Asia’s roiling markets may have capsized an IPO expected to be among the biggest this year as reports emerge that PAG is backing away from its plan for a public listing. Also in the news, China Huarong Asset Management warns of losses tied to the real estate market and Hong Kong’s Chinese Estates is looking better as it trims its exposure to Evergrande.
PAG Weighs Delaying $2B Hong Kong IPO, Sources Say
PAG, an Asia-focused private equity firm backed by industry giant Blackstone Inc., is considering a delay of its planned initial public offering in Hong Kong amid market volatility, according to people familiar with the matter.
The firm, led by Chinese dealmaker Weijian Shan, is now more likely to make its debut in 2023, the people said, asking not to be identified because the matter is private. PAG is keen to avoid the sale taking place against a backdrop of stock market volatility, potentially leading to investors demanding steep discounts and seeing weak trading in the first days after listing, the people said. Read more>>
Huarong Shares, Bonds Slump After Warning of $2.8B Loss
China Huarong Asset Management Co.’s shares and bonds plunged after the bad-debt manager said it expected a net loss of RMB 18.88 billion ($2.78 billion) in the first half of the year as credit impairments surged.
The predicted loss compares with a profit of RMB 158 million the Beijing-based firm reported in the six months through June 30 last year. Credit impairment losses “increased significantly” in the current period while the firm also booked “significant” realized losses on some equity investments due to market volatility, it said in a filing Tuesday without elaborating. Read more>>
Korea’s NPS Upped Alternative Investment by 33% in 2021
The National Pension Service (NPS) of South Korea committed KRW 204.4 trillion ($156.7 billion) to alternative investment as of end-2021, up 32.7 percent from the previous year, the NPS said on Aug. 12. The world’s third-largest pension fund manages 918 trillion won in assets.
Of the committed capital, 99.2 trillion won has been invested in alternative assets. Cash reserves and other liquid assets increased 48.8 percent to 105.2 trillion won as of end-2021 over the previous year. Read more>>
Chinese Estates Books Profit After Paring Evergrande Stake
Chinese Estates Holdings, the Hong Kong developer controlled by the family of fugitive property tycoon Joseph Lau Luen-hung, swung to profit in the first six months of the year as it disposed of more than half of HK$364.6 million ($46.5 million) worth of shares it held in debt-ridden mainland developer China Evergrande Group.
Chinese Estates booked a profit of HK$870.6 million in the January to June period, a reversal from a HK$35.5 million loss in the same period a year ago, according to a filing with the Hong Kong exchange on Wednesday. Read more>>
Chinese City Pushes SOEs to Buy Homes From Indebted Developers
Huzhou in East China’s Zhejiang Province on Tuesday said it would encourage state-owned enterprises (SOEs) to purchase apartments from struggling real estate developers to use as indemnificatory and resettled housing, according to a notice released by the local Bureau of Housing and Urban-Rural Development.
The move could help ease the inventory pressure for some real estate companies. By involving different aspects and capital, such as state-owned enterprises, it offers a new approach to help solve the current problems facing the real estate sector, as well as a new housing supply pattern for the SOEs, Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told the Global Times on Tuesday. Read more>>
Singapore’s Elite Partners Buys Poland Warehouse
Elite Partners Capital has completed an off-market acquisition of a warehouse in Radomsko, Poland for close to EUR30 million. This marks the firm’s third purchase within a span of six weeks, after announcing acquisitions in UK and Netherlands.
The asset is well-located in Central Poland, being in the immediate vicinity of the A1 motorway, national roads DK 142 and DK 91, as well as key railway junctions. It is the first facility within “LOOGIC Park Radomsko” logistics park which will eventually house 11 warehouse halls totalling 380,000 sqm over 80 hectares of land. Read more>>
Glut of Prime Office Space Could Further Depress Hong Kong Rents
Hong Kong’s supply of new prime office space is at a 24-year high, and rents are likely to drop by as much as 5 per cent this year as the market heads for a “new normal” with rents as much as 30 per cent below a 2019 peak, according to analysts.
With 2.8 million sq ft of new prime space hitting the market this year, supply will reach a level not seen since 2008, when it stood at 3.5 million sq ft, according to property consultancy Cushman & Wakefield. Read more>>
New World’s Cheng Kicks Off $3B Sale of Aussie Energy Firm
Chow Tai Fook Enterprises Ltd., backed by Hong Kong billionaire Henry Cheng, is preparing to kick off the sale of Australian power company Alinta Energy, in a deal that could value it at about $3 billion, people with knowledge of the matter said.
Chow Tai Fook is working with Goldman Sachs Group Inc. on the potential divestment, said the people, who asked not to be identified as the information is private. The company has reached out to several prospective suitors to gauge interest in Alinta and is planning to formally launch the sale process as soon as the coming weeks, the people said. Read more>>
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