Property

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.

Jilted Intu flags more pain for UK landlords

29 Nov 2018

A group of investors led by the shopping centre operator’s deputy chairman abandoned a 3 bln pound takeover. It leaves Intu floundering with too much debt amid a bleak retail market. The fiasco suggests healthier peers may struggle to sell assets, and face further writedowns.

Persimmon flags need for force majeure pay clauses

7 Nov 2018

The UK housebuilder got in a mess because it couldn’t legally peg back departing CEO Jeff Fairburn’s ballooning incentive scheme. Remuneration committees need a way to block inflated pay to prevent hits to their reputations. Otherwise other groups will have theirs shredded.

Qatar’s flashy London deal hints at new direction

7 Nov 2018

The Gulf state’s wealth fund is buying posh London hotel Grosvenor House. Despite its neighbours’ blockade, Qatar has surplus cash to invest in trophy assets that offer good returns. Acquiring glitzy baubles suggests Qatar’s new fund managers will prioritise the former.

IWG’s safest option is to avoid short-term fix

6 Nov 2018

A strong third quarter has lifted shares in office provider IWG, a rival to WeWork. CEO Mark Dixon could provide an even bigger boost by selling Spaces, his company’s trendier offering. However, he would then be saddled with an old-school business with a valuation to match.

Breakdown: China’s stimulus 2.0 is a trickier trade

5 Nov 2018

Beijing is trying to warm a cooling economy with easier money, lower taxes and some $200 bln of infrastructure bonds. A bad debt hangover from the last building spree dilutes the impact of spending, however. This time around, there may be less for investors to get excited about.

Review: How banks helped cause the housing crisis

2 Nov 2018

Why are homes so unaffordable in big Western cities? Josh Ryan-Collins blames decades of excessive mortgage lending rather than paltry building rates or planning rules. That’s depressing for millennials: the logical fixes are a much harder sell than just building more houses.

China’s Mr Fix It banks have a property problem

1 Nov 2018

Beijing wants lenders to do everything. That means supporting infrastructure spending, propping up stocks and rescuing state zombies – all while cutting bad debt. It’s a tough juggling act. Now, though, there are worrying signs in property: if that ball drops, others may follow.

Moutai makes flammable fuel for China’s stimulus

26 Oct 2018

As companies bid for contracts tied to Beijing’s infrastructure surge, many may toast deals with a bottle of China’s best-known liquor. The $110 bln spirit maker offers a boozy play on government spending, but a sales surge could embarrass graft enforcers, prompting a crackdown.

UK landlord pain weakens M&A foundations

23 Oct 2018

The value of Intu's assets fell another 3 pct just as the mall operator tries to persuade bidders led by its own deputy chairman to up their offer. Investors seem sure neither side has a strong hand. A second failed deal would leave a heavily indebted Intu even more exposed.

Hong Kong’s political risk takes new form

9 Oct 2018

Leader Carrie Lam has made a good start tackling a housing crisis, and public sentiment is improving. With mass protests less likely, she may push for a controversial security law next. The business community appreciates stability, but eroding rule of law is a rising threat.

Beijing’s property crackdown looks half a bluff

9 Oct 2018

Policymakers are mulling an end to pre-sales that provide one third of developers’ funding, and pushing a nationwide housing tax. Both would sting, and investors look nervous. In the current climate, however, Beijing can’t afford to undermine its most important asset class.

UK landlord buyouts are far from a one-way bet

5 Oct 2018

Shareholders that own a third of Intu may take the 2 bln pound UK shopping centre group private. Even at a 30 pct premium, the consortium would be paying a huge discount to asset value. But Intu’s existing debt and a shaky outlook for rents mean buyers would be taking a big risk.

Hadas: Why houses are not like pigs

3 Oct 2018

Farmers respond to high pork prices, so the hog cycle keeps turning. It’s different for housing. An excess of money, not a shortage of buildings, usually turns prices upwards. And the cycle reverses when the money runs out, sometimes because lenders take fright at new supply.

Fed helps Hong Kong homebuyers at owners’ expense

28 Sep 2018

Banks are hiking their benchmark rates for the first time in 12 years. As tighter U.S. monetary policy feeds into Hong Kong mortgages, flat prices look set to fall, relieving young buyers. But cooling the world’s bubbliest property market could tax economic activity.