Property

Shared-office burn

10 Sep 2019

If WeWork goes public, its valuation could be less than half the headline $47 billion at its last funding round. But if it doesn't, it could run out of cash by 2023. A Breakingviews calculator shows how the numbers stack up.

Cash incinerator WeWork could stall without an IPO

10 Sep 2019

Backer SoftBank wants the company to scrap a cut-price listing, the FT says. Yet the office sublessor may burn $15 bln by 2023, even if cash outflows reverse to match profitable peer IWG, a Breakingviews calculator suggests. Without IPO proceeds, WeWork may not last that long.

Vision Fund gets handed ill-timed reality check

6 Sep 2019

SoftBank’s $100 bln fund has made strong paper returns. But now WeWork may float at under half its private valuation, Uber is 28% below its IPO price, and Slack has dropped 22% since a direct listing. It’s a bad time for CEO Masayoshi Son to pass the cap for the $108 bln sequel.

China’s real estate cold turkey risks withdrawal

3 Sep 2019

The economy is cooling and the trade war is worsening, yet Beijing refuses to juice housing markets. Stimulus without touching a sector that feeds about 15% of GDP is hard. That officials are trying suggests they are willing to bear a lot of pain to hold home prices down.

Washington could set the pace for Chinese property

27 Jun 2019

Home prices are notching up annual increases of nearly 11%, in spite of restrictions and a cooling economy. Real estate, which drives as much as a fifth of GDP, is one of Beijing’s most powerful levers to crank up growth. The trade war will determine how forcefully it is used.

Philip Green escape is bad omen for UK high street

13 Jun 2019

The British retail baron saved his empire by pushing through an aggressive restructuring. Landlords agreed to cut rents by up to half, despite the risk that other tenants will demand similar discounts. The deal shows the fragility of UK retailers – and the property they occupy.

UK contractor crisis leaves lasting scars

28 May 2019

Galliford Try rebuffed Bovis’ $1.3 bln bid for its housebuilding unit. The offer left behind a challenged construction business, that could struggle to access capital. After the collapse of Carillion, investor aversion will force public contractors to shrink, or merge.

IWG divides to conquer WeWork discount

15 Apr 2019

The office space group is selling its Japan business for 320 mln pounds. Retreating from one of its most profitable markets makes sense given the local heft of SoftBank, which is backing its $47 bln rival. A plan to offload other regions will reveal value hidden under the desk.

UK subprime M&A party closed to gatecrashers

12 Apr 2019

Provident Financial shares are trading more than 10 pct above smaller rival Non-Standard Finance’s 1.2 bln pound offer. One theory is that investors are hoping for a higher bid. But given over 50 pct have already accepted the offer, a white knight has probably left it too late.

Dublin’s office boom lacks residential support

5 Apr 2019

Commercial construction in Ireland is back at pre-crisis levels. Tech giants and banks seeking a post-Brexit perch are fuelling demand for office space. But with Ireland building fewer than 20,000 homes a year – half what is needed – workers will struggle for affordable housing.

China property giants face call of tech sirens

27 Mar 2019

The $45 bln Evergrande and peers reported bumper earnings for last year despite slowing overall sales. Home prices are rising, debt is stabilising and policy seems friendlier. Shareholders could relax, were developers not also plowing into electric cars and robots.

China’s housing unicorns are financial engineers

8 Mar 2019

A fundraising values flat-leasing startup Danke at $2 bln. Like rivals, it raises cash for expansion by taking out loans in tenants' names, rather than charge monthly rents. Owners, renters and banks are exposed if Danke flops. The practice is likely to overstay its welcome.

Only next crash will test HK bank chief’s legacy

22 Feb 2019

Norman Chan, head of the Hong Kong Monetary Authority, plans to retire. Supervision was a bigger focus than traditional monetary policy during his decade in office, using controls such as mortgage curbs to limit a housing boom. Only a downturn will determine whether that worked.

London’s after-Brexit party will be dreary affair

11 Feb 2019

Property prices in the capital have stuttered since the 2016 referendum. If Prime Minister Theresa May can avoid a chaotic exit, investment may pick up. Yet a rising pound will discourage some foreign punters. And political and economic uncertainty will linger.

Ken Griffin gives London property a partial boost

21 Jan 2019

The hedge fund billionaire has bought a 95 mln pound pad in the UK capital, according to the FT. In a market hit by pre-Brexit jitters, that’s a vote of confidence of sorts. Yet Griffin’s 34 pct discount – over twice the average for similar dwellings – limits the good vibes.

UK builders’ Brexit bargepole is getting shorter

16 Jan 2019

Double-digit dividend yields imply Bovis, Taylor Wimpey and Persimmon’s shareholder payouts are too high. But recent updates cite a healthy new home market. With strong balance sheets and a disastrous Brexit looking less likely, investor distaste is starting to look overdone.

Airbnb will succeed where U.S. peers failed: China

4 Jan 2019

Unlike Google or Facebook, the home-sharing app’s model dovetails with Beijing’s view that property be used for living, not speculating; and its rating system helps with social credit scoring. Domestic rivalry will be fierce, but Airbnb’s global network gives it one advantage.

Investors will swap City offices for Euro sheds

27 Dec 2018

Yields on shiny London real estate are on the floor, and Brexit could affect sky-high capital values. Luckily, those looking to invest in property in 2019 have a Plan B. European warehouses are both cheap and likely to gain from an ongoing surge of online commerce.

Hong Kong tycoon tunneling out of public markets

7 Dec 2018

Gordon Wu, whose mega-bridge idea was just built, has offered to take his property company private 40 years after its IPO. A $2.7 bln bid puts a big premium on Hopewell’s share price, but still discounts underlying assets. Peers similarly frustrated by valuations may follow suit.

Clash of activists could become feature in Japan

6 Dec 2018

Pushy U.S. hedge fund Elliott voted in favor of $5 bln Alps buying the rest of car navigation systems maker Alpine. Feisty Oasis had long been fighting to block the deal. Such rifts are rare, but may rise in a country where consolidation of affiliates is a growing battleground.