Real Estate

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.

Fractured world is changing investment geography

23 Jan 2024

Washington and Beijing’s quasi-Cold War, and rising protectionism, are already hurting foreign direct investment. Though some states are gaining from China’s falling FDI, overall cross-border flows are down. If Trump becomes US president, they will take another hit.

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.

Blackstone partly cracks new private equity code

9 Jan 2024

Buyouts have been a drag on big asset managers whose investors now prize steadier income. The firm led by Steve Schwarzman wants to square the circle by raising capital with no expiry date from rich individuals. A risky outcome is that it perversely incentivizes a spending spree.

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.

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.

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.

China’s property boost has to sway wary banks

15 Nov 2023

Beijing wants to inject 1 trln yuan into housing projects. It’s a bigger version of a 2022 scheme lenders shunned because developers are saddled with huge debts. Without a broader plan to convince banks the government can stop the real estate rot, the new effort will also fail.

Ping An highlights China property and policy risks

9 Nov 2023

Beijing wants to broker a bailout of troubled developer Country Garden by the $100 bln insurer, Reuters reported. Ping An denies it has been asked. Yet it’s a warning that, as local governments try to defuse debt bombs, even large private companies may face pressure to help.

Vanke’s safety net models new face of China Inc

7 Nov 2023

The $18 bln property developer’s shares jumped after its owner Shenzhen Metro pledged unreserved support and a $1.4 bln tool kit should it need a rescue. As the state takes a bigger role in business, Vanke illustrates how that could reduce both returns and risks for investors.

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.

Broker disruption can grow beyond housing

1 Nov 2023

A $1.8 bln verdict against real estate agents could cut into commissions and deflate sky-high home prices. Industries with similar middlemen were already disrupted. Residential brokers are due for a reckoning. Others, like investment banking, could use dismantling, too.

Capital Calls: Ford, Amazon

26 Oct 2023

Concise views on global finance: The loss per car at the $45 bln automaker’s electric-vehicle unit has jumped 51% in a year. So-so earnings at the $1.2 trln e-commerce giant’s cloud division beat the even lower bar set by rival Alphabet.

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.

Capital Calls: Starboard vs. Murdoch

16 Oct 2023

Concise views on global finance: The investment fund wants the publisher of the Wall Street Journal to spin off its real estate assets a year after another activist agitated for a similar move.

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.