Novaland’s NovaWorld Phan Thiet project
In today’s roundup of regional headlines, hard-hit Vietnamese developer Novaland delays making payments on a $42 million bond, and Knight Frank predicts a full-year drop in Hong Kong’s lived-in house prices. Also making the news is a stalled project on Hong Kong’s Ap Lei Chau island and rising levels of bad loans in Korea.
Vietnam Developer Novaland Delays Bond Payments
Novaland has delayed payments on a VND 1 trillion ($42.6 million) bond that matured on 18 May, as the Vietnam developer faces a credit crunch amid difficult market conditions.
Novaland is among the hardest hit by turmoil in Vietnam’s real estate sector, which has been caused by high debt and a surplus of high-end property, exacerbated by tighter credit rules adopted last year and the arrest of high-profile businesspeople. Read more>>
Hong Kong’s Lived-In Home Prices to Drop 5% This Year: Knight Frank
Another property consultancy has joined a growing chorus that believes lived-in home prices are destined to slide in Hong Kong as sales sputter after a recovery in the first quarter proved short-lived.
Knight Frank on Monday predicted a 5 percent drop amid high interest rates, a glut of new homes potentially hitting the market and a shrinking labour force. The forecast followed predictions of a decline from both JLL and Citi. Read more>>
Stalled Logan-KWG Project on Hong Kong’s Ap Lei Chau Highlights Developer Distress
The Corniche was supposed to generate HK$30 billion ($3.8 billion) in sales after the developers bought the land overlooking the South China Sea for a record price.
Six years later, the project sits between a sewage treatment facility and a driving school, bearing little resemblance to the French Riviera its name evokes. The nearby shopping mall — converted from an industrial building — sells discounted clothes and furniture. Read more>>
Korea’s Loan Delinquency Rates Soar, Outlook Expected to Worsen
South Korean banks are seeing loan delinquency rates surge due to the increase in lending during the pandemic and a series of rate hikes. The rates for households hit three- to five-year highs last month as those who borrowed heavily to finance their real estate, business or stock investments cannot afford their payments.
Based on data from the five largest Korean banks — Kookmin, Shinhan, Hana, Woori and Nonghyup — the won-denominated loan delinquency rate at the end of April averaged 0.304 percent. That’s 11.8 percent higher than a month earlier and 63.4 percent higher than a year ago. Read more>>
Crisis Looming for Korea’s Overseas Real Estate Funds
As a sharp interest rate hike in the US has led to a commercial real estate bankruptcy crisis, a Korean lawmaker says that South Korea’s overseas real estate funds to mature within three years have reached KRW 30 trillion ($22.7 billion).
As a decline in real estate value due to high interest rates makes it difficult to sell office buildings, hotels and logistics centres included in such funds, concerns are being raised that fund repurchases will be suspended or maturities will be extended. Read more>>
Sekisui Puts Queensland’s Ripley Town Centre on the Market
Japanese property giant Sekisui House Australia is selling its Ripley Town Centre master-planned community in Queensland as part of a global strategy to focus on residential projects.
The whole project had an end value of A$1.5 billion ($990 million), and Stage 1 opened in May 2018. Read more>>
EC Healthcare’s Shock Bid Crashes Wesfarmers’ Botox Party
Here’s an early contender for M&A surprise of the year.
Hong Kong-based EC Healthcare, a complete unknown in Australia and with no ties at all to the local market, has come from left field with an all-cash offer for botox and injectables clinics owner Silk Laser Australia. Read more>>
India’s Operational Office Stock Offers Future REIT Listings Worth $61B
Indian commercial real estate offers rent-yielding Grade A offices spread over 393.7 million sq ft assets that can be listed through REIT or REITable assets worth over $61 billion across the top seven cities, according to data from JLL India.
So far, India has witnessed the listing of three office-asset-based REITs, garnering a robust response from institutional and retail investors since 2019. Read more>>
Tune in again soon for more real estate news and be sure to follow @Mingtiandi on Twitter, or bookmark Mingtiandi’s LinkedIn page for headlines as they happen.
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