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HNA co-founder dies amid debt woes; property taxes hit Hong Kong, Singapore

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HNA co-founder dies amid debt woes; property taxes hit Hong Kong, Singapore

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.

HNA in the headlines

* In the middle of its mounting debt problems, HNA Group Co. Ltd. Chairman Wang Jian died from an accident while on a business trip in France, the company said July 4. Wang's fellow co-founder, Chen Feng, assumed the chairmanship role two days after Wang's death.

* The Chinese conglomerate is now believed to be planning to sell a house in Hong Kong's elite Victoria Peak neighborhood to raise funds, in a bid to assuage its liquidity issues. House 6 at the luxury Twelve Peaks estate is expected to sell for about HK$550 million after it failed to find a new owner a few months ago.

* Still busy with divestments, a subsidiary of the debt-laden conglomerate is looking at S$730.0 million from the sale of five warehouses in Singapore to local real estate investment trust Mapletree Logistics Trust.

* On the buy side, HNA is not pushing through with its A$400 million plan to buy the refrigerated logistics business of Australia's largest car dealer. Automotive Holdings Group Ltd. attributed the terminated agreement to HNA's financial woes and the duo's failure to get the green light from Australia's Foreign Investment Review Board.

Real estate and taxes

* Hong Kong Chief Executive Carrie Lam unveiled six new housing initiatives recently, one of which is the introduction of vacancy taxes on private residential units. Under the new tax, a 12-month clock starts ticking once a developer secures the occupation permit for a project. If the developer is not able to sell or lease out all of the units at the development, a fee equivalent to 200% of the unsold homes' rateable value will be imposed.

JLL said the policy might cause developers to hold back in bidding sky-high numbers for land sales in the city, while Moody's expects its rated developers in Hong Kong to weather the obstacles.

* In a move that surprised many in the republic, Singapore is raising additional buyer's stamp duties for individual buyers by 5 percentage points, among other measures, in response to signs of a price recovery in its private residential property sector.

Several reports from Bloomberg News, citing market watchers, described the policies as too harsh, with DBS analysts reported to have said the move will likely put a stop to the city state's red-hot en-bloc market. JLL echoes the sentiment and added that, on the other hand, owners of strata-offices and shophouses approved for commercial use will likely see benefits from the higher stamp duties as investors could flock to pump capital in those sectors not affected by the firmer stamp duties.

Shopping the globe

* A South Korean conglomerate is close to signing a sale-and-leaseback deal to buy the 840,000-square-foot Goldman Sachs building in London for about £1.2 billion. Hanwha Corp. is reportedly in pole against a Hong Kong-based investor and two European investors.

* Hines Global REIT Inc., the U.S.-based REIT owned by Hines, placed on the market four office properties in Australia, expecting at least A$650 million in proceeds from the sale.

* Two Singapore-listed companies made deals abroad this week. Frasers Property Ltd., aside from buying a logistics portfolio in Germany, also completed transactions that led to the establishment of Frasers Property Europe, while Cromwell European REIT acquired for €98 million a mixed-use site in Paris.

On the dotted line

* Six Asian institutional and private investors agreed to a £2.1 billion deal that gives them an almost quarter-stake in a London-based data center developer. Strategic IDC Ltd.'s target, Global Switch Ltd., is also planning an IPO, the details of which are yet to be determined.

* Hometown America Corp. made changes early this week to its approach in taking over Australian manufactured homes developer Gateway Lifestyle Group. Instead of pursuing a scheme of arrangement, it plans to launch an off-market cash takeover, and it has also added a provision in which it will increase its A$2.35-per-security offer for the target if an implementation agreement is signed.

Hometown's rival for Gateway, Brookfield Property Group, is yet to make a countermove, as of July 6.

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As of July 5, US$1 was equivalent to S$1.36 and 68.87 rupees.