Real Estate

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.

Evergrande’s EV deal drives wishful thinking

16 Aug 2023

The embattled property group is giving up control of its stalled electric-car unit to help pay down debt. Its new partner, Dubai-based NWTN, hopes the purchase will charge up its own China strategy. But that seems overly optimistic in an increasingly cutthroat market.

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.

WeWork multitasked when it had just one job

9 Aug 2023

The office subletter conceded it might collapse, just months after a debt-for-equity recapitalization and four years since a funding round valued it at $47 bln. Mismanagement, hype and debt-fueled growth are to blame. Rival IWG suggests the business model works if kept in check.

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.

GIC’s real estate safe haven is hard to copy

26 Jul 2023

Singapore’s $690 bln sovereign fund nearly doubled its real estate allocations to 13% in three years. Its student homes to logistics portfolio provides a timely inflation hedge for one of the most active investors in its class. Peers trying to catch up will overpay.

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.

China Evergrande throws its creditors a brick

18 Jul 2023

The world’s most indebted property developer released results for 2021 and for 2022, a last-ditch move to keep its stock listing. Any resumption in the trading of its shares will also provide a clue on the value of its restructuring plan for some $20 bln of offshore debt.

China property risk rears its ugly head again

14 Jul 2023

After showing some signs of stabilising, the housing market is set to be the biggest drag on second-quarter GDP. But Beijing is wary of deploying large-scale stimulus to prop up prices. The knock-on effects on consumption will be lasting and painful for the economy.

The US government needs a real estate rethink

11 Jul 2023

A proposal floating around the Senate suggests the government could solve a housing shortage by building on federal land. That's a stretch. But Uncle Sam's real estate investments are some of the worst in America, and being concentrated in one expensive city is a risk.

UK could borrow a leaf from Canada’s mortgage book

7 Jul 2023

High levels of housing debt have left British borrowers exposed to rising interest rates. One way to avoid this problem is to fix payments as a proportion of the loan. Some Canadian lenders offer such adjustable-term mortgages, Edward Chancellor writes. The UK could follow suit.

Canary Wharf faces stiff test to reinvent itself

6 Jul 2023

HSBC is quitting the financial hub and moving to smaller quarters. In this Viewsroom podcast, Breakingviews columnists discuss how hybrid working is an existential threat for commercial property and how Canary Wharf’s pivot to residential and retail may only be a partial salve.

Canary Wharf’s pivot looks like a tall order

3 Jul 2023

HSBC’s exit has set tongues wagging about the London financial hub’s demise. To thrive, its main landlord needs to manage a refinancing hump, and the estate needs a sustainable Plan B. Absent these, the Docklands may see the sort of upheaval it experienced in 1992, 2004 and 2015.

Pricey property is a pointy dilemma for Singapore

28 Jun 2023

Rich foreign arrivals including family offices are an easy scapegoat for house prices bucking a global slump. But Asia’s safe haven needs to keep the public onside more than other hubs like Hong Kong as it vies for global capital. The stakes of keeping everyone happy are high.

Capital Calls: Blackstone’s bright property sale

26 Jun 2023

Concise views on global finance: The investment firm led by Steve Schwarzman is selling a group of warehouses to Prologis for $3 bln, demonstrating that some parts of the troubled commercial real estate industry are holding up.