Shimao’s Royal Meridien Hotel in Shanghai has its antennae up for bond news
In today’s roundup of regional news headlines, fresh concerns materialise over mainland developers as a drop in Shimao Group’s bonds sparks a wider sell-off, Evergrande’s creditors brace for a drawn-out restructuring process, and private equity investors lose their taste for China real estate.
Chinese Developers Slump as Shimao Bonds Plummet
A sudden drop in the bonds of developer Shimao Group Holdings sparked a broader sell-off amid renewed concern over the health of Chinese property firms.
Chinese junk bonds fell two cents after Shimao’s dollar bonds dropped as much as 10 cents on the dollar, according to credit traders. Trading was halted in three of the company’s renminbi bonds after they plunged. The group’s Hong Kong-listed shares tumbled almost 14 percent, poised for their biggest loss since 2008. Read more>>
Evergrande Bondholders Settle In for Lengthy Restructuring
Evergrande’s international bondholders are bracing themselves for a prolonged restructuring process as investors attempt to recoup funds loaned to China’s most indebted property group.
Fitch Ratings on Thursday placed the real estate developer into “restrictive default” after Evergrande failed to make a crucial interest payment by the time a 30-day grace period expired. The missed instalment has dashed the hopes of some investors, who were expecting the sprawling company to make a last-minute payment. Read more>>
Asia Pacific Office Market Expected to Be Upbeat Next Year
Singapore, Japan and South Korea are predicted to experience “above-average growth in 2022”, driven by strong demand for exports, according to a Cushman & Wakefield report titled Catch 22 — Asia Pacific Commercial Real Estate Outlook 2022.
C&W expects the Asia Pacific economy to regain its position as the highest-growth economy next year with real average annual GDP growth of 4.5 percent and total regional investment volume on a par with the 2019 peak at around $180 billion. Read more>>
Record $4.5B in Lived-In HK Subsidised Homes Sold in 2021
Hong Kong sales of lived-in subsidised homes rose to a record HK$34.9 billion ($4.5 billion) for the first 11 months of the year, as buyers rushed for cheaper alternatives amid a surge in private home prices that have pushed them beyond general affordability.
The transaction value of lived-in flats under the Home Ownership Scheme has exceeded 2020’s HK$26.05 billion, according to Centaline Property Agency. The total number of deals in this period, at 6,530, was the highest since 1996, which saw 6,520 transactions. Read more>>
OCBC’s Lee Family Selling Homes in SG’s District 10 for $31.6M
Pulau Properties — owned by the Lee Foundation and members of the Lee family that founded OCBC Bank — is selling three pairs of semi-detached houses on a freehold site in Coronation Road West for S$43.18 million ($31.6 million).
The price for the District 10 property works out to S$2,000 per square foot on the land area of 21,587 square feet (2,005 square metres). Read more>>
Private Equity Firms Cool on China After Property Crisis
Private equity investors are cooling on China, pulling back from real estate amid mounting troubles at some of the nation’s biggest developers and with many also planning to cut bets on startups.
Among international investors, a third will reduce their exposure to Chinese real estate funds over the next three years with none planning an increase, according to a survey by alternative asset manager Coller Capital. Read more>>
Sultan Plaza, City Plaza Join Ranks of Singapore’s En Bloc Hopefuls
As more ageing properties in Singapore are trying again to go en bloc, the Sultan Plaza commercial building and the City Plaza mall may be next in line.
If their collective sale tenders are launched, the reserve prices could be slashed to S$360 million ($263.2 million) for Sultan Plaza in the Beach Road area and S$850 million for City Plaza in Paya Lebar, Lianhe Zaobao reported Monday. Read more>>
Abandoned Projects Shatter Confidence in China’s Housing Market
Construction cranes stand idle in China’s Yunnan Province, on the easternmost edge of the Himalayas. Building has ground to a halt on Hainan, off the coast of Vietnam, and up in Heilongjiang, along the Russian border.
Across China, tens of millions of square feet of unfinished apartment buildings — the legacy of a real estate boom gone awry in 2021 — are derailing countless dreams of owning a home. Read more>>
Tune in again soon for more real estate news and be sure to follow @Mingtiandi on Twitter, or bookmark Mingtiandi’s LinkedIn page for headlines as they happen.
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