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.
Chinese property crisis drives derivative rethink 7 Jun 2022 Beijing has helped some private developers with bond issues by letting them offer protection via tools like credit risk mitigation warrants. So far it’s symbolic and over-reliant on reluctant state banks. If private money can be wooed, however, the market could finally take off.
ESG raider needs to dig deeper 31 May 2022 Jeff Ubben’s Inclusive Capital has made a $1.9 bln offer for UK homebuilder Countryside. It’s both a bet on the need for more affordable housing, and an opportunistic raid on a target tainted by governance woes. But the ValueAct founder’s lowball bid needs a little sprucing up.
Seizing oligarch assets is a slippery slope 26 May 2022 The EU hopes to confiscate $31 bln of yachts and villas from blacklisted billionaires. Washington is mulling similar steps. However wrong Russia’s invasion of Ukraine may be, short-circuiting the criminal process to seize property risks weakening trust in Western rule of law.
China’s real estate renovation is too cosmetic 26 May 2022 The central bank joined wider efforts to help the property sector by cutting five-year lending rates to 4.45%. Banks remain sceptical of developers however, and bonds are trading at distressed prices. Lack of faith in the industry’s foundations make it harder to build a recovery.
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.
Property tie-up puts London landlords in charge 9 May 2022 Capco, owner of retail hub Covent Garden, is planning a 3.6 bln pound merger with West End neighbour Shaftesbury. Capco’s 25% stake in its larger rival helps explain the absence of a premium. If regulators approve, the main benefit will be greater bargaining power with tenants.
Adler gifts German watchdog a shot at redemption 4 May 2022 BaFin’s probe into the property group has gained added weight after KPMG’s refusal to approve its 2021 accounts. The mess is an important test for new boss Mark Branson after the regulator’s Wirecard failings. Adler’s patchy disclosure and shaky governance make it an easy target.
Decamping auditors slam door on Chinese developers 28 Mar 2022 Shimao and Powerlong are the latest to lose PwC as the verifier of their books. It’s a little late for international examiners to be taking a stand, but mass switching to local firms will intensify scrutiny of the industry. The offshore borrowing market also should all but close.
The Covid effect: Sheds, Hong Kong, Conferences 24 Mar 2022 The pandemic continues to shape business and policy around the world. In this Viewsroom podcast, Breakingviews columnists debate a possible 21 bln euro bid for city-centre warehouses, the relaxing of restrictions in Hong Kong, and a recent conflab of M&A advisers in New Orleans.
New Evergrande crisis may cue tougher intervention 24 Mar 2022 The property developer was largely left alone to fix its financial mess. The discovery of misused funds at a subsidiary heightens the risk offshore investors head to the courts. That makes it more likely China steps in. Its handling of defunct conglomerate HNA could be a guide.
Prologis has to go extra mile for Blackstone sheds 22 Mar 2022 The property giant offered over $23 bln for Mileway, which owns European warehouses. Sky-high valuations and frenetic M&A imply it’s a good time for Steve Schwarzman’s group to cash out. But limited city space and booming online deliveries mean asset values can keep rising.
China’s property rebound is unstable 22 Mar 2022 Homebuilder stocks have resurged on Beijing’s promises to stabilise the sector and the shelving of a real estate tax. House prices in some top cities are recovering. But the bond market is uneasy and defaults continue. Absent more policy support, investor relief is premature.
Capital Calls: Tencent, Ted Baker 18 Mar 2022 Concise views on global finance: The Chinese web giant may have to separate its mobile payments business from its popular social media arm; U.S. buyout fund Sycamore can afford to be generous towards the hard-pressed UK fashion group’s shareholders.
EU housing boom risk is more social than financial 11 Mar 2022 Watchdogs in Germany and elsewhere have hiked bank capital requirements and warned property may be 30% overvalued. Yet mortgage-lending standards remain solid, suggesting pandemic savings are mainly to blame for the runup. There’s little regulators can do about wealth inequality.
UAE could be Russian oligarchs’ next playground 4 Mar 2022 Amid U.S. and European asset freezes, Moscow’s billionaires need new bases. The United Arab Emirates has international schools, a Western feel and, in Dubai, a relaxed approach to sanctioned parties. Most of all, it’s currently taking a different stance over Ukraine to the West.
Capital Calls: Theme park M&A, Energy IPO 16 Feb 2022 Concise views on global finance: Cedar Fair rebuffed a takeover offer from rival amusement park operator SeaWorld, but other buyers may be reluctant to join the ride; The $8 bln Vaar Energi, majority owned by Italy’s Eni, sees its shares dip on their first day of trading.
Capital Calls: ABB’s car chargers, Airport M&A 10 Feb 2022 Concise views on global finance: The Swiss engineering group’s listing plans come at an unfortunate moment; Britain’s John Menzies takes a risk with rejection of “opportunistic” approach from Kuwaiti air services group NAS.
Irish housing bind opens door to radical options 31 Jan 2022 The cost of renting in Ireland has soared, but so has the cost of buying a home. Regulatory reluctance to relax bank lending standards means demand won’t rise to help stimulate new supply. The impasse makes it more likely that leftist Sinn Féin may win the next election.
Beijing has shortcut to prop up real estate 28 Jan 2022 Regulators are trying to stabilise the market, but buyers are reluctant and economic stress is increasing. Sharp cuts to interest rates or easing up on property developers would sabotage deleveraging efforts. Relaxing heavy mortgage restrictions is an easier compromise.