ESR Sells China Logistics Property Stake for $350M and More Asia Real Estate Headlines

ESR Sells China Logistics Property Stake for $350M and More Asia Real Estate Headlines

ESR Ichikawa

ESR Ichikawa is the developer’s largest operating facility in Japan.

In today’s roundup of regional headlines, warehouse specialist ESR exits its investment in China Logistics Property and obtains a green loan, while home-sharing giant Airbnb announces plans to scrap its China listings.

ESR Sells China Logistics Property Stake for $350M

Hong Kong-listed ESR has sold its 18.16 percent stake in China Logistics Property Holdings for an expected HK$2.7 billion ($350 million) in gross proceeds and a HK$1.04 billion total gain on investment.

ESR became a shareholder of CNLP in 2018, and its stake in the company was 18.16 percent as of 20 May, with an average blended cost per share of HK$2.691. JD Logistics, a unit of China’s, which is a major investor in ESR, bought out China Logistics Property last year in a $2.1 billion deal. Read more>>

ESR Obtains S$300M Sustainability-Linked Loan

ESR announced Tuesday that it had secured a S$300 million ($218.3 million) sustainability-linked loan, marking its fourth similar borrowing within the past six months.

The five-year unsecured, committed corporate facility comes with an option to be upsized to S$500 million, according to a news release. Read more>>

Airbnb to Shut China Domestic Business From 30 July

Vacation rental firm Airbnb said Tuesday that it would shut down all listings and experiences in mainland China from 30 July, joining a long list of Western internet platforms opting out of the China market.

The company made the announcement in a letter posted to its official WeChat account addressed to its Chinese users without elaborating on the reasons behind the decision. The San Francisco-based company said Chinese users would still be allowed to book listings and experiences abroad. Read more>>

Jinke Property Seeks Payment Extension on $187.5M in Bonds

Jinke Property Group is seeking to extend the payment deadline of its RMB 1.25 billion ($187.5 million) onshore bond to avert a default, as the Chinese government’s policy easing on the real estate sector was too late to have any material impact on its overall business.

The developer asked creditors to extend the payment date on its RMB 1.25 billion principal and the 5 percent coupon after investors exercised their put option, which requires Jinke to pay by 28 May. The vast majority of the bondholders, with RMB 1.24 billion of the face value of the RMB 1.25 billion issue, exercised the put option. Read more>>

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Jiayuan Boss Forced to Sell Shares After Margin Call

Chinese developer Jiayuan International said 1.35 million shares held by Mingyuan Group Investment, one of its controlling shareholders, were sold in the open market by a securities company through a margin securities account.

Mingyuan is controlled by Jiayuan chairman Shum Tin-ching, and the forced sale was due to a plunge in the value of the account’s securities and failure in meeting the margin call, Jiayuan said in a filing. Shum now holds 74.69 percent of the shares in the company. Read more>>

Goldman Sachs Unveils Bearish Outlook for China’s Property Sector

Chinese real estate defaults have increased so much that Goldman Sachs analysts have shifted to their worst-case scenario for the riskiest part of the market.

Twenty-two China high-yield bond issuers, all related to the property sector, have either defaulted on their US dollar-denominated bonds or deferred repayment with bond exchanges since the start of this year, analysts Kenneth Ho and Chakki Ting wrote in a report Friday. Read more>>

Economists Predict Further Slide for China’s Property Market

Reuters’ survey of 13 analysts and economists conducted between 16 May and 23 May revealed a bleak forecast for China’s property market, with expectations that prices will remain flat and that sales and investment will fall further, while tighter and widespread COVID-19 curbs weigh on still fragile demand despite more policy easing.

The property market, a pillar of the world’s second-largest economy, was weakened by a government clampdown on excessive borrowing by developers last year. Read more>>

Border Reopenings Give Hope to Luxury Home Builders in Hong Kong

The market for luxury homes in Hong Kong is expected to brighten as developers and property investors look past the slump in the opening months of this year. Subsiding COVID-19 impact and hopes for the reopening of borders are behind the new-found optimism.

Transaction volume of luxury homes could jump by 30 to 40 percent in the second half from the first half, said John Fong, chief district sales director at Midland Realty. First-quarter sales of homes priced above HK$50 million ($6.4 million) fell by a sequential 36.3 percent, the worst since late 2020, because of the fifth wave of the pandemic, stock market losses and fears over higher borrowing costs. Read more>>

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