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Loco for Colombo; Down Under mania; cooling it down


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Loco for Colombo; Down Under mania; cooling it down

S&P Global Market Intelligence offers our top picks of Asia-Pacific real estate news stories and more published throughout the week. Please note that some entries may have links to third-party sources that may require a subscription.

Loco for Colombo

* In Sri Lanka, the Colombo Stock Exchange received a jolt April 4 with office developer RIL Property Ltd. recording an oversubscription in its 960 million-rupee IPO.

RIL said it is betting on the government's plan to further develop the Colombo metropolitan area into a central business district by 2030 to maintain healthy occupancy rates in the future. The company was established in 2009 and, aside from developing grade A offices in the Sri Lankan capital, is also the owner of a company that operates BreadTalk outlets in the country.

* Hilton Inc. signed management agreements with Melwa Hotels & Resorts Pte. Ltd. for three Hilton Hotels & Resorts and three DoubleTree by Hilton properties. The six hotels and resorts will open between 2020 and 2021, and will be built in the key tourist destinations of Kandy, Yala, Kosgoda, Nuwara-Eliya, Colombo and Negombo.

Down Under mania

* More than two years since Morgan Stanley Real Estate decided to exit its Investa Property Group business in Australia, a fund associated with the group is still exploring options.

Investa Office Fund started the week by announcing that after months of review, it will exercise an option to buy a 50% stake in the A$8.5 billion Investa management platform. The next day, long-time suitor Cromwell Property Group sweetened its offer to take the fund private, leading to IOF closing the week by saying that it will entertain both options.

IOF advised unit holders not to take any action until it gives a recommendation at a yet-to-be-determined date.

* Another heavyweight, Blackstone Group LP, made headlines Down Under this week with its planned sale of all of its retail assets for a reported A$3.5 billion. The sale, touted to be record-breaking, is believed to have the attention of local and foreign investors alike.

* The Malaysian Employees Provident Fund is making Melbourne the venue for its second overseas investment. The fund is paying A$154 million to the Malaysian company that owns Melbourne Square, OSK Holdings Bhd., in exchange for a 49% stake in the A$2.8 billion mixed-use complex.

Cooling it down

* China is master-planning a new city that will rival Shenzhen and Shanghai's positions as global financial and technology hubs in the mainland. Xiongan New Area will cover about 100 square kilometers across three counties in Beijing, Tianjin and Hebei, and will be designed to house certain functions of the government that will be rehomed from the capital, Xinhua News Agency reported.

London's Financial Times takes an in-depth look at the surprise announcement, noting how the planned transformation of the Chinese town has sparked a property frenzy.

* The Beijing municipal government banned all sales of new apartments that were built on land originally intended for commercial purposes, the South China Morning Post reported. Sales of developers including China Vanke Co. Ltd., China Evergrande Group and Longfor Properties Co. Ltd. are expected to take a hit.

* Meanwhile, the mainland's capital controls have extended beyond the border to Malaysia, with Chinese developer Country Garden Holdings Co. Ltd. forced to offer its Chinese buyers an option to pull back from contracts to buy units at the US$100 billion Forest City project. As of April 6, the developer received less than 60 cancellation requests from buyers, according to a statement cited by Reuters.

* Australia also recently took steps to cool its property market. The Reserve Bank of Australia kept the record low 1.5% official cash rate, as it believed inflation and the labor market are not strong enough to sustain a rate hike that could have helped curb a property boom in the east coast, The Australian Financial Review reported.

Australian Prudential Regulation Authority Chairman Wayne Byres, meanwhile, said in a keynote speech at an April 5 summit, that the authority decided not to lower the investor lending growth benchmark just yet to accommodate the growing number of housing units in the construction pipeline.

* The Reserve Bank of India is proposing to allow banks to invest in REITs and infrastructure investment trusts to give the markets a much-needed boost, The Economic Times of India reported.

Big-ticket deals

* Cheung Kong Property Holdings Ltd. was involved in two major deals Monday. The property arm of Li Ka-Shing's empire said it was buying a Canadian building equipment services provider for about C$2.82 billion, and later, announced that the proposal it backed to take ARA Asset Management private received court approval.

* Mercatus Co-operative Ltd. signed a deal to buy the biggest suburban mall in Singapore for a reported S$2.2 billion.

* Eco World International Bhd. debuted on the main market of Bursa Malaysia April 3 nearly two years after it announced plans to do so.

* Several joint ventures aimed at Asian market expansion were sealed, with Canada Pension Plan Investment Board locked in on India, GIC in Jakarta, Mitsubishi Estate Co. Ltd. in Malaysia and Frasers Centrepoint Ltd. in Thailand.

Blackstone's planned US$5 billion Asian real estate investment fund also received a boost, while a Chinese private equity firm plots to become bigger and a Sydney-based fund manager looks to launch a second Asia-focused forestry fund.

Featured this week on S&P Global Market Intelligence

Hires and Fires Asia-Pacific: Asia-Pacific real estate moves through April 4: S&P Global Market Intelligence presents a weekly rundown of recent significant management and board changes and personnel moves in the Asia-Pacific real estate industry.

The Property Ledger: Centuria Metropolitan closes A$26M property sale; SRE Group buys Shanghai assets: The April 5 edition of the Asia-Pacific property news recap also features a series of completed property acquisitions in Japan.

Celestyn Wong contributed to this report.