URA Expected to Incur $192 Million Loss from Sale of Kowloon Project Among Other Asia Real Estate News Highlights

Significant Loss for URA in Kowloon Project Sale

The Hong Kong Urban Renewal Authority recently took a considerable financial loss of approximately $192 million on the sale of a development project in the Kai Tak area of Kowloon. This sale is part of various significant news pieces today, including the continuous decline of China’s new home prices and prominent international investors vying for a stake in a logistics portfolio in India.

Details of URA’s Kowloon Project Sale

Last week, the Urban Renewal Authority sold the Shing Tak Street-Ma Tau Chung Road project for a bid totaling HK$1.9 billion, a figure that is substantially lower than the original buying price, leading to a near HK$1.5 billion loss. This sale was concluded during a downturn in the property market, estimated to have declined by roughly 20 percent since the property’s initial acquisition in August 2021.

Continuous Drop in China’s New Home Prices

In China, the prices for new homes have fallen for the fifth consecutive month, with a reported 0.3 percent decrease month-to-month in November. This ongoing price drop parallels the downtrend in market confidence and investment in the real estate industry.

Investors Eying CPPIB Stake in IndoSpace Portfolio

Several prestigious global investors, including Mubadala and Dutch pension fund APG, have shown interest in purchasing a 50 percent stake from the CPPIB in IndoSpace Core. Other participants in the bidding include Oxford Properties and Ivanhoe Cambridge, indicating a highly competitive process for the approximately $700 million deal.

Potential Offshore Bond Default by China South City

Warning signs have emerged from China South City Holdings Ltd., indicating potential default on offshore bond payments due to insufficient funding. The company is struggling to pay the interest on its 9 percent notes, with $235 million outstanding, as it faces a harsh operating environment within the real estate sector.

Strong Sales Performance by SHKP in New Territories

Sun Hung Kai Properties referenced a successful sale over a recent weekend, where it sold around 86 percent of its Yoho West housing project units. The sales performance was buoyed by sizable discounts and an encouraging interest rate outlook, which drew strong buyer interest.

Bond Repurchase by Cromwell European REIT

Cromwell European REIT has recently repurchased €50 million worth of its bonds, reducing the overall outstanding amount and impacting the market’s future financing plans.

Lease Restructuring for Lendlease’s Milan Property

Lendlease Global Commercial REIT has restructured the lease of its property, Sky Complex in Milan, resulting in numerous advantages such as reduced tenant risk and increased rent revenue for certain buildings within the property.

Upcoming Hong Kong Bank Loan Maturities Raise Concerns

Hong Kong bankers are caught in a tense position as a significant amount of bank loans acquired by property developers is set to mature next year. The amount nearing due is estimated at HK$200 billion, with only a small portion presently refinanced, leading to concerns over future financial stability.

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