Property

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.

Wembley bid is open goal for Britain’s soccer body

27 Sep 2018

Jacksonville Jaguars owner Shahid Khan has offered a staggering 600 mln pounds for the UK’s national stadium. Given that the Pakistani-American is leaving behind the lucrative hospitality arm and naming rights, the Football Association should put the deal in the back of the net.

Drug watchdog’s Brexit spat is bad omen for London

25 Sep 2018

The European Medicines Agency is embroiled in a legal fight to scrap a lease on its UK headquarters. Its argument, that Brexit was an unforeseeable event, looks weak. But even if the regulator loses the case, its actions offer a grim prognosis for London office property.

Santander’s contrarian property punt looks savvy

20 Sep 2018

The bank run by Ana Botin may pay 3 bln euros to buy back its 618-acre Madrid headquarters, which it sold a decade ago. Other banks like Goldman Sachs and Lloyds are selling their property. Yet with interest rates low and Spanish property booming, the bet could pay off.

UK chips away at post-Brexit housebuilding crisis

12 Sep 2018

The government and Barclays will lend 1 bln pounds to cash-starved small developers. It’s a neat way to help reduce Britain’s reliance on a few large builders. Yet a skills shortage as the country leaves the EU and arcane planning rules mean it’ll be a drop in the cement bucket.

Goldman Sachs slaps sell sign on London property

24 Aug 2018

Like HSBC a decade ago, the U.S. bank has sold its UK headquarters for just over 1 bln pounds. As in 2007, Goldman is doing so as rental yields hover at the toppy level of 4 pct. And while a two-decade lease appears to be a vote of confidence, it can sublet if Brexit bites.

More AWOL China bosses flag unique key-man risks

24 Aug 2018

Casino operator Landing has lost half its market value amid news that its chairman is unreachable. It’s the second such case in three days. Overdependence on top executives continues to plague many Chinese companies, and they’re exposed to hazards uncommon in other markets.