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Asian developers' debt rising, BIS says; GPT tower in A$6B Sydney scheme OK'd

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Asian developers' debt rising, BIS says; GPT tower in A$6B Sydney scheme OK'd

* Debt incurred by property developers in the Asian markets of China, Hong Kong, Indonesia, Malaysia, Singapore and Thailand exhibited speedy growth over 2006-2016, according to a study included in the latest quarterly review published by the Bank for International Settlements, or BIS.

High levels of property-linked debts have played a role in setting off financial crises in recent memory, raising concerns over developers' vulnerabilities to a potential market correction, the report said.

* Australia-listed diversified developer GPT Group secured approval to build a A$230 million office tower in the Sydney suburb of Parramatta, The Australian Financial Review reported. The approved project is the company's contribution to the A$6 billion redevelopment of the Sydney suburb, which also includes undertakings by Dexus, Charter Hall Group and Walker Corp.

Hong Kong and China

* Colour Life Services Group Co. Ltd. forecasts that for the year ended Dec. 31, 2017, it will see a year-on-year increase of more than 50% in its profit attributable to the company's shareholders.

* A C&D International Investment Group Ltd. subsidiary is paying nearly 1.25 billion yuan for the rights to use a roughly 47,364.13-square-meter land plot in Zhuhai, China. A deal to formalize the site acquisition is scheduled to be signed March 13.

* The contracted sales of Chinese diversified developers Greenland Hong Kong Holdings Ltd. and Powerlong Real Estate Holdings Ltd. for the first two months of 2018 increased 14% and 58.2% year over year to an estimated 3.27 billion yuan and 4.02 billion yuan, respectively.

Southeast Asia

* In the Philippines, Ayala Land Inc. confirmed reports that it received approval from the Philippine Competition Commission for its plan to buy 290 hectares of land in San Miguel, Tarlac City, from sugar manufacturer Central Azucarera de Tarlac for an undisclosed amount. It is understood that the reported property buy was still covered by the watchdog's mandate to review transactions that reach the 1 billion-Philippine-peso threshold, which was recently increased to at least 2 billion pesos.

* Construction company Koh Brothers Group Ltd.'s KBD Ventures Pte. Ltd. subsidiary secured the rights to redevelop the roughly 4,427.7-square-meter Toho Mansion freehold residential property at Holland Road, Singapore, after it offered to pay an unnamed seller S$120.4 million for the site's tender.

* Fragrance Group Ltd.'s Fragrance Treasures Pte. Ltd. entered into agreements to buy for S$220.0 million the Eunos Mansion residential property in Singapore, which was marketed via en bloc tender in January with a S$218 million price tag.

* Japan-based specialist mall developer AEON Mall Co. Ltd. said construction on its fifth shopping center project in Vietnam will commence March 11, with an opening targeted by 2019. The roughly four-level AEON Mall Ha Dong development in Hanoi is designed to feature an estimated 150,000 square meters of floor area, 74,000 square meters of gross leasable area and retail spaces for approximately 200 specialty stores.

Australia

* Scentre Group CEO Peter Allen told the AFR that over time, retailers in its malls seeking rent relief will be replaced by tenants who are willing to pay the amount that the landlord deems fair for the value of the rented space. Allen was quoted by the paper as saying that retailers oftentimes "want to try to take advantage of the situation to try to get cheaper rents."

* Dexus broke ground on the development of its site at 180 Flinders St. in Melbourne, which will be anchored by Chinese-backed construction and infrastructure house John Holland Group, The Australian reported. The Melbourne project will feature 20,100 square meters of space for office and retail uses, according to the paper.

Japan

* A syndicate of banks agreed to provide a combined ¥11.80 billion loan to Nippon Prologis REIT Inc. for the industrial real estate investment trust's plan to repay certain indebtedness.

* The city government of Kobe in the Hyogo Prefecture will start the redevelopment of the Waterfront – Shinko West District Area in south central Kobe in fiscal year 2018. Five companies including Sumitomo Realty & Development Co. Ltd. have decided to build aquariums, commercial facilities, offices and housing units on the 3.4-hectare site, the Kobe (Japan) Shimbun reported.

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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. Articles and links are correct as of publication time.

Cam Nones and John Chan contributed to this report.

As of March 9, US$1 was equivalent to 6.33 yuan, ¥106.93, 51.99 Philippine pesos and S$1.32.