In today’s roundup of regional headlines, Chinese developer Vanke gets the green light from mainland authorities to divest its property management unit in a Hong Kong IPO, while the ongoing sale of Pfizer’s South Korean headquarters is experiencing a problem.
Vanke gets green light for Hong Kong Property Management IPO
Property giant China Vanke has received regulatory approval to spin off its property management services unit for an initial public offering in Hong Kong.
The China Securities and Regulatory Commission on April 1 accepted Onewo Space-Tech Service’s application to issue 180 million shares on the Hong Kong stock exchange, the Shenzhen-based parent company said Monday. It still has to pass an HKEX hearing. Learn more>>
Sale of Pfizer’s Korea headquarters halted following disappointing response
South Korea’s GRE Partners Asset Management, a real estate investment firm, recently suspended the sale of Pfizer Pharmaceuticals’ Korean headquarters. GRE, which began the sale process in May and picked JLL Korea as lead manager last month, felt the gap between supply and demand was too wide, market insiders said.
The Pfizer Tower is located in Myeong-dong, in the central business district of Seoul. The office tower has 15 stories above ground and four underground with a gross floor area of 15,868 square meters (170,802 sq ft). It was built on a 1,887 square meter plot in 1984. Learn more>>
Chinese banks will forfeit $4.6 billion if mortgage breached, Citi says
Chinese banks would lose 31 billion RMB ($4.6 billion) in interest income on mortgages under a proposal to give homebuyers in stalled projects a temporary payment holiday, according to Citigroup estimates.
The figure stands at 1.2% of the banking system’s estimated net profit for 2023, assuming that 561 billion RMB of home loans would be at risk if Beijing approves the plan, analysts led by Judy Zhang wrote in a report on Tuesday. of research. Credit risk from the latest wave of housing stress is manageable for most banks, analysts say. Learn more>>
China risks housing sector hard landing, ex-official warns
China risks a hard landing in the real estate sector and needs to step in to address both the shortage of cash for developers and recent mortgage payment boycotts, a former official said.
“Preventing the risk of a ‘hard landing’ in the real estate sector should be high on our agenda and given special attention,” said Zhu Guangyao, who served as vice finance minister from 2010 and 2018, during an online seminar on Monday. Local governments should handle boycotts well and “be strictly on guard to prevent them from spreading and triggering a banking crisis,” said Zhu, who is now an adviser to the State Council, which is the Chinese cabinet. Learn more>>
Chinese developers face insolvency as investors tire of bond extensions
At least a fifth of rated Chinese property developers will eventually become insolvent, putting up to $88 billion of their distressed bonds at risk, according to S&P Global Ratings.
While some developers have resorted to debt extensions and bond swaps to buy time to avoid default, investors will soon run out of patience and pursue their rights in court or debt restructuring. debt if a recovery in the sector does not materialize by the first quarter of 2023, the rating agency said. Learn more>>
Fitch downgrades Guangzhou R&F to ‘restricted default’
Fitch Ratings downgraded Guangzhou R&F Properties and its unit R&F Properties (HK) to “restricted default” one notch above “default” on Monday after the property developer extended the maturities of its offshore bonds.
Last week, R&F received consent from its creditors to extend the maturities of $4.9 billion in offshore bonds, the latest move by a Chinese developer to avoid default. Learn more>>
Chinese bond defaults hit $20 billion in 2022, doubling last year’s total
The value of bond defaults in China in 2022 has already more than doubled from a year ago as the accelerating debt crisis ripples through the country’s $2.7 trillion property market on other sectors of the economy.
Chinese issuer defaults have topped $20 billion so far this year, up from around $9 billion for all of last year, with real estate developers accounting for most of the defaults, said deputy director Augus To. of research at ICBC International. Learn more>>
Boustead Projects Unit wins S$300m design and build contract
Singapore-listed Boustead Projects’ engineering and construction subsidiary, Boustead Projects E&C, has won a 300 million Singapore dollar ($215.5 million) design and construction contract, the service provider announced on Monday. real estate solutions.
The latest contract, awarded by a Fortune 500 company, is the largest project ever for the band, Boustead Projects said. Learn more>>
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