SHK Now Priced at Less Than Half of Asset Value and More Asia Real Estate Headlines

The decline in Hong Kong’s commercial property market leads today’s property news today, as the billionaire Kwok family sees their fortunes slide by nearly $8 billion as Sun Hung Kai Properties, the developer that they control sees its stock price pounded by investors.

SHK’s competitors at Wharf Holding, had their own bit of bad news, with the developer reporting a HK$1.7 billion loss for the period from January through June, and down in Singapore, the managers of Sabana REIT are busy defending their proposed merger with ESR-REIT against activist investors.

Sun Hung Kai Trades at a Discount as Hong Kong Developers Pounded

If ever there was a bad time to own the biggest developer in the world’s most expensive real estate market, this would be it.

Battered by Hong Kong’s worst political and economic crises since at least 1997, shares of the Kwoks’ Sun Hung Kai Properties are now trading at less than half the value of the company’s net assets – within a hair’s breadth of the most depressed level on record. Read more>>

Wharf Reports Loss of HK$1.7B for First Half

Wharf (0004) recorded a net loss of HK$1.74 billion ($225 million) in the first half, compared to a net profit of HK$2.45 billion a year before, due to severe disruptions caused by Covid-19.

Excluding losses from revaluation of investment properties, the company’s underlying net loss was HK$1.13 billion in the first six months, compared to an underlying net profit of HK$2.24 billion a year before. First-half revenue decreased by 31 percent year-on-year to HK$5.55 billion, with mainland development properties reporting about 60 percent lower revenue recognition. Read more>>

Frasers L&C Trust to Acquire Pair of Aussie Assets From Sponsor

Frasers Logistics & Commercial Trust (FLCT) is looking to acquire two properties in Australia and the UK from its sponsor Frasers Property as well as sell its remaining half stake in a cold storage facility in Australia, said the trust’s manager, which has also released its latest business update indicating that the coronavirus pandemic has not had a material impact on FLCT’s portfolio.

In a bourse filing late Monday night, the manager announced that FLCT has proposed to acquire a logistics property in the Australian state of Victoria as well as a business park in Thames Valley in the UK for a total of about S$89.9 million in cash, from Frasers Property. Read more>>

Sabana REIT Says ESR Merger Not an Asset Sale

THE proposed merger of Sabana Shari’ah Compliant Industrial Real Estate Investment Trust (Sabana Reit) with ESR-Reit is not an asset sale, but a merger by way of a trust scheme of arrangement that will enable unitholders to stay invested in a “stronger, larger and more resilient enlarged Reit”, Sabana Reit’s manager clarified in a bourse filing on Wednesday.

The manager was responding to comments by activist fund Quarz Capital Management on Thursday, which criticised the implied offer price, representing a 26 per cent discount to Sabana Reit’s book value, as “too low”. Read more>>

Mainland Developers Sold $6B in Offshore Bonds Last Month

Chinese property developers sold 33% more offshore dollar bonds in July than a year earlier, as the debt-laden industry seized a window of robust investor demand ahead of increasing market uncertainty to raise capital.

The total issuance by 16 developers for the month rose to $6 billion, the highest since January, Refinitiv data showed, and the strong pace is continuing into August. Read more>>

Singapore Retail Sales Fell 28% in May

Retail sales in Singapore fell more slowly in June fell, according to data released by the island nation’s Department of Statistics on Wednesday (Aug 5).

Takings at the till slid 27.8 per cent compared with the same period last year, after sinking a record 52 per cent in May and 40.3 per cent in April. The slower rate of decline came on the back of the gradual reopening of the country’s economy, as Singapore entered phase one on June 2 and phase two on June 19. Read more>>

ARA US Hospitality Trust Suffers Loss in 1H

ARA US Hospitality Trust (ARA H-Trust) on Wednesday posted a net property loss of US$2 million and no distributable income for the half year ended June 30, 2020 as earnings took a hit due to the impact of the Covid-19 pandemic.

Listed on the Singapore Exchange on May 9, 2019, the stapled group had expected a half-year net property income of US$29.5 million in its initial public offering (IPO) forecast. It also anticipated distributable income of US$19.7 million and distribution per stapled security of 3.47 US cents a year earlier. Read more>>

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