SPH Chooses Temasek-Backed Offer Over Keppel and More Asia Real Estate Headlines

In today’s roundup of regional news headlines, Singapore Press Holdings terminates Keppel’s offer for the publisher’s real estate business in favour of Cuscaden Peak, cash-strapped Evergrande vows to restart construction and home sales, and China’s bad-debt managers move to support real estate developers.

SPH Terminates Keppel Offer, Moves Ahead With Cuscaden

Singapore Press Holdings has decided to exercise its right to terminate bidder Keppel Corporation’s offer and allow SPH shareholders to vote on a rival S$3.9 billion ($2.9 billion) bid from another Temasek-backed group.

“The board would like to update shareholders that, following consultation by the company with the Securities Industry Council regarding the termination right, the SIC has ruled that it has no objections to the company’s exercise of the termination right,” SPH said late Wednesday. Read more>>

Evergrande Says Construction Restarting, Vows No Fire Sale

Nervous bondholders fretting over a potential fire sale at China Evergrande got an unexpected reprieve. Instead of flogging holdings at a discount, the distressed real estate developer will restart construction and sales.

Chairman Xu Jiayin hinted this week that “even selling assets dirt cheap would hardly be enough to pay off debts”, the first public indication that the company doesn’t own enough to cover $300 billion in liabilities. It might explain why Xu was flogging his own apartments and art collection, to help provide Evergrande with short-term relief. Read more>>

Debt Fears Swirl Around Logan as China Property Woes Deepen

Concerns over the financial health of Logan Group have shaken investor confidence in what was seen as one of China’s stronger developers, deepening the turmoil faced by the crisis-hit industry.

Fitch Ratings downgraded the firm this week, citing a “recent disclosure of a private debt arrangement that is off its balance sheet”. Questions about the possible scale of Logan’s undisclosed debt had swirled in previous weeks, pushing its dollar bonds to record declines and sending its shares to the lowest since 2017. Read more>>

China Bad-Debt Managers Move to Support Stressed Developers

China’s biggest bad-debt managers are moving to support cash-strapped real estate developers at the urging of policymakers in Beijing, according to people familiar with the matter, adding to official efforts to contain the fallout from a string of defaults.

Regulators have told state-owned firms including China Huarong Asset Management and China Cinda Asset Management to participate in the restructuring of weak developers, acquire stalled property projects and buy soured loans, the people said, asking not to be identified discussing private information. Read more>>

China Developer Borrowing Plunges 70% in January as Market Cools

Chinese property developers’ borrowing declined 70 percent in January from a year earlier, highlighting the sector’s fundraising struggles despite recent easing signs from regulators.

Developers’ fundraising through all channels totaled RMB 79.2 billion ($12.4 billion) in January, a 16.6 percent decline from December, according to data from China Index Academy, a research organisation specialising in real estate. Property companies raised RMB 266.5 billion in January 2021 and RMB 224.7 billion in January 2020. Read more>>

Hong Kong Malls Could Lose 30% of Sales as COVID Measures Bite

Major mall owners in Hong Kong stand to lose as much as 30 percent of sales in the coming months as shopping centres in areas hit by COVID-19 cases suffer from dwindling traffic amid lockdowns and tighter social distancing curbs.

Analysts said losses could spread industry-wide, beyond the existing affected areas in Kowloon and New Territories, as health experts predict the current fifth wave of outbreak in the city to result in as many as 28,000 daily cases and a higher death toll by June. Read more>>

Tokyu Land Gets Partner for $1.7B Shinjuku Commercial JV

Odakyu Electric Railway announced Wednesday that it would work with Tokyu Land on the JPY 200 billion ($1.7 billion) redevelopment of the former Odakyu Department Store near the west exit of Shinjuku railway station.

The project will see a 48-storey office building with construction to start this October. Odakyu will provide the land, while Tokyu will be in charge of development. Once complete, the two companies will share ownership. Read more>>

Singapore New Private Home Sales Held Steady In January

Demand for new homes in Singapore held steady in January in spite of new cooling measures introduced last year. Based on caveats lodged, analysts estimated that developers sold 639 new private homes last month, a marginal 1.7 percent dip from December 2021’s 650 units.

Compared with the previous year, the latest estimates are 60.9 percent lower than the 1,633 units sold in January 2021. That said, OrangeTee & Tie senior vice-president of research and analytics Christine Sun noted that January 2021’s high volume was “an anomaly”. Figures were boosted by the launch of the 1,862-unit megaproject Normanton Park, which moved 645 units that month. Read more>>

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