China’s latest developer rescue plumbs new depths 10 Jun 2015 Renhe’s model of turning bomb shelters into malls has run aground. Now it is buying farmers’ markets for $839 mln, to bring in enough cash to keep the lights on. The catch: it’s buying at a premium from the chairman’s wife. Shareholders might hate it, if they had an alternative.
Amazingly, Irish homebuilder float looks a hit 9 Jun 2015 Ireland may be the real estate basket case of Europe, but a Dublin-based housebuilder is planning a London float. With most of its competitors bankrupt, strong demographics driving demand and prices in the Irish capital up 22 pct last year, Cairn Homes could be on to a winner.
Supreme Court gives risky home loans a welcome mat 2 Jun 2015 The U.S. justices say second mortgages survive borrower bankruptcies – even when a first lien exceeds a property’s value. That shelters the kind of lending that helped inflate the housing bubble. Banks need incentives to offer credit carefully, not raise the roof like it’s 2006.
Edward Hadas: UK housing and the fear of greatness 29 Apr 2015 London urgently needs to be rebuilt and expanded, but none of the leading candidates in the upcoming election promises to do much about the problem. This, like costly U.S. healthcare and high European unemployment, is a rich democracy inertia trap. Affluence retards boldness.
British housing fetish has a bad global whiff 17 Apr 2015 Ruling Conservatives want to help more Britons buy their own dwellings. In global terms, UK home ownership isn’t especially high, but decreasing rentals is a foolish political objective. Making it one – especially with measures that just stoke demand – is irresponsible.
Blackstone brandishes its long-term bona fides 16 Apr 2015 Nearly eight years after going public, the buyout shop is taking a victory lap. Its shares finally trade noticeably above the IPO price, and Q1 results suggest Blackstone’s model is working. Even so, owners of the firm’s equity may prove more fickle than investors in its funds.
Wells Fargo Q1 shows appeal of GE Capital’s wares 14 Apr 2015 Lower taxes and securities gains helped the West Coast lender beat estimates. But Wells has slowing loan growth, less interest income and more unused deposits – issues regional banks will probably face, too. That makes the assets GE’s finance unit is selling look very attractive.
GE finally exorcises Jack Welch’s financial demons 10 Apr 2015 It took a near-death experience and flat-lined shares, but Jeff Immelt is ditching banking and returning GE to its industrial roots. The timing works on many levels: asset values are high and lending businesses can be funded. Immelt also keeps a step ahead of prowling activists.
Immelt’s SIFI escape route is tough to follow 10 Apr 2015 The $280 bln GE is offloading most of its finance unit and should be able to ditch the systemic tag imposed by watchdogs. That will free CEO Jeff Immelt’s remaining empire from onerous rules. Big U.S. banks might fancy similar liberty, but they are more tightly hemmed in.
GE shows way by ending wait for tax Godot 10 Apr 2015 The U.S. conglomerate is bringing home $36 bln and will pay $6 bln in taxes on it. The move helps GE deliver a capital return plan with sufficient heft to make a mark. It also should be big enough to be noticed by other companies paying a price for leaving some $2 trln overseas.
U.S. mega-mall deal features bazaar tactics 17 Mar 2015 Macerich rejected an unsolicited $22 bln takeover bid from larger rival Simon Property. The suitor’s touted 30 pct premium may really be worth less. Even so, the target’s decision to shield itself by undoing good corporate governance is the more disingenuous haggling move.
Mall king’s $22 bln bid tests its hostile nature 9 Mar 2015 A frustrated Simon Property unveiled a bear-hug offer to buy smaller rival Macerich. The top U.S. shopping center owner has used similar tactics many times before, with mixed results. The structure of the real estate industry tends to require aggression but it also can backfire.
Carlos Slim buys Spanish real estate on the cheap 5 Mar 2015 The Mexican tycoon bought a 25 pct stake in property firm Realia at a discount and is eyeing a takeover. He is also the biggest shareholder of builder FCC, which in turn owns major stakes in Realia and Cementos Portland. Slim effectively controls all three. Minorities beware.
Investor ardor for real assets may grow too fervid 4 Mar 2015 The illiquidity premium offered on assets such as real estate or infrastructure is attractive in a low-yield world. Low correlation with financial markets is a bonus. But too much money could end up chasing too few projects. It’s a recipe for mispricing risks.
Easy money undermines Canada’s property prudence 17 Feb 2015 Sound lending and sensible regulation are formidable barriers against a housing crisis. Rising prices and debt weaken defenses. The Bank of Canada warns valuations appear too high – but its most powerful protection against a bubble, interest rates, are moving the wrong way.
Li Ka-shing converts to shareholder value religion 9 Jan 2015 Asia’s richest man is splitting his empire in two: a property company, and everything else. The reshuffle should help shrink the conglomerate discount while allowing Li to leverage up in real estate. It’s an overdue recognition there is value to unlock in the $85 billion empire.
U.S. housing should thrive without Obama’s help 8 Jan 2015 The president plans to cut mortgage costs for risky borrowers. That could help on the margins but won’t change the larger picture. Home ownership among older Americans is at near-record levels, and younger buyers should gain ground soon. The government can safely step aside.
U.S. housing demand is building 26 Dec 2014 The post-crisis rebound boosted home prices 25 pct even as sales and construction lagged. Increasing household formation, job creation and easing credit look set to give the market another leg up, despite rising interest rates and the headwind of sliding affordability.
UK doesn’t look ready for a rate hike 8 Dec 2014 Bank of England research suggests the impact of rate rises on mortgage holders could be manageable. If wages and rates rebound as the BoE forecasts, that might be so. But the data is sufficiently equivocal, and the UK economy sufficiently weak, to make it not worth finding out.
Canary Wharf bid short on tactics and value 4 Dec 2014 Qatar Investment Authority and Brookfield Property have gone hostile with a raised 2.6 bln stg offer for Songbird, owner of London’s easterly finance district. Bypassing the board is not how to buy key UK infrastructure. And the 34 pct premium ignores the Wharf’s trophy status.