Real Estate

CKI’s $10 bln bid can snare Australian prey

13 Jun 2018

The Hong Kong giant is circling Australia's top gas pipeline firm. A 33 pct premium ought to satisfy APA’s board, especially as tougher rules bite. The odds are good for Victor Li’s first big deal since he took over from father Li Ka-shing at parent company CK Hutchison.

USG pokes hole in U.S.-Europe trade drywall

11 Jun 2018

The building products outfit agreed to a $6.1 bln takeover by German rival Knauf. It did well to get a 5 pct top-up given 31 pct owner Warren Buffett was already on board. In the wake of a rancorous G7 it shows companies can still transact when politicians keep out of the way.

Blackstone relives Hilton on a boutique scale

21 May 2018

The buyout firm offered $3.7 bln for hotel operator LaSalle, wading into a bidding war just after it sold its remaining stake in Hilton. That earlier deal took more than a decade to close out. With riskier properties and a higher valuation, this new foray will be tougher.

Hadas: WeWork blather is call to rework accounting

16 May 2018

The office-rental outfit’s “community-adjusted EBITDA” is ridiculous, but it gets at a real problem: valuing fast-growing firms. Standard measures would benefit investors more than company-defined ones. Accountants can help – once they learn to deal with the post-factory economy.

Tangled loyalties complicate China Tower IPO

15 May 2018

The mobile mast company has filed for a Hong Kong debut that could raise $10 bln. China’s big three telecoms operators are both key clients and shareholders. New investors need to be convinced the trio won’t squeeze China Tower too hard as they try to keep their own costs down.

IWG suitors could use some WeWork magic

14 May 2018

The original shared-office provider has been approached by three private equity bidders. Though the shares are up 30 pct, its $3.8 bln market value is just over its 2017 revenue. Trendy upstart WeWork is valued at 20 times. Buyers will be hoping some of the sparkle will rub off.

California helps Paris send solar message

11 May 2018

The most populous U.S. state is making panels mandatory on most homes built after 2020. It will cut emissions only a little. But the clean-energy focus will push other states along. Fossil-fuel producers will have fewer excuses to ignore the renewable writing on the wall, too.

Higher rates are likely to calm Hong Kong property

8 May 2018

Interbank lending is getting pricier after a decade-long slump, as authorities defend the Hong Kong dollar. That implies costlier mortgages and slower growth in a frothy real estate market. This will be manageable for banks and developers, and welcome for renters and retailers.

Blackstone stores up value in warehouse deal

7 May 2018

The buyout firm is paying $7.6 bln to buy Gramercy Properties. The dearth of other industrial real-estate companies and rising demand for space, fueled by the likes of Amazon, make it tempting to overpay. Blackstone is keeping a lid on overexuberance, even considering the risks.

UK raises global bar in tax secrecy fight

2 May 2018

Britain will force overseas territories like the Cayman Islands to reveal the owners of anonymous companies. Those looking to avoid tax and scrutiny can move their business, but the UK's action will throw the spotlight on other shelters like the United States and Hong Kong.

Marriott Vacations makes pricey time-share buy

30 Apr 2018

The operator of fractional vacation homes is paying $4.7 bln for rival ILG. It helps close the gap with market leader Wyndham. But cost savings cover barely half the premium and debt may exceed four times EBITDA. It underscores the high cost of time-share ownership.

WeWork junk-bond investors enable a contradiction

26 Apr 2018

The trendy shared-office outfit is the latest firm with heady prospects and huge cash burn to tap credit markets. Like Uber, Tesla and Netflix, WeWork needs funds for expansion to justify its valuation. Yet the healthy cash flow creditors prefer may only come with slower growth.

Hammerson’s M&A fumble leaves defences down

18 Apr 2018

The shopping centre operator ditched a 3.4 bln pound plan to buy rival Intu after shareholder pressure. The group will now sell assets and focus on posh malls, but the U-turn makes it vulnerable. The UK’s strict takeover rules give rejected suitor Klepierre a narrow way back.

Hammerson has walked away from wrong deal

13 Apr 2018

The mall operator’s aversion to Klepierre’s 5 billion pound offer has driven away the suitor. The UK company is now free to pursue the takeover of a smaller rival in its home market. But the drawbacks of the plan and its clumsy defence risk irking investors.

Leaving Intu at till is first step for Hammerson

5 Apr 2018

The UK shopping centre owner is waiting to see whether rival Klépierre makes a formal bid before it commits to buying smaller Intu Properties. Shareholders have already turned down their thumbs at the Intu deal. A sweeter offer from the French group would be a better outcome.

Private equity’s retail fix risks landlord revolt

5 Apr 2018

Ailing UK food and fashion chains like private equity-owned New Look or Prezzo increasingly use fast-track insolvency tools to scotch costly leases. The fad gives companies a shot at recovery, while avoiding a risky administration. But property groups may tire of taking the pain.

Brookfield’s GGP offer shows writing on the mall

27 Mar 2018

The real-estate owner raised the headline value of its offer for the U.S. shopping-center operator to $15.3 bln. Yet the fall in Brookfield’s shares since it first made a bid makes the new offer look worse. Split the difference, and Brookfield is probably being rational.

Facebook leads Silicon Valley to its Minsky moment

21 Mar 2018

The social network feasted on burgeoning data and devices, just as banks gorged on easy money before the crisis. Society’s focus on benefits over risk gave tech companies free rein – until the resulting abuses couldn’t be overlooked. As user trust evaporates, regulation beckons.

HNA is enjoying a pleasant stay at Hilton

7 Mar 2018

The cash-strapped Chinese group bet $6.5 bln on the U.S. hotelier, using lots of borrowed money. It has now sold stock in the spun-off Park Hotels for $1.4 bln, while retaining another $7.6 bln stake. HNA has been a crazily prolific investor, but this trip was worth it.

Chinese vacancy casts shadow on Hong Kong property

28 Feb 2018

An obscure mainland group buying a $5 bln skyscraper from Li Ka-shing has pulled out. Locals are due to take its place. Similarly, HNA recently flipped land to a Hong Kong developer. If the southbound rush into commercial property abates, the market could regain a little sanity.