Oyo’s losses are stacking up as the company expands in China
SoftBank-backed losses lead the way in Mingtiandi’s roundup of Asia real estate headlines today with the news that Masayoshi Son’s favourite budget hotel chain has reported that its net losses reached $335 million for the year ended 31 March 2019.
In other news around the region, a Californian pension fund has renewed its partnership with South Korea’s POBA to co-invest $312 million in US multifamily properties, while a mainland developer slashes prices by up to 25 percent. Elsewhere, a Beijing-based developer is said to be mulling the $1 billion sale of the Ironman Triathlon business.
Oyo Losses Widen to $335M on China Expansion
SoftBank-backed Oyo Hotels and Homes said on Monday that its losses widened more than six-fold in the year to March 2019, as the India-based hotel chain spent heavily to expand into China.
The news comes weeks after Oyo began laying off roughly 2,000 employees in India, as it inches toward profitability, and days after its major investor SoftBank Group reported dismal quarterly results. The Japanese firm owns about 46 percent of Oyo. Read more>>
CalSTRS, POBA Set Up $312M US Multifamily Investment JV
California State Teachers’ Retirement System (CalSTRS) and Public Officials Benefit Association (POBA) will set up a $312.5 million joint venture to expand co-investment into equities in US multifamily properties, according to a Korean media report.
The venture will become their third 50:50 JV following two $400 million ventures they launched in 2018 and 2019 respectively to invest in US real estate debts. Read more>>
China Home Price Growth Near 2-year Low
New home prices in China grew at their weakest pace in nearly two years in January as the economy slowed and a fast-spreading coronavirus outbreak brought the country’s property market to a standstill.
Worryingly, analysts say the worst is yet to come for the property market, noting that with stepped-up measures to contain the spread of the epidemic, aggressive price-cutting by developers and widespread business disruption will be fully reflected only in the coming months. Read more>>
China Evergrande Slashes Prices by 25%
China Evergrande Group, the third-largest developer by sales in the country, said on Sunday that it will give a 25 per cent discount for all its properties on sale from 18 February to 29 February.
The offer comes as property firms fear that the coronavirus outbreak would hit the market. Evergrande said it will also offer 22 per cent discount for all its China properties being sold, including office and commercial properties, next month. Read more>>
Mainland Developers Face Refinancing Failure as Coronavirus Hits Liquidity, Fitch Says
Chinese companies are facing increasing refinancing pressure as the deadly coronavirus outbreak rages on, with smaller property developers the most at risk of failure, according to the latest report by Fitch Ratings.
The COVID-19 outbreak has impacted the operations of nearly all of the 166 Chinese companies rated by the credit rating company, it said in the report published on Monday. They have a combined RMB 583 billion ($83.5 billion) worth of domestic and offshore debt coming due between February and June this year. Read more>>
Wanda Sports Mulling $1B Sale of Ironman Triathlon
Wanda Sports Group, the China-based sports marketing and event promoter, is considering selling the Ironman triathlon business it bought in 2015, according to people familiar with the matter.
The company, part of Chinese billionaire Wang Jianlin’s conglomerate, is working with an adviser and has held discussions with some private-equity buyers that expressed interest in the business, said the people, who asked not to be identified as the information is private. Wanda Sports is seeking about $1 billion for the business, one of the people said. Read more>>
Tune in again tomorrow for more news, and be sure to follow @Mingtiandi on Twitter, or bookmark Mingtiandi’s LinkedIn page for headlines as they happen.
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