Real Estate

Hammerson’s M&A fumble leaves defences down

18 April 2018

The shopping centre operator ditched a 3.4 bln pound plan to buy rival Intu after shareholder pressure. The group will now sell assets and focus on posh malls, but the U-turn makes it vulnerable. The UK’s strict takeover rules give rejected suitor Klepierre a narrow way back.

Hammerson has walked away from wrong deal

13 April 2018

The mall operator’s aversion to Klepierre’s 5 billion pound offer has driven away the suitor. The UK company is now free to pursue the takeover of a smaller rival in its home market. But the drawbacks of the plan and its clumsy defence risk irking investors.

Leaving Intu at till is first step for Hammerson

5 April 2018

The UK shopping centre owner is waiting to see whether rival Klépierre makes a formal bid before it commits to buying smaller Intu Properties. Shareholders have already turned down their thumbs at the Intu deal. A sweeter offer from the French group would be a better outcome.

Private equity’s retail fix risks landlord revolt

5 April 2018

Ailing UK food and fashion chains like private equity-owned New Look or Prezzo increasingly use fast-track insolvency tools to scotch costly leases. The fad gives companies a shot at recovery, while avoiding a risky administration. But property groups may tire of taking the pain.

Brookfield’s GGP offer shows writing on the mall

27 March 2018

The real-estate owner raised the headline value of its offer for the U.S. shopping-center operator to $15.3 bln. Yet the fall in Brookfield’s shares since it first made a bid makes the new offer look worse. Split the difference, and Brookfield is probably being rational.

Facebook leads Silicon Valley to its Minsky moment

21 March 2018

The social network feasted on burgeoning data and devices, just as banks gorged on easy money before the crisis. Society’s focus on benefits over risk gave tech companies free rein – until the resulting abuses couldn’t be overlooked. As user trust evaporates, regulation beckons.

HNA is enjoying a pleasant stay at Hilton

7 March 2018

The cash-strapped Chinese group bet $6.5 bln on the U.S. hotelier, using lots of borrowed money. It has now sold stock in the spun-off Park Hotels for $1.4 bln, while retaining another $7.6 bln stake. HNA has been a crazily prolific investor, but this trip was worth it.

Chinese vacancy casts shadow on Hong Kong property

28 February 2018

An obscure mainland group buying a $5 bln skyscraper from Li Ka-shing has pulled out. Locals are due to take its place. Similarly, HNA recently flipped land to a Hong Kong developer. If the southbound rush into commercial property abates, the market could regain a little sanity.

Trump Jr. corrodes India’s anti-corruption efforts

23 February 2018

The U.S. president's son is promoting his family real-estate brand and was due to speak in New Delhi on Indo-Pacific ties. A backlash saw that revised to a fireside chat. Still, the mix of business and politics undercuts Premier Modi's own efforts to end crony capitalism.

JPMorgan finally dresses the part

21 February 2018

Building a new New York headquarters may sound like exuberance on the part of boss Jamie Dimon. But the bank needs space and can afford it, and the city could gain too. Since JPMorgan is outperforming rivals with newer digs, it’s not just a case of keeping up with the Blankfeins.

Fannie, Freddie rear ugly heads from 10-year limbo

15 February 2018

The two are asking the U.S. Treasury for $4 bln after recent tax cuts dented fourth-quarter earnings. It’s not the rescue critics claim. But the awkward dependence on public coffers means next time, it could be. The politics of needed reform have only worsened since the crisis.

Google’s gray hair starts to show in Chelsea

6 February 2018

The search engine may be paying over $2 bln for a building in the NYC nabe. It sounds more a mark of urban elitism than creative disruption. In fact, buying prime real estate like Chelsea Market is rational – especially as new industries begin sharing the same needs as old ones.

Spain’s property party is looking bleary-eyed

6 February 2018

Ten years after the last crash, Spanish property deals and IPOs are seeing record volumes. A strong economy makes another bust unlikely. But investors can no longer rely on rising values to earn their crust. An interest rate jolt could bring the fiesta to an abrupt end.

Chinese hotelier delivers unexpected wakeup call

31 January 2018

Using a JV with TPG, China Lodging is buying two Beijing properties. It's a departure from the scary-sounding and lucrative "manachised" model. Managing and franchising – but not owning – hotels has generated big returns. The $200 mln deal led to $500 mln of lost market value.

Tricky startup key may unlock empty Chinese rooms

17 January 2018

Warburg Pincus expanded its shared-economy suite by leading a fresh $620 mln investment into Ziroom. The unicorn capitalizes on China's housing-boom crackdown by flipping fallow flats into rentals. It's a clever strategy, but one that will depend on lifting dismal profit margins.

Metrovacesa’s property fiesta is worth attending

11 January 2018

The Spanish real estate group is listing, a decade after imploding. A lack of planning permissions on its land bank warrants a discount to rival Neinor Homes’ recent IPO. Still, Metrovacesa’s domestic strength makes it a reasonable way to access a recovering Spanish market.

Wanda’s sports spinoff would help trim flab

5 January 2018

The Chinese conglomerate could float sports assets acquired in haste, including a sports marketer and a triathlon organiser, Reuters says. Fresh funds could help cover offshore debts. Streamlining might also persuade regulators to let the main property unit list onshore.

Xi’s tighter grip will tax Chinese real estate

26 December 2017

The president will sideline traditional policy shops, in particular the Ministry of Finance, and assign policymaking to opaque smaller groups. That will accelerate some reforms, in particular the long-discussed national property tax, which could squeeze the housing market.

Fannie and Freddie get band-aid instead of surgery

21 December 2017

The U.S. housing finance firms will be allowed to keep $3 bln in capital to absorb losses, just as their cushion was slated to go to zero. A draw on their $258 bln bailout fund could’ve also spooked markets. An overhaul is needed, but political will remains an obstacle.

Harvard fund helpfully expels star pupils

18 December 2017

The university endowment is spinning out its real-estate team to buyout firm Bain. Investment boss Narv Narvekar had promised to outsource more of the $37 bln portfolio. Pushing out one of the bits that’s actually turning in stellar performance is a reassuring sign he means it.