to 102 listings in Q3 owing to an increase in both mortgagee and owner sale listings. These include repeat listings and exclude properties sold outside of auction, said Knight Frank. Read more>>
Flexible workspace provider WeWork India said on Tuesday it has launched an investment program for early-stage Indian startups, under which it will invest pre-seed or seed capital of up to $200,000 in selected startups.
“Investments by WeWork Labs will focus on helping early-stage startups through a blend of pre-seed capital, competitive guidance and comprehensive business support to help them scale,” the company said in a statement. Read more>>
Chinese developers will benefit from the new funding avenue provided by the spin-off of their shopping centres through REITs, Moody’s said.
The spin-off of shopping centres that are run by Chinese developers will offer an alternative source for these builders to raise money from capital markets and manage their leverage, the international ratings agency said. Read more>>