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WeWork rolls out revenue-sharing model in Asia; S$1.1B en bloc sale relaunched

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WeWork rolls out revenue-sharing model in Asia; S$1.1B en bloc sale relaunched

* New York-based coworking giant WeWork Cos. Inc. is rolling out a new revenue-sharing arrangement with landlords in Asia, Mingtiandi reported. The new approach involves the creation of a facility to be operated by a joint venture, or reduced upfront payments by WeWork in exchange for a slice of the income from the location.

WeWork is establishing a new center at the Equatorial Plaza in Kuala Lumpur with local developer Daman Land in the first quarter, the first partnership in Malaysia under the "participating lease" strategy.

* The 211-unit Horizon Towers in Singapore is on the block again at a reserve price of S$1.1 billion, after its first en bloc sale in September 2018 failed to garner any bids. The tender period will close Jan. 28 at 3 p.m. local time, with the owners having until May 21 to wrap up a sale contract.

Hong Kong and China

* Kaisa Group Holdings Ltd. is reportedly in danger of losing out on its entire investment of more than 1 billion yuan in an urban redevelopment project that aims to transform a shanty town into residential dwellings in Xi'an, China, due to mounting issues with a fellow developer.

The Shenzhen-based homebuilder purchased a majority stake in the development in August 2017, but Kaisa's legal title to the project was removed later the same year.

* China Overseas Land & Investment Ltd. won the tender for an 8,560-square-meter land in Suzhou city in China's Jiangsu Province for 575 million yuan, Guandian reported. The land is zoned for commercial and serviced apartment development, and the developer will have to hold at least 50% of the commercial properties built on the site.

* Hong Kong recorded just three office deals in December 2018, the worst performance for any single month since 2008, the South China Morning Post reported. Property firm Midland IC&I said a total of 196 office transactions were recorded in 2018, a 45% year-over-year drop, with the trend expected to continue in 2019, as the China-U.S. trade war, volatile stock markets and increasing interest rates dampen buyer sentiment.

* Land transactions in Beijing dropped 40% to 168.3 billion yuan in 2018, Caijing reported, citing data from Centaline Research Institute. Land premium also saw a low of 13.7% in the year.

* The official newspaper of the Chinese Communist Party urged regional economies to cut their dependence on the property market and focus on new industry development, Reuters reported. Private research firm CIRC reported a 35% increase in total sales of China's top 100 real estate developers in 2018, but the government believes the excessive importance given by some cities to the property market potentially increased real estate prices.

Singapore

* Experts do not believe private home prices in 2019 will match the approximately 8% uptick they achieved in 2018, as government efforts to cool the market will continue affecting the sector, Channel NewsAsia reported. International Property Advisor CEO Ku Swee Yong said aside from the property cooling measures, an increase in the three-month Singapore interbank offered rate, a primary benchmark rate used for home loans, will also affect housing prices that could turn away developers and buyers due to added cost.

India

* Anarock Property Consultants Chairman Anuj Puri believes that commercial real estate remains the best-performing asset class in the country as the residential segment faces serious headwinds due to lackluster demand and oversupply, among other issues, The Economic Times of India reported. Puri urged investors to wait until the launch of India's first REIT, backed by Blackstone Group LP, in case high prices quell their thirst for office realty.

Japan

* Tokyo-based hotel chain APA Group has acquired the 88-room Hotel Ecc Shizuoka, with an aim to convert it into its first APA hotel in the city of Shizuoka, Jutaku-Shimpo-Sha reported.

Other real estate news

* A JLL report revealed that occupancy costs in Hong Kong's Central are 60% higher than in New York's Midtown, and about 75% higher than in London's West End, firmly establishing its reputation as the most expensive office market in the world. Meanwhile, office costs in Taipei and Seoul are substantially lower than the occupancy costs of US$338 per square foot found in Hong Kong.

* Singapore's Cromwell European REIT purchased a pair of office properties in the Netherlands for €127.6 million.

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.

Rollen Catorce, Emily Lai and Jaekwon Lim contributed to this report.