China’s housing market may need more help from the government (Getty Images)
More gloom for China’s property market leads Mingtiandi’s roundup of real estate news from around the region again today as a top US investment bank estimates the sector may need $2.1 trillion in government support. Also in the headlines, HSBC’s Hang Seng Bank unit files a petition in Hong Kong to liquidate a mainland developer and US activist funds are investing in Chinese corporates for the value of their real estate.
China Property Sector May Need $2.1T in State Support Says Goldman Sachs
China’s housing market has further room to weaken as efforts to revive the sector have not gone far enough to arrest a three-year slump, according to Goldman Sachs. The government may need to spend more than RMB 15 trillion ($2.1 trillion) to fix the problems plaguing the sector.
The government needs to help developers with their funding conditions to complete pre-sold but unfinished properties to help ensure social stability, bring existing excess stock of homes to “normal levels” and mitigate annual contraction in property construction, the US investment bank said. Read more>>
Hang Seng Bank Hits Developer Times China with Hong Kong Winding-Up Petition
A Hong Kong bank has filed a request for a court to liquidate Chinese developer Times China, the latest example of creditors trying to recoup money from defaulted builders amid the nation’s property crisis.
The so-called winding-up petition was filed by Hang Seng Bank at Hong Kong’s high court in connection with financial obligations in the amount of about $173.2 million and HK$731.4 million ($93.4 million) respectively, Times China said in a statement filed to the Hong Kong stock exchange. Read more>>
US Activist Funds Target Japanese Corporates for Undervalued Real Estate
The long-concealed market value of Tokyo’s largest skyscrapers is being unveiled by activist investors. In Japan, there’s a huge gap — JPY 22 trillion ($143 billion) by one estimate — between how companies value their real estate assets on their books, versus what those same properties would fetch if sold in the current market.
The result is that billions in value can be unlocked by pressuring companies to sell off these holdings, with Japanese developer Mitsui Fudosan Co. announcing last week it would aim to sell off JPY 2 trillion in real estate assets over the next three years — just two months after news that New York-based activist hedge fund Elliott Management Corp. had built a stake in the company. Read more>>
China Vanke Said Preparing $18B in Assets as Loan Collateral
China Vanke, the Chinese state-backed developer that’s become the latest flashpoint in the nation’s property crisis, is preparing an asset package totaling about RMB 130 billion ($18 billion) to use as collateral as it seeks new bank loans, people familiar with the matter said.
A company executive told analysts about the plan at an investor event on Sunday, the people said, asking not to be identified as the matter is private. Separately, some of Vanke’s regional units are setting up teams for potential asset sales, one person familiar with the matter said. Read more>>
Lawrence Wong to Take Over as Singapore PM From 15 May
Singapore Deputy Prime Minister Lawrence Wong will be sworn in as the country’s fourth prime minister on 15 May, the Prime Minister’s Office announced on Monday. PM Lee Hsien Loong will relinquish the office the same day and thereafter will formally advise the president to appoint Wong to succeed him.
The Prime Minister’s Office said in a statement that Wong has the unanimous support of the People’s Action Party Members of Parliament. In April 2022, Wong was picked by his peers to be the leader of Singapore’s fourth-generation team, paving the way for him to succeed PM Lee. Read more>>
Warburg Pincus Invests in Vietnamese Hospital Group Xuyen A
US private equity firm Warburg Pincus said on Monday that it has invested in Vietnam’s Xuyen A, which operates four general hospitals in the south of the country. Financial terms were not disclosed.
“We believe the private healthcare sector in Vietnam presents a tremendous opportunity for outsized growth, as the hospital infrastructure in the country is significantly underdeveloped,” Saurabh Agarwal, Warburg Pincus’ head of Southeast Asia private equity, said in a statement. Read more>>
Fund Investment in India Real Estate Drops 16% as Foreign Investors Pull Back
The total value of private equity deals in India’s real estate sector declined over the past five years to $3.67 billion in the 2024 fiscal year, marking a 16 percent drop from the $4.36 billion recorded a year earlier, according to an Anarock report.
The property consultancy attributed the slid to to reduced activity by foreign investors, citing concerns over global macro-economic factors and geopolitical instability. Foreign capital accounted for 65 percent of total private equity investments in the sector in the 2024 fiscal year, down from 78 percent in 2020. Read more>>
GLP Sells Down Stake in Vantone After Chinese Developer Invests in US Tech Firm
Vantone Neo Development Group no longer counts GLP as its fourth-largest shareholder after the industrial developer and fund manager opposed the Chinese property builder’s decision to invest in a US producer of optical communications equipment.
A unit of GLP sold a 5 percent stake in Vantone Neo to Hesheng Wealth on 12 April for about RMB 699 million ($96.6 million), or RMB 7.04 (97 US cents) per share, the Beijing-based firm said recently. GLP’s stake fell to about 2.6 percent from 7.6 percent. Read more>>
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