In today’s roundup of regional news headlines, Chinese developer Vanke gets the green light from mainland authorities to spin off its property management unit in a Hong Kong IPO, while the pending sale of Pfizer’s South Korean headquarters hits a snag.
Real estate behemoth China Vanke has received regulatory approval to spin off its property management services unit for an initial public offering in Hong Kong.
The China Securities and Regulatory Commission accepted Onewo Space-Tech Service’s application on 1 April to issue 180 million shares on the Hong Kong stock exchange, the Shenzhen-based parent company said Monday. It still has to pass an HKEX hearing. Read more>>
South Korea’s GRE Partners Asset Management, a real estate investment firm, recently suspended the sale of Pfizer Pharmaceuticals’ Korea headquarters. GRE, which started the sale process in May and chose JLL Korea as a lead manager last month, saw the bid-ask spread as too wide, market insiders said.
The Pfizer Tower is located in Myeong-dong in Seoul’s central business district. The office tower has 15 stories above ground and four underground with a gross floor area of 15,868 square metres (170,802 square feet). It was built on land measuring 1,887 square metres in 1984. Read more>>
Chinese banks would forfeit RMB 31 billion ($4.6 billion) of interest income from mortgages under a proposal to give homebuyers in stalled projects a temporary payment holiday, according to estimates from Citigroup.
The figure amounts to 1.2 percent of estimated net profit in the banking system for 2023, assuming that RMB 561 billion in home loans would be at risk if Beijing signs off on the plan, analysts led by Judy Zhang wrote in a research report Tuesday. Credit risk from the latest round of stress in the property sector is manageable for most banks, the analysts reckoned. Read more>>
China risks a hard landing in the real estate sector and needs to step in to resolve both the liquidity crunch for developers and the recent boycotts of mortgage payments, a former official said.
“Preventing the risk of a ‘hard landing’ in the property sector should be high up among our priorities and given serious attention,” Zhu Guangyao, who was vice finance minister between 2010 and 2018, said during an online seminar Monday. Local governments need to handle the boycotts well and “be strictly on guard to prevent it from spreading and triggering a banking crisis”, said Zhu, who is now a counsellor to the State Council, which is China’s cabinet. Read more>>
At least a fifth of rated Chinese property developers will end up becoming insolvent, putting as much as $88 billion worth of their distressed bonds at risk, according to S&P Global Ratings.
While some developers have resorted to debt extensions and bond exchanges to buy time to avoid default, investors will soon lose patience and press their claims through the courts or debt restructuring if a recovery of the sector does not play out by the first quarter of 2023, the ratings agency said. Read more>>
Fitch Ratings on Monday downgraded China’s Guangzhou R&F Properties and its unit R&F Properties (HK) to “restricted default”, one notch above “default”, after the property developer extended maturities for its offshore bonds.
Last week, R&F received consent from its creditors to extend maturities for $4.9 billion worth of offshore bonds, the latest such move by a Chinese developer to avoid default. Read more>>
The value of bond defaults in China in 2022 has already more than doubled the full-year total from last year, as the accelerating debt crisis in the country’s $2.7 trillion property market spills over into other areas of the economy.
Defaults by Chinese issuers have exceeded $20 billion so far this year, compared with about $9 billion for all of last year, with property developers accounting for most of the defaults, said Augus To, deputy head of research at ICBC International. Read more>>
Singapore-listed Boustead Projects’ wholly owned engineering and construction subsidiary, Boustead Projects E&C, has been awarded a S$300 million ($215.5 million) design-and-build contract, the real estate solutions provider announced Monday.
The latest contract, awarded by a Fortune 500 corporation, is the group’s largest project on record, Boustead Projects said. Read more>>