SHENZHEN (BLOOMBERG) - China Evergrande Group plans to let consumers and staff bid on discounted properties this month to repay them for billions in overdue investment products as the embattled developer seeks to preserve cash, according to people familiar with the matter. The company will organise an online property event by Sept 30 for investors who opt for discounted real estate in lieu of cash, said two employees who were briefed on an internal call on Thursday (Sept 16) and asked not to be identified. Evergrande did not respond to a request for comment on the plan. The world's most-indebted property developer is pushing the discounted real estate as the preferred of three options for angry investors seeking repayments. The high-yield products paying as much as 13 per cent a year have become a lightning rod for cash-strapped Evergrande, with investors and staff protesting losses and delayed payments from investments that were marketed as safe. Demonstrations that are breaking out across China could sway any bailout decisions by the government, which places a high priority on social stability. More than 70,000 people bought the products, including many Evergrande employees, Bloomberg reported earlier, citing an executive of Evergrande's wealth division. About 40 billion yuan (S$8.3 billion) of them are now due, Caixin reported. In an effort to steer investors away from cash repayments, the company is pushing steep discounts on property assets. Investors can invest in residential housing units at a 28 per cent discount, offices at a 46 per cent discount and stores and parking units at 52 per cent. Discounted rates cannot be lower than price floors designated by local governments. The property discounts are a voluntary repayment option, according to the briefing. The details of the new plan, which was first floated on Monday, appear to favor large holders. Investors can get one token to bid on their ideal property for every 500,000 yuan invested, according to the people briefed. The more tokens, the better the chances of grabbing a preferred unit, the people were told. Under the cash option, investors can choose to be repaid 10 per cent of their principal and interest every quarter, meaning they would be fully repaid in two and a half years, Bloomberg reported earlier. Investors in the products can also opt for payment discounts on residential units they have already purchased, according to the revised plan unveiled Monday. Evergrande has also settled repayment with some corporate partners by offering its properties. Shenzhen World Union Group, which sells new homes for the developer, said on Friday it has agreed with Evergrande on using properties to offset a fifth of unpaid dues as at Aug 31. Skshu Paint, one of Evergrande's paint contractors, agreed early this month to receive three unfinished projects, which are scheduled to be completed as late as 2024. It has started to cash out some of these units by selling them, it said earlier.
New private home sales fell nearly 24 per cent in August after hitting a six-month high in July, as developers pared back new launches and some buyers held off due to the Hungry Ghost month and Covid-19 phase two (heightened alert) restrictions. But overall, new home sales remained relatively strong despite the month-on-month drop to 1,215 units last month from 1,591 units in July. August's take-up was still above the seven-month average sales of 1,172 units between January and July 2021, noted Mr Wong Xian Yang, head of research, Singapore, at Cushman & Wakefield. Compared with last year, sales were just 3.4 per cent shy of the 1,258 units moved in August 2020. "Instead of slowing down during the typically quiet Hungry Ghost month, new private home sales have been robust during both August this year and last year, " he said. Sales volumes that exceed 1,000 units a month should be seen as robust, given that developers sold less than 12,000 units annually in the past seven years, ERA Realty head of research and consultancy Nicholas Mak said. "Over the past seven years, developers sold an average of 738 private housing units monthly, excluding EC units, " he noted. Including executive condominiums (ECs), new home sales fell 24.3 per cent to 1,322 units last month from 1,746 units in July. Compared with a year ago, new home sales slipped 1 per cent, according to Urban Redevelopment Authority (URA) data released on Wednesday (Sept 15). Only 836 new homes were put on the market last month, down 24.3 per cent from 1,104 units in July and a 47.2 per cent plunge from 1,582 units a year ago. The bulk of the units launched for sale last month was from new launches, The Watergardens at Canberra (300 units) and Klimt Cairnhill (138 units), as well as existing projects - Fourth Avenue Residences and The Florence Residences. Together, these projects accounted for 77 per cent of the total units launched. The top seller was The Watergardens at Canberra, which sold nearly 60 per cent or 267 of its 448 units at a median price of $1,469 per square foot (psf), Mr Wong said. "Buyers were attracted to its competitive pricing, and close proximity to the Canberra MRT station and amenities like Sembawang Shopping Centre and Canberra Plaza, " said Mr Ong Teck Hui, senior director of research & consultancy at JLL. This was followed by Normanton Park with 131 units sold at a median price of $1,828 psf. Other best-selling condos in the suburbs and city fringes included Midwood, OLA, Treasure at Tampines, Dairy Farm Residences, and Parc Clematis. "Buyers felt more compelled to enter the market now due to news of anticipated rising prices for future project launches - fuelled by high land bid prices at recent land tenders and as well as increasing construction costs, " Mr Ismail Gafoor, chief executive of PropNex Realty said. The suburbs, or outside central region (OCR), accounted for the majority of sales at 59 per cent, or 720 transactions, due to demand for suburban condominiums from HDB upgraders and new families, Mr Leonard Tay, head of research, Knight Frank Singapore, said. The highest per square foot price recorded in the suburbs went to a 66 square metre freehold non-landed new private home at The Lilium, which sold for $1.5 million or $2,139 psf. In terms of price quantum, the most expensive mass-market home sold last month was a 201 sq m unit at Parc Clematis for $3.063 million, followed by a 159 sq m unit at the same project for $2.798 million, said OrangeTee & Tie's senior vice-president of research and analytics Christine Sun. The highest per square foot price recorded in the suburbs went to a 66 sq m freehold non-landed new private home at The Lilium. City fringe projects made up 28.2 per cent of total sales last month. Around 75 per cent of the total developer sales in August were priced lower than $2,000 psf, based on caveats registered, Mr Wong said. Developers are likely to step up new project launches after the seventh lunar month, analysts say. These include Bartley Vue and Jervois Mansion later this month. More launches are lined up in the last quarter of 2021 - the 696-unit CanningHill Piers at River Valley Road, as well as Perfect Ten, Amber Sea, Belgravia Ace, Cairnhill 16, Mori and The Commodore, said Huttons Asia.
Watten Estate Condominium in Shelford Road has been put up for collective sale via tender with a minimum price of $500 million, said marketing agent JLL. Spanning 220,241 sq ft, the freehold elevated site is zoned residential with a gross plot ratio of 1.4 and an allowable height of up to five storeys. At the minimum price, this amounts to about $1,622 per sq ft per plot ratio (psf ppr), or $1,570 psf ppr after factoring in an additional 8 per cent bonus gross floor area and the corresponding development charge. The property comprises 104 units of townhouses and apartments built around 1983. According to JLL, it can be redeveloped into 286 units based on the mandatory minimum average size of 100 sq m. The condominium is about 650m away from Tan Kah Kee MRT station. In its vicinity are Coronation Shopping Plaza, King's Arcade Shopping Centre, Crown Centre, Serene Centre, Cluny Court and Adam Road Food Centre. JLL executive director Tan Hong Boon said: "With strengthening sales from new developments in the Bukit Timah precinct achieving new levels, keen competition from developers to bid well above the owners' minimum price are expected." The tender will close on Oct 27 at 3pm.
Construction companies working on Housing Board projects have been thrown a lifeline to help lock in prices and supplies for some raw materials, in a move by the Government to ensure that construction progress remains on track and to minimise delays for home buyers. Measures include extending the duration of steel price protection provided by HDB for a total of nine additional months so that contractors do not have to worry about the fluctuation in steel prices, said the Ministry of National Development (MND) in a written parliamentary reply on Monday (Sept 13). HDB will also provide additional supplies of concrete materials to contractors for local pre-cast production, going beyond the amount that contractors had earlier opted for in their tender, said MND. This refers to cement, sand and other aggregates. Previously, steel price protection provided by HDB was for either 18 or 22 months, typically covering the duration of structural works which are now taking longer to be completed due to the Covid-19 situation. With the nine-month extension, a contractor who started structural works in January 2020 can now be protected against fluctuations in steel prices until March 2022. The HDB said in a separate statement on Wednesday that about 35 projects could benefit from this extension. Since January this year, the prices of steel have risen by about 25 per cent and those of concreting materials by 15 per cent, it noted. HDB has also received feedback from the Singapore Contractors Association that the quantities of steel ordered by contractors remain low due to the slower progress of construction works. At the same time, in the light of Malaysia's movement control order (MCO), contractors here are relocating their precast production back to Singapore or switching to the cast-in-situ method of construction. These contractors may have previously opted for a smaller quantity of concreting materials from HDB, given that their precasters were overseas, HDB noted. But they may now require more materials, which the HDB will provide them with and at the same price committed in the tender. For contractors who wish to relocate some of their precast production back to Singapore, HDB will assist them in their application for land under a temporary occupation licence for the production and storage of the precast components. Contractors will be able to apply for additional supplies from October 2021. The move comes after the main contractors of five Build-To-Order (BTO) projects went bust last month, which caused around 2,900 buyers to face long delays for their homes. The affected projects are Sky Vista @ Bukit Batok, Senja Heights and Senja Ridges in Bukit Panjang, Marsiling Grove in Woodlands and West Coast Parkview in Clementi. The five projects are at various stages of completion, with the two Bukit Panjang projects near completion, said MND. The main contractors, Greatearth Corporation and Greatearth Construction, along with three other related companies, are currently in the process of liquidation. The construction industry has been one of the sectors worst hit by the Covid-19 pandemic. Construction costs have risen, with increased foreign manpower cost due to tightened border measures and increased raw materials costs. Companies have also racked up additional costs to adhere to safe management measures that are meant to curb the transmission of Covid-19. On Monday, MND said HDB is working with Greatearth and their provisional liquidator PricewaterhouseCoopers to bring onboard new contractors to take over and complete the five BTO projects as soon as possible. Discussions are ongoing for the potential new main contractors and existing subcontractors to work together. "This will allow affected subcontractors the opportunity to work out a suitable arrangement to remain on the projects and complete the remaining works. It will also minimise the extent of delays for flat buyers, " said MND. One of the affected projects, West Coast Parkview in Clementi, under construction on Sept 3,2021. Just before mid-August, on the feedback from a project consultant, HDB had checked with Greatearth and was informed that they had run into financial difficulties and were exploring options to continue with the projects. Slightly more than a week later, Greatearth informed HDB that they were unable to complete the five BTO projects, despite the government assistance provided to all construction firms over the past year. Prior to this, work at the sites had been progressing satisfactorily, and there were no signs of work slow-down, said MND. HDB had explored possible options to resolve Greatearth's challenges, such as providing advance payments to allow them to continue with the projects. However, Greatearth did not have the financial ability to continue operations and made the decision to undergo liquidation, said MND. Home buyers of the five affected BTO projects have not yet been informed of their revised completion date. HDB said buyers will be informed when the replacement contractors have been appointed and the construction schedule worked out. In June last year, a $1.36 billion construction support package was announced to help construction companies co-fund some of the extra costs they have to incur to comply with safe management measures at the worksites. Under the Covid-19 (Temporary Measures) Bill, construction companies can also get reprieve from legal and enforcement action for their building and supply contracts, although the relief period is set to end at the end of this month. HDB said on Wednesday that it has been releasing advance payments to contractors and has exercised flexibility in recovering the advance payments to help ease cash flow. As at August, a total of $170 million cash advances has been disbursed to 36 contractors for 74 residential projects under construction, said HDB. HDB has also helped co-share the increase in non-manpower related operating expenses such as the rental of equipment and site maintenance costs, as well as co-share the increase in foreign manpower salary costs. Given the severe strain that the construction industry is going through, HDB said it will "go some way" to help contractors deal with the challenges and stand ready to provide more support where necessary.
Rental demand for both Housing Board and condominium units rebounded last month after tenants returned to the market as Covid-19 viewing restrictions eased. Flash data from real estate portal SRX on Wednesday (Sept 15) showed that the rental volume for private apartments rose 6.6 per cent month on month in August to 4,907 units. The number of HDB flats leased increased by 6 per cent to 1,842 over the same period. This comes after a decline in rental volumes for two straight months for both private apartments and HDB flats. Year on year, rental volumes were higher by 2.1 per cent for private apartments and 5.7 per cent for HDB apartments. Rents for private apartments last month were relatively unchanged, inching down 0.08 per cent from July, while HDB rents saw a small increase of 0.3 per cent. This marks the 14th consecutive month HDB rents have climbed, while, before last month, condo rents had risen for seven straight months. Condo rents have gone up by 7.6 per cent since August last year, but they are still down 10.9 per cent from their peak in January 2013. Last month's HDB rents were up 8.6 per cent year on year. They are off by 7.3 per cent from their peak in August 2013. Ms Christine Sun, senior vice-president of research and analytics at real estate firm OrangeTee & Tie, said the rise in demand followed the easing of viewing restrictions from a cap of two distinct visitors per household per day to five after Aug 10. Domestic demand seems to be propping up the leasing market, said Ms Sun. "We have observed more locals renting especially HDB upgraders who have recently sold their homes. "Others leased temporarily as the construction of their new homes have been delayed. Hence, rents of more affordable housing units like the private homes in the outside of central region and HDB flats continued to rise last month." She added that there were more tenants who were students or permanent residents who have just returned from overseas. "When our border controls ease further, we may expect rental demand to rise further, " she said. Huttons chief executive Mark Yip said it was unlikely there would be a boost to condo rental demand in the short term with the country's endemic road map on pause for now. He added: "The HDB rental market saw sustained growth in August." "Some single professionals are choosing to rent so as to have their own space while working from home, resulting in an increase in demand." "However, the resident unemployment rate inched up in July 2021 and that may exert some pressure on rents in the coming months, " said Mr Yip.
China's new home prices grew at their slowest pace in eight months last month, official data showed on Wednesday (Sept 15), as a slew of measures to cool the country's red-hot property market took a toll on demand in the world's second-largest economy. Average new home prices in China's 70 major cities grew 0.2 per cent last month from a month earlier, slowing from a 0.3 per cent gain in July, according to Reuters calculations based on data released by the National Bureau of Statistics (NBS). Compared with a year earlier, China's new home prices grew 4.2 per cent last month, down from a 4.6 per cent increase in July. The authorities have stepped up efforts to contain home prices and limit leverage in the property market this year, introducing measures such as caps on property developers' debt ratio and limits on banks' lending to the sector.
Hongkong Land Holdings, the biggest landlord in the heart of the Asian financial hub, signed a lease with a crypto asset firm for the first time as the century-old company moves to embrace the emerging sector. Hong Kong-based HashKey Group will take up a floor in Three Exchange Square owned by Hongkong Land, the real estate firm said in a statement on Wednesday (Sept 15). The lease represents an evolution of the company's portfolio in the Central district that brings together traditional financial institutions with blockchain and virtual asset firms as demand for space from foreign banks declines amid the coronavirus pandemic. "The SFC's recent decision to regulate digital asset exchanges in Hong Kong gives us confidence that this new asset class has a regulatory framework, and therefore a future within the finance industry, " said Mr Neil Anderson, director and head of office, commercial property at Hongkong Land, referring to the city's finance regulator, the Securities and Futures Commission. The move will be an upgrade for HashKey, which is currently based in the Cyberport start-up business park. Australia and New Zealand Banking Group was the previous tenant of the space in Three Exchange Square. HashKey also has operations in Singapore, Tokyo and Shanghai, according to its website. "Three Exchange Square is one of the most prestigious office buildings in Hong Kong and we are glad to be moving to the center of the business community, " said HashKey executive president Michel Lee. Central, ranked as the world's most expensive office district, has long been dominated by traditional financial institutions from overseas and mainland China. However, as hybrid workplace arrangements and cost-saving measures take hold during the pandemic, demand from foreign banks has declined. Lenders, including Standard Chartered and BNP Paribas, have been reducing their office space in the finance district over the past year. The vacancy rate in Central rose to 9.6 per cent at the end of July from 5.7 per cent a year ago, according to data from Jones Lang LaSalle. Banking, asset management firms and other financial services constituted 42 per cent of Hongkong Land's office tenant profile by area as of June. Hongkong Land is relatively late in accepting crypto companies to its portfolio. CK Asset Holdings signed trading platform BitMEX in Central's Cheung Kong Center for a reported world-record rent in 2018. The real estate company expects to see more virtual asset companies expanding in the finance district. "Until recently, few of these firms had the scale to move into a prime central location but that is changing now and we are seeing an increase in inquiries from companies in the fintech space, " Mr Anderson said.
Demand for resale non-landed private homes remained robust in August, with prices climbing and more units changing hands despite the Hungry Ghost Festival when sales typically slow down. Condominium resale prices climbed 0.5 per cent month on month, albeit at a slower pace than the revised 0.9 per cent jump in July, according to flash figures from real estate portal SRX on Tuesday (Sept 14). Year on year, resale prices were up 7.9 per cent from August 2020. Month-on-month, homes in the suburbs enjoyed the biggest price increase of 0.9 per cent. Prices in central Singapore went up by 0.3 per cent while homes in the city fringes saw prices dip 0.2 per cent. More condo units were sold for the second straight month, with an estimated 1,860 units resold in August, a 4.9 per cent increase from the 1,773 units in July. Transactions were 40.5 per cent higher than in August last year, and 79.5 per cent above the five-year average volume for the month of August. Most of the transactions were units in the suburbs, representing 60.4 per cent of total volume for the month. About 23 per cent of transactions were in the city fringes, with the remaining 16.5 per cent in the prime districts or core central region. Ms Christine Sun, senior vice-president of research and analytics at real estate firm OrangeTee & Tie, said sales remain buoyant in August as demand is outstripping supply in the suburban region. "Many upgraders, especially those who have sold their flats recently, turned to the secondary market to find replacement homes, " she said. Demand for larger living space has also picked up as more are working from home, so some are going for larger units in the resale market as these are more affordable than new units, she added. ERA Singapore head of research and consultancy Nicholas Mak noted that the strong demand and rising prices of Housing Board resale flats and the multiple delays plaguing Build-To-Order (BTO) flats likely also contributed to the healthy demand in the private resale market which provided more certainty. Huttons Asia chief executive Mark Yip made similar observations, noting that buyers who cashed out of their HDB flats likely upgraded to a more affordable option in the private resale market. The highest transacted price for a resale condo unit last month was $21.4 million at Eden Residences Capitol, a 99-year leasehold condo in Stamford Road. The unit is a 6,609 sq ft penthouse unit with five bedrooms, with the flexibility to convert a room to a study. In the city fringes, the highest transacted price was $8.2 million for a 99-year leasehold unit at Reflections at Keppel Bay in HarbourFront. In suburban areas, a seven-bedroom penthouse in the 99-year leasehold condo A Treasure Trove in Punggol sold for $3.7 million. Barring new cooling measures and further Covid-19 curbs, OrangeTee's Ms Sun expects demand for resale private homes to continue to rise in the coming months. "Based on the SRX resale price index, prices have increased 6.4 per cent year-to-date. Resale prices may increase by more than 8 per cent this year, " said Ms Sun.
Park Hotel Group has terminated its management contract for Grand Park Orchard hotel, bringing the number of hotels it manages in Singapore down to two from six hotels, The Straits Times learnt on Monday (Sept 13). In response to queries from The Straits Times, Park Hotel Group executive director Tan Shin Hui said the company "chose to terminate its management of Grand Park Orchard" earlier this month.
Buyers' interest in the property market continued with the latest Parc Greenwich executive condominium seeing brisk sales on its launch weekend. Some 65 per cent of units - 322 out of a total of 496 available - were sold at an average price of $1,200 per square foot (psf) as at Sunday (Sept 12), said developer Frasers Property Singapore. Jointly developed with CSC Land Group, the 99-year leasehold Parc Greenwich is located in Fernvale Lane in Yio Chu Kang Road and is slated to achieve temporary occupation permit in 2024. The development comprises nine residential towers of 14 storeys each. It offers a variety of unit sizes, ranging from two-bedroom to five-bedroom apartments, as well as penthouse units with high ceilings. Prices start from $895,000 for a two-bedroom unit, $1.05 million for a three-bedroom unit, $1.38 million for a four-bedroom unit, and $1.7 million for a five-bedroom unit. First-time home buyers took up 174 units out of the 322 units sold, said Frasers. Meanwhile, second-time buyers snapped up 148 units - the full 30 per cent quota of the total number of units in a development that can be allocated to second-time buyers at launch under the current regulations. This quota for second-time buyers will lift one month after the launch. Parc Greenwich is a 10-minute walk from Fernvale LRT station, and is near the North Coast Innovation Corridor stretching from Woodlands to Seletar and Punggol, including the upcoming Punggol Digital District. Ms Lorraine Shiow, acting chief operating officer of residential (Singapore) at Frasers Property Singapore, said the company is encouraged by the strong response. "Home buyers are attracted to the project's comprehensive suite of facilities as well as high-quality attributes and fittings more commonly found in top-end private condominiums, " she said, adding that the wellness-themed development also appeals to young families.