Property

Wanda tycoon pays price for overexpansion

13 Dec 2023

Once Asia’s richest man, Wang Jianlin has been forced to give up control of his mall operator to avert a $4.1 bln funding crunch. To avoid further problems at China’s biggest landlord, Dalian Wanda now needs to prove its assets are attractive to both shoppers and investors.

Muddy Waters sticks a pin in Blackstone’s rump

8 Dec 2023

The short-seller says a mortgage fund run by Steve Schwarzman’s firm is doomed by struggling office properties. The reality may be more nuanced. But Muddy Waters is challenging a fundamental Blackstone selling-point: its ability to outrun the market, in real estate or elsewhere.

Capital Calls: Monte dei Paschi

21 Nov 2023

Concise views on global finance: The Italian Treasury raised 920 mln euros by selling a 25% stake in the bank on the open market. So far, it looks like a better outcome for taxpayers than submitting to the onerous sale conditions offered by UniCredit in 2021.

Private equity superstores overstock the shelves

8 Nov 2023

Blackstone and Apollo say diversification into credit, real estate and beyond makes them better investors. They have been outraised and often outperformed, however, by more focused buyout shops like CD&R. It will take consistently higher returns to justify the conglomerate model.

Canary Wharf may yet avoid once-a-decade upheaval

6 Nov 2023

The main landlord of London’s key office district has tended to have a new owner every 10 years. The 300 mln pounds of equity injected by incumbents Brookfield and Qatar suggests they may buck the trend. That gives Canary Wharf scope to address its issues in a stable manner.

Hong Kong property stares into the abyss

24 Oct 2023

Secondary sales prices in the world’s least affordable housing market fell 19% since a 2021 peak, the biggest slump since the global financial crisis. High interest rates are a pain and slashing stamp duties may not help. The city’s image problem will keep hurting sentiment.

Country Garden default will serve a bigger purpose

17 Oct 2023

China’s top property developer may miss a debt payment. Creditors have an incentive to quickly agree on a restructuring for its $11 bln of offshore bonds after rival Evergrande’s process flopped. Beijing needs to show the highly leveraged sector can get onto a healthier path.

Hong Kong buyout leaves property woes clear as mud

10 Oct 2023

Haitong Securities offered a 114% premium for shares it doesn’t already own in its ailing subsidiary. At some 60% of book value, that could have set a benchmark for other brokerages laid low by their China real estate holdings. The lack of transparency on assets prevents that.

China has reason not to let Evergrande rejig rot

3 Oct 2023

Its chairman is suspected of crimes. Offshore creditors may hope a proposal to restructure their $19 bln holdings is still on the table. A forced liquidation will see them recover as little as 2%. Their fate will offer a clue to whether Beijing still values overseas debt markets.

Evergrande is weak link in China’s property fix

25 Sep 2023

The developer’s debt rejig has fallen before the first hurdle. It can’t issue new notes because of an investigation. For all Sunac and Country Garden’s good news, Evergrande accounts for half of the trio’s $670 bln liabilities. Its struggles will hold back the entire market.

China’s property price caps have two sharp edges

18 Sep 2023

Price caps were introduced in 2016 to contain runaway home prices. Ditching them now will allow indebted developers to sell down their bloated inventory and help the market find a bottom. Officials are flirting with the idea, but Beijing will need to brave the social fallout.

China’s cautious property giants may be rewarded

8 Sep 2023

Vanke Chair Yu Liang presciently called the top of the market. Now he says it has oversold and will return to a healthier level. Some optimism is warranted. Policies aimed at shoring up home sales are stirring a rebound in stocks. Yu can afford to be more positive than most, too.

Builders have shelter against UK house-price storm

1 Sep 2023

Property values are falling as demand dwindles, but the likes of Persimmon trade on decent multiples. A squeezed rental market and peaking rates mean the pain may not last long. For now, homebuilders have strong balance sheets and can generate cash by depleting their land banks.

With housing, Buffett chooses a great location

30 Aug 2023

The billionaire’s Berkshire Hathaway recently backed US homebuilders such as Lennar even as mortgage rates rose. Although Americans will pay more in interest, higher wages can make up the difference. Plus, existing home sales have ground to a halt. Builders are in prime position.

Leaving the office for dead may haunt investors

23 Aug 2023

Landlords’ valuations are half pre-pandemic levels due to the boom in hybrid work. Yet looser labour markets are giving bosses more power and companies like Google want staff to spend more time in their buildings. Fund managers betting on a trend reversal may be on to a winner.

Central bank peanuts highlight China’s policy gaps

15 Aug 2023

A surprise rate cut failed to soothe markets rattled by a weak economy and property defaults. The People’s Bank of China is limited by thin bank margins and the risk of outflows. Loose monetary policy won’t help demand, if President Xi Jinping keeps ducking bolder fiscal action.

Chinese homebuilders see no light at end of tunnel

9 Aug 2023

The property crisis is claiming one of the few big developers left standing. Country Garden might dodge a default but slowing sales make honouring $200 bln of liabilities and building 1 mln apartments hard. Beijing is pushing firms to the brink, and they have reason to push back.

China’s stimulus tone hits a high pitch

25 Jul 2023

Party leaders are finally admitting they need to do more to support the $18 trln economy and its real estate market. Some fiscal tweaks and measures to speed home sales in big cities may follow. But in raising expectations, what Beijing considers a new normal remains a mystery.

China’s property market is finding a new normal

25 Jul 2023

Slower growth is not necessarily bad. In this Exchange podcast, Cara Li, Head of Asia Pacific Real Estate Investment Banking at Morgan Stanley, says the debt-fuelled engine of the world’s second largest economy is maturing and outlines the benefits of a period of consolidation.

How to breathe life into zombie office property

18 Jul 2023

Lenders are steering clear of buildings that face reckonings from remote working, pushing prices down. In this Exchange podcast, real estate investor Scott Rechler argues that it will take financial and civic engagement to make empty space desirable for living – and investing.