Once a step away from controlling China’s largest property developer, Baoneng Group’s Foresea Insurance is now on the brink of default, according to an account in the FT today. Also in the news, Blackstone warns of an end to a long property run, and property values in Hong Kong’s Central have already ratcheted up after Henderson Land’s record-breaking $3 billion land buy. Read on for all these stories and more.
One of China’s largest insurers has warned of mass defaults and social unrest unless the regulator lifts a ban on its issuance of new products, the latest sign of stress in the industry caused by a crackdown on financial risk.
In a letter to China’s insurance regulator seen by the Financial Times, Foresea Life Insurance warns that the company expects RMB 60 bil ($8.7bn) in redemptions this year and might be unable to meet payouts unless it is able to sell new products. Read more>>
Blackstone Group LP, the world’s biggest private equity fund, told investors to dial back their expectations for property returns as the “great run” of the past five years becomes harder to replicate.
Investors should “calibrate” their expectations,” Chris Heady, Asia Pacific chairman and head of Asian real estate, told a conference in Singapore on Tuesday. “They’re probably going to be lower over the next five years.” Read more>>
Henderson Land Development, owned by one of Hong Kong’s wealthiest families, may have done a favour to every land owner in the Murray Road neighbourhood in downtown Central, when it paid a record price for the largest commercial plot to go on market in two decades.
The record HK$23.28 billion (US$3 billion) price paid for the Murray Road land parcel, which topped professional valuers’ highest estimate by almost 6 per cent, would boost Cheung Kong Property Holdings’ net asset value per share by HK$5, according to an analysis by JPMorgan. Cheung Kong, owned by the city’s wealthiest businessman Li Ka-shing, owns Hutchison House, a 22-storey office tower across the Lambeth Walk from Murray Road. Read more>>
Developers have been paying substantial premiums for government land sites recently amid healthy private home sales. There has been aggressive bidding at public land tenders this year, with developers paying an average of 29 per cent more for residential plots over comparable sites sold in the past five years.
That was sharply higher than 13 per cent average premium in the second half of last year, a Cushman & Wakefield report noted yesterday. Read more>>
China’s largest property agents have quietly lowered their commission fees amid the worst property downturn since 2010 following unprecedented market cooling measures by government authorities.
In Beijing Homelink, China’s largest property agent, is offering rates below its 2.7 per cent commission fee in many cases. 5i5j, the second-largest agent, lowered its official rate from 2.1- 2.2 per cent to 1.9 per cent, according to interviews with individual agents and buyers in the city. Read more>>
Singapore real estate firm City Developments Limited (CDL) on Monday stepped up its sustainability efforts with a slew of bold new measures to reduce the company’s environmental impact.
CDL—already one of Singapore’s, and Asia’s, most well-recognised companies for its sustainability efforts—has upgraded an existing plan to reduce waste, water use and emissions, and use more recycled construction materials. Read more>>