Real Estate

Capital Calls: Apple tests discretionary spending

28 Sep 2022

Concise views on global finance: The company’s reversal on iPhone 14 production is a sign that inflation-battered consumers are thinking differently about discretionary items.

UK swaps one cost-of-living crisis for another

27 Sep 2022

The Bank of England may raise rates past 5% to stem the inflationary effect of Chancellor Kwasi Kwarteng’s tax cuts. Homeowners, saved by the government’s energy price cap, now face a surge in mortgage costs. That will sap growth and add to pressure for banks to help customers.

China property IPO bets on big name to calm fears

22 Sep 2022

The country’s largest developer, Vanke, wants an $8 bln valuation for its services unit in Hong Kong’s top float this year. That’s below an earlier price tag, reflecting the sector’s fragile state, but still pricier than some peers. A brand premium in soft markets looks bold.

Anxious Kaisa investors throw good money after bad

21 Sep 2022

Foreign bondholders in the Chinese property firm, which has $12 bln of offshore credit in default, are offering $2 bln to take over stalled projects plus restructure debt. A similar proposal failed last year, but as its woes worsen, Kaisa may reconsider. Pricing is the trick.

Capital Calls: UBS fintech U-turn, UK housebuilder

5 Sep 2022

Concise views on global finance: CEO Ralph Hamers cancels the $1.4 bln acquisition of robo-adviser Wealthfront; Countryside Partnerships accepts a 1.3 bln pound offer from UK rival Vistry just three months after rejecting a higher bid.

Hong Kong developers’ China edge has limits

5 Sep 2022

The Asian hub’s tycoons including New World’s Adrian Cheng are eyeing prospects in the People’s Republic as rivals struggle. Conservative balance sheets will help. Yet that prudence also damps total returns to levels that stronger mainland peers have consistently beaten.

Cash buyers have whip hand in London office slump

17 Aug 2022

The value of the UK capital’s buildings could fall 12% in the next 18 months, Bank of America reckons. But private equity houses will struggle to swoop as high interest rates make debt-fuelled purchases uneconomic. Cash-rich pension funds will put a floor on price declines.

Capital Calls: Chinese property bonds

16 Aug 2022

Concise views on global finance: Beijing plans to guarantee new domestic fixed-income issues by half a dozen homebuilders, but that’s hardly enough to revive overall demand for housing.

Capital Calls: Tech bros give Allbirds the boot

9 Aug 2022

Concise views on global finance: The maker of popular nondescript sneakers with a purpose is getting tripped up on demand. Its stock price pounding may make it vulnerable to a takeover.

Country Garden snagged by risky ties that bind

28 Jul 2022

A plan by China’s biggest property developer to raise equity led to $2 bln in lost market value for its management company. There’s growing concern about the unit’s independence after a scandal at rival Evergrande. A cleaner break, like having a different board chair, might help.

China’s rental push could grease property slide

27 Jul 2022

Officials struggling to complete $300 bln of stalled apartment projects are mulling flipping them into leased units. More inventory is good in the long run but a falling housing market needs buyers more than renters. Depressing already low yields will deter investment.

Evergrande gives Beijing another reason to step in

25 Jul 2022

The developer’s CEO resigned after a probe found he helped divert funds from a subsidiary. This puts a restructuring plan for $19 bln of offshore bonds at risk. Authorities grappling with a widening property crisis now have more incentive to intervene directly in Evergrande.

Chinese banks’ half-truths hinder mortgage fix

19 Jul 2022

Banks say homebuyers' refusal to pay instalments warrants little concern but the unfolding pain might double the underreported bad debt ratio to 3%. Coming clean on the mess in a big and traditionally safe part of the loan book is a prerequisite to stemming systemic risk.

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.

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.

Warehouse $110 bln combo doesn’t quite deliver

13 Jun 2022

Real estate company Prologis has finally clinched a merger with Duke after months of courting its rival. Warehouses remain a hot area, but the consumer outlook is darkening, and big-name client Amazon is putting on the brakes. Moreover, the proposed cost savings look overstuffed.

New York hybrid working woe, Toshiba’s options

9 Jun 2022

The work from home revolution looks here to stay with nearly 80% of surveyed employers accepting it as the new norm. In this Viewsroom podcast, Breakingviews columnists discuss how this will be painful for office landlords. Plus, the $22 bln Japanese company’s mysterious future.

New York has a towering hybrid work problem

6 Jun 2022

Only four in 10 Manhattan-based workers are in the office on any given day, and vacancy rates are twice the historical average. Some big tenants are downsizing. If hybrid work trends stick, landlords already wrestling with inflation could wind up with 40% fewer desk-jockeys.

Hostile warehouse deal just about stacks up

11 May 2022

Real estate firm Prologis wants to buy smaller rival Duke, which has previously rejected a tie-up. The $24 bln all-stock deal represents a 29% premium, which should withstand lurching markets since both firms’ shares tend to move in tandem. It’s appealing enough to deserve a hearing.

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.