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Carlyle plans China real estate spinoff; MTR invites bids for HK$20B site

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Carlyle plans China real estate spinoff; MTR invites bids for HK$20B site

* Carlyle Group LP intends to spin off its China-focused real estate team by 2018-end. The plan will reportedly be followed with investments in the Asian real estate market through the private equity firm's Carlyle Asia Partners V LP buyout fund, which will focus on operators of hotels or logistics businesses.

* MTR Corp. Ltd. commenced an expression of interest process for the second-phase development of the project atop the Ho Man Tin MTR Station in Hong Kong. The project is valued at approximately HK$20 billion by surveyors cited by The (Hong Kong) Standard, and it is expected to yield up to 1,000 residential units and is anticipated to be completed in 2024.

Hong Kong and China

* Modern Land (China) Co. Ltd.'s Su Kun Green (Beijing) Real Estate Co. Ltd. subsidiary pledged an estimated 477.7 million yuan to jointly develop a 38,371.4-square-meter residential site in Suzhou, China.

* The First Group acquired the nine-story Kwong Loong Tai Building in Cheung Sha Wan, Hong Kong, for HK$1.25 billion, The Standard reported. The company expects to spend an aggregate HK$2.6 billion on the industrial building, as it looks to transform it into an A-grade office property by 2022.

* The respective contracted sales of Greenland Hong Kong Holdings Ltd. and China SCE Group Holdings Ltd. grew year over year in August by 88% to about 3.32 billion yuan and 74% to nearly 4.02 billion yuan. Hopson Development Holdings Ltd.'s contracted sales for the month was about 2.29 billion yuan.

* Minmetals Land Ltd. is planning to issue US$300.0 million in 6.40% senior guaranteed bonds due Sept. 18, 2021. The company said proceeds from the offering will be used to refinance its existing debt, according to a release.

* Home prices in China is expected to climb 5% in 2018 and 3.3.% in the first half of 2019, a Reuters survey of 16 property analysts and economists found. Amid the anticipated price hike, property investment in the country is predicted to rise 8% as developers look to rebuild their housing inventories.

* Jake Avayou, a Moody's Investors Service vice president and senior covenant officer, predicts that the overall covenant quality score for the high-yield bonds of property developers in China will likely reach its weakest annual level by 2018-end.

In the 12 months to June 30, the overall score for the high-yield bonds of Chinese developers decreased to 3.30 (moderate) from the 2.74 (moderate) that Moody's recorded in its last report on the topic, which covered 2011 to May 30, 2015.

* The Shanghai government is carrying out individual inspections with different long-term rental companies to prevent cutthroat competition, over-expansion and rent embezzlement. The government said the market supply and demand for rental apartments in the city is at equilibrium with stabilizing rents.

Australia and New Zealand

* Blackstone Group LP's A$3.3 billion takeover of Investa Office Fund is progressing, but more roadblocks are reportedly on the horizon.

Investa Property Group has filed a court case to force the fund's responsible entity to consider the rival bid from Oxford Properties Group, The Australian reported, while Investa Commercial Property Fund's support of the Blackstone bid is on shaky ground, The Australian Financial Review reported, citing unnamed sources.

* A quarterly industry report from Zenith Investment Partners, MSCI, the Property Funds Association and the Property Council of Australia found that unlisted property funds outperformed both listed real estate investment trusts and direct property investments in the 12 months to June 30 by delivering 18.7% in returns, the AFR reported. During the reporting period, general equities and Australian REITs respectively recorded returns of 12.9% and 9.7%.

* In New Zealand, Australian residential property developer AVJennings Ltd. is buying the Hall Farm greenfield development site in Auckland's Orewa suburb for an undisclosed amount using funds from its A$300 million club banking facility. Development of the property that could yield approximately 580 lots is due to commence in 2018, with settlements slated to start in fiscal 2020.

Singapore

* OUE Commercial REIT agreed to spend an estimated S$955.9 million for the purchase of the OUE Downtown integrated development from Alkas Realty Pte. Ltd. The REIT is planning to partially finance all expenses related to the transaction using the roughly S$587.5 million of gross proceeds from a planned issuance of 1,288,438,981 new OUE units.

India

*Air India Ltd. is planning to sell its former head office in Mumbai for 20.00 billion rupees to state-run Jawaharlal Nehru Port Trust at the end of March 2019, Mint (New Delhi) reported, citing a senior airline official. Proceeds from the sale of the 23-story building will be use to trim the airline's debt.

* Apollo Global Management LLC signed a deal to be the new fund manager and general partner for JPMorgan Asset Management's US$300 million real estate portfolio in India, Mint reported, citing two people familiar with the development. Apollo is introducing four people into JPMorgan's India team as part of the agreement.

Japan

* Fukuoka-based Miyoshi Real Estate Co. Ltd. signed a partnership agreement with Airbnb Inc. to start a vacation rental business targeting foreign inbound tourists, Tokyo's The Nikkei reported. The company will open a 38-room hotel near Hakata Station in October as its first Airbnb property.

* Mitsubishi UFJ Financial Group Inc. will set up a 60/40 real estate development joint venture with Mitsubishi Estate Co. Ltd. in October to redevelop former bank branch sites, The Nikkei reported. The trend of bank branch consolidation in Japan is opening up spaces in prime urban locations.

* Mitsui Fudosan Co. Ltd. and Mitsui Fudosan Hotel Management Co. Ltd. will open the 264-room Mitsui Garden Hotel Nihonbashi Premier in Chuo-ku, Tokyo, Sept. 13, as the latest addition to the Mitsui hotel chain, Jutaku-Shimpo-Sha reported.

The Daily Dose Asia-Pacific, Real Estate edition is updated by 6:30 a.m. Hong Kong time. Some external links may require a subscription. Links are current as of publication time, and we are not responsible if those links are unavailable later.

Cam Nones, Emily Lai and Jaekwon Lim contributed to this report.