Property

China rival offers WeWork half an office blueprint

22 Oct 2019

Like Adam Neumann's company, over-expansion at Beijing-based Kr Space caused a cash crunch. It turned itself into an office manager, reducing exposure to falling occupancy rates. A similar pivot to services can’t salvage WeWork's $47 bln valuation, but it may stem losses.

Hong Kong’s miseries enter self-perpetuating cycle

14 Oct 2019

Unhappy factors like property prices, living costs, and bankruptcies are pushing a Breakingviews index to historic highs. Demonstrators’ demands are political, not financial. But mounting economic stress on ordinary people sabotages government attempts to call a truce.

Hong Kong’s politics could knock down developers

27 Sep 2019

In a sign that protests have hit real estate, officials rejected offers for a plot at the former airport as too low. Things could get worse with perception growing in Beijing that property titans are partly to blame for the unrest. It heralds policy changes that crimp earnings.

Indian office towers rise above economic slump

25 Sep 2019

A Blackstone-backed $4 bln real estate investment trust has thrived since going public in April, outpacing local blue-chips and defying a broader slowdown. Developer debt woes and creative startups will open the doors wider to this hard-to-access and higher-yielding market.

Jardine maps a road to younger Asia for its peers

20 Sep 2019

The $41-bln conglomerate turned to the southeast when it moved out of Hong Kong ahead of 1997. It thrived, betting on cars in Indonesia and milk in Vietnam. Those economies have cooled of late but long-term prospects, plus uncertainty up north, will encourage more to follow.

WeWork value shrinks even further without an IPO

17 Sep 2019

CEO Adam Neumann postponed a float, which may have pegged his office-sharing startup’s worth at $10 bln compared with a $47 bln private price tag. Yet without an IPO, parent The We Company’s growth may stall. If so, WeWork’s true value could be half even its mooted listing price.

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.