Li Ka-shing’s successor faces big disruptions 20 Jun 2017 The retirement of the 88 yr old would signal the end of an era for Hong Kong's tycoons. His eldest son is waiting in the wings to inherit the empire topped by CK Hutchison. He faces daunting challenges from the inevitable departure of his father’s trusted lieutenants to Brexit.
Public housing pressure builds for next HK leader 20 Jun 2017 The city's real estate bubble, buoyed by low rates, limited supply and mainland money, is stoking social unrest. House prices are out of reach for most; rents are punitive. Like prior leaders, Carrie Lam promises more affordable housing. It's better policy that's in short supply.
India’s $1.3 trln housing boom has a solid frame 22 Jun 2017 Developers are turning their attention from luxury to cheap housing, as a raft of subsidies and tax incentives boosts demand. A sustained uptick could provide a fillip to the economy. Investors are betting politicians will play their part and keep land in supply.
Epic rally leaves China Evergrande on shaky ground 12 Jun 2017 The Hong Kong-listed developer is 2017’s best-performing major stock, up roughly 240 pct. Business is brisk, costly debt is being repaid, and a bold mainland listing is on track. It has also quit a distracting battle over rival Vanke. A $28 bln market cap still looks overdone.
Shawbrook Bank bidders bet that slower is better 5 Jun 2017 Buyout firms Pollen Street Capital and BC Partners have raised their offer for the UK challenger bank to 868 mln pounds. The price looks low given management’s aggressive growth targets. But past troubles mean scrapping those goals might be the whole point.
Blackstone sells China some unlikely trophy assets 2 Jun 2017 The buyout firm is cashing in on an appetite for logistics by selling Logicor to CIC for 12.3 bln euros. A European e-commerce boom and shortage of property is driving up valuations and rents. Prime warehouses now have better yields than a luxury store in London’s Mayfair.
Hong Kong fights losing battle with property boom 22 May 2017 The territory is trying yet again to cool a red-hot real estate market. New curbs will make home loans less profitable for banks and increase down payments for borrowers. An acute land shortage and Chinese buyers' desire to diversify away from the yuan will limit the impact.
British property shows signs of wear and tear 17 May 2017 British Land’s full-year earnings increased 7.4 percent and leasing activity is surprisingly strong. Tweaks to the group’s portfolio should offset Brexit pressures. Still, shorter leases, lower values and a step-up in disposals are a better indicator of what’s to come.
Relief offer hints at solution for Fannie, Freddie 11 May 2017 Regulator Mel Watt wants the housing-finance firms to rebuild their capital buffers to avoid fresh bailout risk. It’s a temporary band-aid while the administration ponders the firms’ legal status. Yet Trump’s Treasury should seize the idea as the basis for more-lasting reform.
Canada’s subprime trouble is drama, not crisis 8 May 2017 A run on the Home Capital mortgage lender has eerie echoes of 2008. But structural strengths and regulatory awareness mean the Canadian financial system is far sounder than its neighbor's before the crisis. Still, high housing prices and consumer-debt levels are economic risks.
Cheap boss is a luxury Bovis can’t afford 2 May 2017 The troubled UK homebuilder's investors approved a hefty pay package for its new boss. He could earn over 100 times the average UK construction worker, up from 76 times for his predecessor. A politically incorrect salary is the price Bovis pays for a much-needed turnaround.
Evergrande’s buyback blitz raises new red flag 28 Apr 2017 The Chinese property developer spent over $800 mln buying back shares in the last month, pushing its free float down as low as it could go. That may help ease a planned backdoor listing in Shenzhen. It is also fresh evidence of Evergrande's financial aggression.
Online retailers betray limits of the internet 18 Apr 2017 Websites like Amazon and furniture seller Made.com are opening physical showrooms so punters can look before they buy online. Being footloose remains better than having old retail’s cost bases. But the new entrants wouldn’t be hiking their own expenses if they didn’t have to.
Life Down Under is good – maybe too good 11 Apr 2017 Australia is enjoying its 26th recession-free year, thanks to insatiable demand from China. Yet household debts have soared and housing markets are overheating. Taming a runaway property market without nasty accidents would make the economic achievement even more impressive.
Bovis Homes is a challenging fixer-upper 5 Apr 2017 The UK builder rejected a proposed merger with Galliford Try and instead hired the bidder’s former CEO to fix the business. Bovis has visibly lower returns and profitability than rivals. It’s not, though, a good time for the kind of cost cuts and land selloff that may be needed.
Britain sells mortgages, buys small Brexit hedge 31 Mar 2017 Selling 11.8 billion pounds of former Bradford & Bingley mortgages to Blackstone and Prudential will cut the UK’s national debt without leaving a loss. The buyers are showing confidence in the UK economy. The seller is shoring itself up in case such confidence proves misplaced.
Bovis Homes suitors have good reasons to pitch low 13 Mar 2017 The UK homebuilder has attracted interest from two peers. The rival premiums of 5 pct and 7 pct appear underwhelming. But a takeover would be a quick fix for investors’ worries about management and building standards, and there are few justifications for a much sweeter offer.
Foxtons shines light on London’s squeezed middle 8 Mar 2017 The London-centric estate agent is a good guide to the capital’s property market since the vote to leave the EU. Things look toughest in the affluent middle, and city centre. With its shares below their IPO price, Foxtons is suffering for hitching its wagon to the metropolis.
Australia stares down its troublesome twins 8 Mar 2017 The central bank is on hold. But present inaction brushes off future uncertainty. Stubbornly low inflation argues for even lower interest rates, while a bubbly housing market cries out for tighter policy. At least rising U.S. rates should put helpful downward pressure on the currency.
Masayoshi Son could make easy work of $100 bln job 27 Feb 2017 His SoftBank may plunk $4 bln into office-space upstart WeWork. Son blanched at two earlier opportunities to invest at valuations lower than the $20 bln now on offer. One big difference is the Vision mega-fund. Perspectives can change when other people's money gets in the mix.