Property

Real estate will defeat Beijing, again

21 Jul 2022

The campaign against property speculators was a good idea at a bad time. As with prior attempts, Chinese officials bit off more than the economy can chew. With buyers in open revolt and growth below 1%, capitulation is inevitable. The longer it takes, the more abject it will be.

New York City is losing its real estate swagger

14 Jul 2022

Global investors are eyeing alternative destinations, like Atlanta. Meanwhile high mortgage rates and market jitters are chilling Manhattan’s residential sales. The Big Apple relies on property for half of its taxes, and its economy is slowing to a crawl. A downturn could smart.

China’s property bottom leaves few standing tall

30 Jun 2022

Vanke, the second-largest developer by sales, reckons parts of the housing market are recovering. Rivals with weaker credit ratings are struggling with debt repayments and face a wall of maturities. A rebound requires access to borrowing markets where investors remain sceptical.

Barclays adds risky spice to insipid valuation

24 Jun 2022

The UK bank is scooping up specialist lender Kensington for nearly $3 bln. It’s small, and CEO C. S. Venkatakrishnan is right to try to gee up his low-valued shares with retail assets. Still, he’s also bulking up in the riskier end of the market amid a potential house price dip.

Chinese property crisis drives derivative rethink

7 Jun 2022

Beijing has helped some private developers with bond issues by letting them offer protection via tools like credit risk mitigation warrants. So far it’s symbolic and over-reliant on reluctant state banks. If private money can be wooed, however, the market could finally take off.

ESG raider needs to dig deeper

31 May 2022

Jeff Ubben’s Inclusive Capital has made a $1.9 bln offer for UK homebuilder Countryside. It’s both a bet on the need for more affordable housing, and an opportunistic raid on a target tainted by governance woes. But the ValueAct founder’s lowball bid needs a little sprucing up.

Seizing oligarch assets is a slippery slope

26 May 2022

The EU hopes to confiscate $31 bln of yachts and villas from blacklisted billionaires. Washington is mulling similar steps. However wrong Russia’s invasion of Ukraine may be, short-circuiting the criminal process to seize property risks weakening trust in Western rule of law.

China’s real estate renovation is too cosmetic

26 May 2022

The central bank joined wider efforts to help the property sector by cutting five-year lending rates to 4.45%. Banks remain sceptical of developers however, and bonds are trading at distressed prices. Lack of faith in the industry’s foundations make it harder to build a recovery.

Capital Calls: Turkey, Nintendo/Sony, India IPO

10 May 2022

Concise views on global finance: President Erdogan makes another ham-fisted monetary intervention; the Switch maker weathers supply chain ructions better than its larger rival; New Delhi needs to be even more generous in its landmark listing of Life Insurance Corp of India.

Property tie-up puts London landlords in charge

9 May 2022

Capco, owner of retail hub Covent Garden, is planning a 3.6 bln pound merger with West End neighbour Shaftesbury. Capco’s 25% stake in its larger rival helps explain the absence of a premium. If regulators approve, the main benefit will be greater bargaining power with tenants.

Adler gifts German watchdog a shot at redemption

4 May 2022

BaFin’s probe into the property group has gained added weight after KPMG’s refusal to approve its 2021 accounts. The mess is an important test for new boss Mark Branson after the regulator’s Wirecard failings. Adler’s patchy disclosure and shaky governance make it an easy target.

Decamping auditors slam door on Chinese developers

28 Mar 2022

Shimao and Powerlong are the latest to lose PwC as the verifier of their books. It’s a little late for international examiners to be taking a stand, but mass switching to local firms will intensify scrutiny of the industry. The offshore borrowing market also should all but close.

The Covid effect: Sheds, Hong Kong, Conferences

24 Mar 2022

The pandemic continues to shape business and policy around the world. In this Viewsroom podcast, Breakingviews columnists debate a possible 21 bln euro bid for city-centre warehouses, the relaxing of restrictions in Hong Kong, and a recent conflab of M&A advisers in New Orleans.

New Evergrande crisis may cue tougher intervention

24 Mar 2022

The property developer was largely left alone to fix its financial mess. The discovery of misused funds at a subsidiary heightens the risk offshore investors head to the courts. That makes it more likely China steps in. Its handling of defunct conglomerate HNA could be a guide.

Prologis has to go extra mile for Blackstone sheds

22 Mar 2022

The property giant offered over $23 bln for Mileway, which owns European warehouses. Sky-high valuations and frenetic M&A imply it’s a good time for Steve Schwarzman’s group to cash out. But limited city space and booming online deliveries mean asset values can keep rising.

China’s property rebound is unstable

22 Mar 2022

Homebuilder stocks have resurged on Beijing’s promises to stabilise the sector and the shelving of a real estate tax. House prices in some top cities are recovering. But the bond market is uneasy and defaults continue. Absent more policy support, investor relief is premature.

Capital Calls: Tencent, Ted Baker

18 Mar 2022

Concise views on global finance: The Chinese web giant may have to separate its mobile payments business from its popular social media arm; U.S. buyout fund Sycamore can afford to be generous towards the hard-pressed UK fashion group’s shareholders.

EU housing boom risk is more social than financial

11 Mar 2022

Watchdogs in Germany and elsewhere have hiked bank capital requirements and warned property may be 30% overvalued. Yet mortgage-lending standards remain solid, suggesting pandemic savings are mainly to blame for the runup. There’s little regulators can do about wealth inequality.

UAE could be Russian oligarchs’ next playground

4 Mar 2022

Amid U.S. and European asset freezes, Moscow’s billionaires need new bases. The United Arab Emirates has international schools, a Western feel and, in Dubai, a relaxed approach to sanctioned parties. Most of all, it’s currently taking a different stance over Ukraine to the West.

Capital Calls: Theme park M&A, Energy IPO

16 Feb 2022

Concise views on global finance: Cedar Fair rebuffed a takeover offer from rival amusement park operator SeaWorld, but other buyers may be reluctant to join the ride; The $8 bln Vaar Energi, majority owned by Italy’s Eni, sees its shares dip on their first day of trading.