Real Estate

Bovis Homes is a challenging fixer-upper

5 Apr 2017

The UK builder rejected a proposed merger with Galliford Try and instead hired the bidder’s former CEO to fix the business. Bovis has visibly lower returns and profitability than rivals. It’s not, though, a good time for the kind of cost cuts and land selloff that may be needed.

Britain sells mortgages, buys small Brexit hedge

31 Mar 2017

Selling 11.8 billion pounds of former Bradford & Bingley mortgages to Blackstone and Prudential will cut the UK’s national debt without leaving a loss. The buyers are showing confidence in the UK economy. The seller is shoring itself up in case such confidence proves misplaced.

Bovis Homes suitors have good reasons to pitch low

13 Mar 2017

The UK homebuilder has attracted interest from two peers. The rival premiums of 5 pct and 7 pct appear underwhelming. But a takeover would be a quick fix for investors’ worries about management and building standards, and there are few justifications for a much sweeter offer.

Foxtons shines light on London’s squeezed middle

8 Mar 2017

The London-centric estate agent is a good guide to the capital’s property market since the vote to leave the EU. Things look toughest in the affluent middle, and city centre. With its shares below their IPO price, Foxtons is suffering for hitching its wagon to the metropolis.

Australia stares down its troublesome twins

8 Mar 2017

The central bank is on hold. But present inaction brushes off future uncertainty. Stubbornly low inflation argues for even lower interest rates, while a bubbly housing market cries out for tighter policy. At least rising U.S. rates should put helpful downward pressure on the currency.

Masayoshi Son could make easy work of $100 bln job

27 Feb 2017

His SoftBank may plunk $4 bln into office-space upstart WeWork. Son blanched at two earlier opportunities to invest at valuations lower than the $20 bln now on offer. One big difference is the Vision mega-fund. Perspectives can change when other people's money gets in the mix.

Golden Globes flop could tarnish Chinese bidders

21 Feb 2017

Officials torpedoed Dalian Wanda's $1 bln bid for Golden Globes producer Dick Clark, a Hollywood website says. Reining in Wang Jianlin may be diplomatically astute and economically prudent, but if China's richest man can't get deals done, it's a bad sign for other Chinese buyers.

Small-town Laishui is Chinese bubble in a bubble

20 Feb 2017

New apartments in a poor county near Beijing can now cost the average local 15 years' income. There are real reasons places like Laishui might attract development. But amid attempts to cool prices in top cities, smaller towns may be turning into targets for speculators.

UK housing policy may be answering wrong question

7 Feb 2017

The British government has some ideas to build 250,000 homes every year. But as real rents in England are below 2005 levels and the stock of surplus housing is higher, shortage of supply may not be the biggest issue. Managing rents, not house prices, should be the focus.

Blackstone prices its housing fixer-upper to move

23 Jan 2017

The biggest portfolio of U.S. single-family rental homes should tempt investors. The buyout giant is pitching the $1.5 bln IPO of Invitation Homes in line with rivals despite superior fundamentals. The cautious approach is sensible given the headwinds facing the housing business.

Li Ka-shing Duet bid tests Aussie foreign dislike

16 Jan 2017

The Aussie energy firm's board is backing the tycoon's $5.5 bln takeover bid. Duet's stock is trading close to the offer. That suggests investors think the deal will pass and that Canberra's recent chest-thumping against foreign buyers like CKI on security grounds is nuanced.

LeEco’s $2 bln rescue rewards bad habits

16 Jan 2017

Property developer Sunac is ploughing funds worth more than half its market value into the overstretched TVs-to-electric cars group led by billionaire Jia Yueting. The partnership makes Jia's earlier pledge to slow down sound unconvincing, and could lead Sunac astray too.

China Resources seals neat exit from builder brawl

13 Jan 2017

The $5.4 bln sale of its entire stake in China Vanke to Shenzhen Metro allows the conglomerate to extract itself from a boardroom fight at an attractive price. It looks like the beginning of the end for a spat that has irked regulators. Other shareholders may follow its lead.

Evergrande’s M&A misadventure is costly

22 Dec 2016

The Chinese property developer has spent $5.2 bln building a 14 pct stake in larger rival Vanke. With the regulator cracking down on capital market "savages" and Evergrande itself ruling out a takeover, the bet is already 13 pct underwater. It can hardly afford the misstep.

Market sceptics are alive and well in Hong Kong

19 Dec 2016

GMT Research claims Evergrande needs $22 bln of writedowns. That is bold, given the hard time local authorities and companies give sceptical analysts - including the developer's previous critics. This and recent short attacks are signs of resilience from the contrarian camp.

Fintech’s transformation into banking draws closer

9 Dec 2016

UK regulators are mulling tougher rules for crowdfunding firms that would require greater risk disclosure and wind-down plans. Stricter regulation is good for investors. Yet it also means more loan-based platforms might follow peer-to-peer group Zopa in seeking a banking licence.

U.S. housing revival remains under construction

1 Dec 2016

Home prices just surpassed their 2006 peak, boosted by more buyers amid tight supply. Further gains could be tough – or slow. Rising interest rates and privatizing the government agencies that back mortgages, as Trump's Treasury nominee wants to do, could impede affordability.

Overdue market renovations bite UK estate agents

24 Nov 2016

Letting agents’ share prices plunged as the government said it might stop tenants from being billed directly for admin fees. Agents don’t have much chance of passing those costs on to landlords. Even if the government is micromanaging, the effect will be a more efficient market.

Chinese insurer’s board battle could backfire

23 Nov 2016

The mass resignation of CSG's management team after a hostile takeover by activist conglomerate Baoneng Group puts the profitable firm's fate in limbo. If Baoneng wants to prove itself as a strategic investor, it should look before leaping into boardroom battles.

U.S. election resurrects Fannie, Freddie fiasco

22 Nov 2016

Shares of the two bailed-out mortgage agencies have rocketed on hopes the Trump administration might end government oversight. Big political roadblocks remain, though. Letting them keep any profit to prepare for the next crisis would be a simple and smart first step.