S&P Goes Negative on GLP and GLP China and More Asia Real Estate Headlines

Scepticism of Chinese property companies may now be spreading even to the much admired logistics sector as a credit rating giant unveils a dimming outlook for GLP. Also in the news today, Evergrande has $4.5 billion of fresh debt trouble and PAG’s data centre unit drops plans to acquire an Australian operator.

S&P Highlights GLP and GLP China on Related Party Transactions

S&P Global said on Tuesday that it changed its outlook to negative from stable for GLP Pte Ltd and GLP China Holdings Ltd, while maintaining its existing rating, citing volatile intra-year consolidated debt balance and a high proportion of lumpy nonrecurring EBITDA accentuate financial risk.

The ratings agency said that it has revised the management and governance scores for GLP and GLP China to fair from satisfactory owing to significant related-party transactions and weakened disclosure due to confidential transactions. S&P also announced that it has revised its rating outlook on GLP and GLP China to negative from stable. Read more>>

Evergrande Gets Notice From Shengjing Bank on $4.5B Unpaid Debt

Debt-laden property developer China Evergrande Group said on Tuesday its unit received a notice of enforcement for unrecoverable funds from Shengjing Bank Co Ltd. The bank said it failed to recover funds totalling RMB 32.6 billion yuan ($4.5 billion), which was provided to the unit from 2020 to 2021, according to Evergrande.

In early September, state-owned companies of the Chinese northestern city of Shenyang bought Evergrande’s shareholding in Shengjing Bank in an auction for RMB 7.3 billion. Read more>>

PAG’s Flow Drops Acquisition of Aussie Data Centre Operator

After PAG Real Estate said in August that its digital infrastructure unit Flow would acquire Australian data center firm DXN for A$26 million ($18 million) in cash, that deal has now collapsed, despite an attempt at restructuring two months ago.

In September the two parties had trimmed back the deal for the money-losing Aussie firm to invole Flow only acquiring DXN’s modular manufacturing unit, with the latter retaining the colocation business. However, the deal has now been completely abandoned, according to a DXN statement to the Australian stock exchange. Read more>>

Korea’s KB Asset Management Links Up with US Fund Manager Bridge

Bridge Investment Group Holdings and KB Asset Management announced on Tuesday that they have entered into a strategic relationship designed to strengthen KBAM’s overseas real estate management and investment capabilities and provide additional opportunities for Bridge to raise capital in Korea.

This relationship will provide KBAM opportunities to expand and strengthen its overseas real estate management capacities. KBAM plans to enhance its deal-sourcing capabilities by utilizing Bridge’s real estate investment network across the U.S. and secure joint investment opportunities. Moreover, KBAM expects to grow operational expertise in the U.S. by collaborating on screening and due diligence processes of U.S. investments as well as exchanging human resources with Bridge. Read more>>

Auditor Exits Raise Governance Questions for Mainland Developers

Auditors of at least 14 Hong Kong-listed Chinese property firms have exited this year, securities filings showed, raising governance concerns about the debt-ridden developers several of whom are yet to publish long-pending financial results.

Embattled developers including Sunac China, Shimao Group and Kaisa Group are among those whose auditors have parted ways in recent months. In many cases, firms outside the Big-Four accounting firms have been roped in as replacements. Read more>>

Central Bank Chief Says Singapore’s Rising Property Prices Now Under Control

Singapore can absorb record inflows of new money, the central bank chief said, allaying concerns of a real estate bubble even as rents and prices surge to unprecedented highs.

The Asian financial hub attracted S$448 billion (US$317 billion) last year, 59 per cent higher than the previous year, the latest data from the Monetary Authority of Singapore show. Read more>>

Evergrande, Sunac Due to Face Hong Kong Winding Up Petitions This Month

Some of China’s most-indebted developers face winding-up case court hearings in Hong Kong this month, as the nation’s property-debt crisis increasingly pushes creditors to seek what little recovery they can get.

Heavyweights China Evergrande Group and Sunac China Holdings are on the docket in November. Global money managers will be closely watching after both firms defaulted on dollar bonds in the past year. Read more>>

Chinese Developer Bonds Hit New Lows

The bottom has fallen out of the market for bonds from Chinese property developers.

The dollar bond prices of real-estate companies in China have plummeted to new lows, with some trading below 10 cents on the dollar. That reflects a loss of investor confidence in the sector, following a series of bond defaults that have shortchanged international investors, and a unrelenting downturn in the country’s property market. Read more>>

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Note: This story has been revised to clarify that while S&P has changed its outlook on GLP and GLP China to negative from stable, it has maintained its credit rating for the two entities. Mingtiandi regrets any misunderstanding.