Real Estate

Blackstone’s Finnish fiasco adds to property slump

10 Mar 2023

Steve Schwarzman's firm defaulted on a $313 mln securitised loan backed by Nordic offices, after failing to win support from bondholders. More messy workouts are likely as troubled deals come due. It’s an opportunity for savvy players, and another worry for European real estate.

Capital Calls: Eli Lilly

1 Mar 2023

Concise views on global finance: The drugmaker is reducing the list price on its insulins by 70%. Problem is, few actually pay anything close to the sticker price. Insurers will probably prefer to use insulins from rivals, assuming they can keep negotiating big discounts.

Hong Kong’s office landlords face a tough rebound

1 Mar 2023

Global firms like Invesco are signing long leases but vacancy rates are at 12%, more than double Tokyo and Singapore. The Asian hub’s delayed reopening coincides with fresh supply hitting the market too. Hong Kong needs corporate tenants from mainland China to return fast.

China’s property U-turn is fuel for debt rejigs

10 Feb 2023

With Beijing allowing credit to flow to the sector again, developers can see a better future. Those in default, including Evergrande and CIFI, have a new incentive to restructure their U.S. dollar bonds. It will also make creditors at the negotiating table more demanding.

Public Storage has advantage in clutter battle

6 Feb 2023

The stuff-storing giant has kicked off an $11 bln takeover battle with an offer to buy smaller rival Life Storage. Based on today’s prices, the proposal leaves room for counterbids. But with storage companies looking historically expensive, Public’s stock gives it an advantage.

Leery buyers put screws to U.S. homebuilders

31 Jan 2023

Pulte, which constructs more upscale houses, lifted quarterly sale prices 17%, but D.R. Horton and Lennar sacrificed operating margin to offload homes. High interest rates are keeping 80% of Americans downcast about the market. Optimistic valuations tell an oddly different story.

Surging big-city rents reveal real estate puzzle

27 Jan 2023

The cost of renting apartments in New York, London and Sydney soared last year even as higher interest rates pressured property values. Professionals want more home-working space while students are returning to cities. Yet rents and house prices cannot diverge forever.

China’s property debt red lines need a redraw

11 Jan 2023

The policy Beijing introduced in 2020 to cap developers' leverage is backfiring. The “three red lines” on debt ratios are now aggravating market stress and impairing balance sheets. Officials are considering blurring or moving the lines. They might have to erase them.

Blackstone’s clever REIT deal punts big question

4 Jan 2023

A $4 bln investment in its real-estate fund shows Blackstone can pull in big-name money on good terms for itself. It doesn’t, though, prove the fund’s assets are worth what they claim to be. Steve Schwarzman’s firm has firepower aplenty, but hasn’t answered valuation qualms.

Singapore withstands a global property downturn

3 Jan 2023

The Lion City’s housing prices are up 14% in a year, compared to declines in Hong Kong and other major cities. A pandemic-induced construction shortfall and increasing foreign demand are factors. Rising interest rates will cool, but not halt, Singapore’s real estate boom.

New shareholder ballots win vote of confidence

20 Dec 2022

In the first election under rules enabling votes for both company and dissident board nominees, investors at $5 bln apartment owner Aimco chose a split ticket. Victory for one of activist Jonathan Litt’s two candidates augurs more compromise – and power for proxy firms like ISS.

China property gets $650 mln vote of no confidence

13 Dec 2022

Controlling shareholder Yang Huiyan is shedding 7% of Country Garden's services arm, a first. She doesn’t seem to need the money given state support for the developer, and it’s an odd time to sell. It suggests deep scepticism about Beijing’s real estate rescue package.

The implications of Blackstone’s property wobble

8 Dec 2022

The giant alternative asset manager’s market value dropped by $8 bln after it said investors were exiting its flagship real estate fund. In this Viewsroom podcast, Breakingviews columnists discuss the causes of the jitters and how rivals are vulnerable to similar moves.

Blackstone feeds private-market valuation fears

1 Dec 2022

The buyout shop is limiting redemptions from a $125 bln real estate fund after investors flooded it with requests, echoing a broader selloff in publicly traded peers. Limiting withdrawals risks a dangerous feedback loop. And a profitable Las Vegas deal offers limited reassurance.

Blackstone mall IPO puts wealthy India on display

1 Dec 2022

Brands like Zara suffer from a dearth of quality shopping centres like those the asset manager is floating. Its portfolio boasts high occupancy rates in both posh and up-and-coming locations. Owners collect rent plus a share of revenue. That’s compelling as the rich get richer.

Airbnb has promise as the quasi-immobility firm

30 Nov 2022

The $60 bln home-sharing platform will list big landlords’ apartments so tenants can sublet them out on its app. Like its regular offering, this may draw local ire. But giving old-world property giants a way to benefit from transient post-pandemic lifestyles is a neat innovation.

China property bailouts leave most out in the cold

30 Nov 2022

Beijing is letting homebuilders use equity financing again, and state banks extended $220 bln in new credit lines. But policymakers want to avoid propping up the whole market, so only a handful of developers passed the test. The rest face more stress – as do foreign bondholders.

Capital Calls: Funky debt shock

29 Nov 2022

Concise views on global finance: Germany property group Aroundtown won’t be the last to flout bond market convention on hybrid debt.

U.S. housing faces longer descent to basement

22 Nov 2022

With mortgages near 7%, homebuyers are staying on the sidelines. Higher interest rates will be around for a while, though. Incentives from builders such as D.R. Horton help, but it will take significant price declines from the $471,000 median before the market picks up again.

Hybrid working is wild card in office slump

21 Nov 2022

Workspace landlords like British Land and France’s Gecina are facing a storm. Higher interest rates are cutting property values, just as a weak economy pushes up vacancy rates. And, with UK workers spending half their week at home, employers have plenty of scope to cull space.