Times China Defaults on Two Offshore Bonds and More Asia Real Estate Headlines

In today’s roundup of regional news headlines, Times China becomes the latest mainland developer to slip into default, while Sunac China wins a crucial lifeline from creditors, and Dutch pension fund PGGM says it is cutting back its new commitments to Asian real estate.

Times China Misses Bond Payments as State Rushes to Save Sector

A Chinese developer has defaulted on two dollar bonds and is halting payments on offshore notes, the latest delinquencies despite a plethora of recent government steps to ease the sector’s liquidity crunch.

Times China Holdings did not pay coupons on two dollar notes before grace periods ended within the past week, the company said in a Wednesday night filing with Hong Kong’s stock exchange. An event of default occurs if the company fails to pay interest within 30 days of the due date, according to a circular for one of Times China’s dollar bonds. Read more>>

Sunac Buys Time as Domestic Bondholders Agree to $2.3B Debt Rollover

Sunac China has won a financial lifeline from creditors who have agreed to roll over RMB 16 billion ($2.32 billion) worth of domestic bonds, or 85 percent of all the developer’s local-currency debt, to help it recover from the worst industry slump in decades.

The rollover plan was approved by bondholders in a meeting several days ago, the nation’s fourth-largest developer said Wednesday. On average, the extension involving 10 bond issues will give the firm an extra 3.5 years to service its debt obligation, it said. Read more>>

Dutch Pension Fund PGGM Puts Brakes on Asian Property Investment

Netherlands-based pension fund PGGM is slowing the pace of its Asian property allocations as part of a worldwide brake on new investments in its €18 billion ($19.07 billion) global property portfolio.

Maarten Jennen, a senior director and strategist for private real estate at PGGM Investments, the investment management arm of the €277 billion fund, told AsianInvestor that the need to rebalance its portfolio following falls in its equity and fixed-income portfolios last year, in addition to sharp moves in currencies, meant the fund was slowing down its property investing. Read more>>

AP Strategic Unit Proposes to Sell China Hotel Assets for $11.6M

A subsidiary of Asia-Pacific Strategic Investment is looking to sell its stake in a China hotel management company, hotel and its related assets for RMB 80 million ($11.6 million).

The subsidiary, Grand Canal Culture Tourism Group, which is 78.5 percent owned by AP Strategic, expects net proceeds of RMB 70.4 million from the transaction, after deducting estimated taxes, professional fees and other costs. Read more>>

Homevest Reaches S$100M Value on Singapore’s 1exchange

Malaysian property group Homevest surpassed S$100 million ($74.6 million) in market valuation after listing on 1exchange, Singapore’s first private securities exchange.

Homevest consists of three divisions: Homevest Capital, Homevest Living and Homevest Development. Its signature programme, Home Ownership Programme for Employees (HOPE), is aimed at enabling corporations and small and medium-sized enterprises to empower their employees to own a home. Read more>>

Link REIT’s Entry Into Singapore Looks to Be Well-Judged

A yield of 5 percent on commercial properties that require active management sounds unexciting when the cut-off yield of the last six-month Singapore treasury bill issuance of 2022 was 4.28 percent. Still, Hong Kong-listed Link REIT scored a good deal with its purchase of malls from Mercatus Co-operative for S$2.16 billion ($1.6 billion).

On 28 December, Link REIT said it had agreed to buy the entire interest held by NTUC Enterprise’s real estate arm Mercatus in suburban malls Jurong Point and Swing By @ Thomson Plaza, which occupies Levels 1 and 3 of Thomson Plaza. Read more>>

Singapore’s Prime Residential Prices to Moderate in 2023: Knight Frank

Prices of prime residential properties in Singapore are expected to climb at a more “moderate” pace in 2023, even as the inventory of units available continues to shrink, according to Knight Frank.

In a report on the prime housing market released Wednesday, Knight Frank noted that there were substantially fewer non-landed luxury homes sold in 2022, despite a slight bump in sales in the second half of 2022. This is in line with the dive in overall sales volume in the private housing market last year, when sales transaction volume plummeted 36 percent to 21,437 units for the whole of 2022. Read more>>

Chinese Property Stock Rally May Soon Run Out of Steam

A rally in the shares of Chinese developers in the last few months of 2022 may soon grind to a halt, as a further decline in home sales begins to outweigh a recent financing boost in the minds of investors.

Contracted sales at major developers will probably drop by 20 percent this year, according to CCB International, the investment banking unit of China Construction Bank. Read more>>

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