Property

China is fixing housing market with a long gaze

29 Aug 2024

Only 4% of a $42 bln lending scheme to help mop up excess inventory has been drawn upon since May. Other new policy shifts, such as ditching housing presales, could extend the property slump. Beijing is determined to remodel the sector, even if it requires more time and pain.

China’s PwC slap may yet pack a punch

22 Aug 2024

The auditor may get a record fine and a six-month ban for its role in the Evergrande scandal, per the FT. It'll sting, but won't kill the business. Yet hobbling a big foreign player can speed up Beijing's push to have domestic accounting firms take on a more prominent role.

Sapporo might get half-drunk on efficiency

18 Jul 2024

After the $3 bln beer maker agreed to rejig its property holdings, activist 3D has detailed exactly how the company should go about it. Japan Inc is warming up to the idea of realising gains on real estate. But there's plenty of room for missteps, even in a seller's market.

Latest UK builder M&A may yet have completion date

14 Jun 2024

Crest Nicholson rejected bigger rival Bellway’s $828 mln all-share offer. While Crest’s new profit warning is a turnoff, falling returns mean housebuilder mergers generally make sense. Bellway may not need to offer much more to convince its target’s shareholders.

UK building plans will fail to get off the ground

6 Jun 2024

Rivals in the July 4 election promise 300,000 new houses a year to ease shortages and lower prices. A lack of builders makes that unlikely. More than 346,000 construction jobs have disappeared since 2019. Without immigration or training, Britain will remain cramped and expensive.

ESR buyout showcases depths of Hong Kong misery

27 May 2024

The $6 bln Asian real estate fund manager is mulling a take-private bid. While its complex business has been hit by high interest rates, a 60% fall from the stock's 2021 peak looks harsh amid a promising turnaround. Shareholders like OMERS can push for a high premium.

China goes on a $1 trln apartment-buying spree

16 May 2024

State-owned firms and local authorities will answer Beijing's call to purchase up to 3.6 bln square feet of unsold homes. The bold move will ease the property crisis, which has weighed on growth. But this will weaken already strained government and corporate balance sheets.

China property fix aims to restock speculation

6 May 2024

Reducing unsold inventory is Beijing’s latest directive and replaces the mantra “houses are for living in, not for speculation”. It’s a prelude to removing some investment curbs. Allowing people to get rich off the sector is a necessary evil to restore overall confidence.

Hurricanes threaten to stir perfect economic storm

1 May 2024

Warmer oceans portend an unusually fierce 2024 season in the Atlantic, with two states already propping up their home insurance systems. The nightmare scenario is $200 bln of losses. Insolvencies would be a problem, but not as big as exorbitant premiums and lower property values.

Lower rates, office return will ease property pain

7 Mar 2024

The post-pandemic boom in hybrid work is causing trouble for banks that have lent heavily to office developers. But in this Viewsroom podcast, Breakingviews columnists explain how losses may be limited if central banks bring borrowing costs down and bosses call employees back.

European bank property buffers rest on two big ifs

28 Feb 2024

Lenders like BNP and ING sit on $1.5 trln of commercial property loans, which look vulnerable to high interest rates. Longer leases give EU players more breathing space than US counterparts. Yet averting a crisis requires a mixture of falling inflation and a revival of offices.

Capital Calls: S&P/Visible Alpha

20 Feb 2024

Concise views on global finance: The financial analytics firm’s $500 mln bid for alternative data provider underscores the importance of bringing proprietary data to funds that trade on momentum. But as Lyft’s rally after a typo showed, automation has its limits.

US real estate is a micro-drama set to turn macro

15 Feb 2024

So far, loans on isolated buildings by individual banks and funds have gone bad. As mortgages worth $1.5 trln come due in the next two years, strains will also spread from offices to apartment blocks. A correction is inevitable, but its impact can still be contained.

Capital Calls: Disney

7 Feb 2024

Concise views on global finance: Boss Bob Iger nabbed Taylor Swift’s movie for his company’s streaming service, took a $1.5 bln stake in Epic Games and shipped more money to shareholders. But traditional TV is declining, and a new sports partnership makes for an awkward fit.

Julius Baer pops myth of private bank prudence

1 Feb 2024

CEO Philipp Rickenbacher is leaving the $12 bln Swiss wealth manager after bad lending led to a $700 mln writedown. It’s a reminder that serving rich clients is not risk-free. Money managers will have to provide more clarity on loan books or give up lucrative but dicey practices.

BoE can counter banks’ unfriendly rate fire

12 Jan 2024

UK lenders like HSBC think lower borrowing costs are coming and have slashed five-year mortgage payments below 4%. That makes it harder for the Bank of England to slay inflation and, in fact, may delay any cuts. Governor Andrew Bailey could ask the City to reward savers as well.

Capital Calls: UK real estate merger

11 Jan 2024

Concise views on global finance: LondonMetric’s all-share move for domestic peer LXi isn’t a bargain, but creates a 4 bln pound landlord with benefits for both sides.

Capital Calls: UK homebuilders

10 Jan 2024

Concise views on global finance: Expectations of mortgage rate cuts helped Persimmon exceed sales targets, giving another lift to its resurgent stock price. The optimism, however, warrants a reality check.

Beijing will build safety net around housing hole

18 Dec 2023

China’s debt-stricken developers have left 20 mln homes unfinished. Local governments can turn the crisis into an opportunity by taking on stalled projects and converting them into public housing. State firms will increase their presence in the property market in the process.

Hong Kong’s property pain may soon get real

13 Dec 2023

The city’s leader John Lee is talking tough on illegal structures, a hot topic in the world’s most unaffordable housing market. Tackling the issue will frustrate the rich and may hit government revenues but it would please Beijing and the public. The necessity to act is growing.