WeWork Expected to Cut at Least 4,000 Staff This Week and More Asia Real Estate Headlines

The ongoing travails of WeWork lead Mingtiandi’s roundup of Asia real estate headlines today with the news that the shared office giant plans to cut at least a third of its 12,000 person team.

Also in the news, a Singapore government investment fund has seen the value of its real estate investments damaged as a result of the protests in Hong Kong and WeWork’s shelved IPO.

In other news around the region, a Japanese conglomerate is targeting the US with a real estate investment trust, while the battle for the boardroom of United Engineers appears to have been won after Singapore developer pared down its stake in the company to nine percent.

Elsewhere, major developers in India are mulling ways to monetize their office assets, either through private equity investments or setting up real estate investment trusts.

WeWork Expected to Cut at Least 4,000 Staff This Week

WeWork is preparing to cut at least 4,000 people from its work force as it tries to stabilize itself after the company’s breakneck growth racked up heavy losses and led it to the brink of collapse, two people with knowledge of the matter said.

The cuts are expected to be announced as early as this week and will take place across WeWork’s sprawling global operation. Under the plan, the company’s core business of subletting office space would lay off 2,000 to 2,500 employees, one of the people said. An additional 1,000 employees will leave as WeWork sells or closes down noncore businesses, like a private school in Manhattan that WeWork set up. Read more>>

Temasek Exposed by Hong Kong Protests, WeWork IPO Flop

When anti-government protesters rampaged through the Festival Walk in Kowloon on 12 November, they smashed glass panels and some of the 200-odd stores in the sprawling mall. They also inadvertently dented one of Singapore’s biggest investments in the region.

Acquired by Temasek Holdings in 2011 for HK$18.8 billion ($2.4 billion), the retail and office property is now part of the assets in Mapletree North Asia Commercial Trust after a reorganisation in 2013. The real estate investment trust tumbled to a 10-month low in Singapore after the news. Read more>>

Mitsubishi Targets Chicago and Dallas for first US REIT

Trading house Mitsubishi Corp plans to start a real estate investment trust in the US targeting urban rental housing and suburban logistics centres, aiming for $1.5 billion in assets within five years, Nikkei has learned.

The portfolio will include a 25-storey condominium in central Chicago spanning 320 units, as well as a six-story, 340-unit condo in downtown Dallas. The REIT will be the first launched independently in the US by a Japanese company. Read more>>

Oxley Pares Down Shareholding in United Engineers to 9%

Oxley Holdings has pared its stake in United Engineers (UE) to below ten per cent after selling some 62 million shares, representing a 9.73 percent interest, in the open market.

The bulk of the shares were scooped up by Yanlord Investments, whose general offer for UE has turned unconditional after it crossed the 50 percent threshold last Friday. In a bourse filing on Monday, UE announced that Oxley has reduced its stake in the company to 9.19 percent. Read more>>

$14B in PE Pumped into India Real Estate in 5 Years

Indian real estate attracted nearly $14 billion of foreign private equity (PE) between 2015 and the third quarter of 2019, according to the latest Anarock data.

Sixty-three percent ($8.8 billion) of the total foreign investments backed commercial real estate. The residential sector attracted just $1.5 billion of foreign PE in the same period, trailing behind even the retail sector which saw cumulative inflows of $1.7 billion. Read more>> 

Grandjoy to Launch Trio of Beijing Malls

Grandjoy, the property arm of state-owned conglomerate COFCO, will launch three new malls in a new, rejuvenated style starting 2020, as the company scrambles to leverage more cultural designs to tap into rising diversified demands from middle-income earners.

Joy Breeze, its latest mall brand, will first open in Beijing’s Daxing district next year. A further two will begin operation in Beijing’s Fengtai district and Suzhou, Jiangsu province in 2021. Read more>>

Developers in India Looking to Monetize Office Assets

Leading commercial property developers in India such as DLF, Prestige Group, Embassy Group, RMZ, and K Raheja are looking to raise funds to expand their portfolio, pare debt and monetize their assets at a time of high institutional investor interest in office projects.

The companies are looking to raise equity as well as debt, either through private equity (PE) firms and global investors, or through a real estate investment trust (REIT). Read more>>

FBI China Spy Probe Target Linked to $20M US Hotel Scheme

An FBI investigation into a suspected spy for China appears to have broadened, according to recently filed court records that detail a related federal probe into the purchases of multimillion-dollar hotels in San Francisco, Oakland, Dixon and Napa.

In September, Hayward resident Xuehua “Edward” Peng, 56, was arrested and charged with a federal violation of ferrying classified information to Chinese officials using so-called dead drops in Northern California and Georgia. Now, federal prosecutors have revealed Peng was implicated in a real estate scheme in which his sister purchased nearly $20 million worth of Bay Area properties with money wired from China. Read more>>

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