China’s Wanda raises nearly $6 billion for commercial property management unit: Sources – ET RealEstate

HONG KONG: Chinese conglomerate Dalian Wanda Group has raised nearly $6 billion for its commercial property management business ahead of its Hong Kong IPO, in one of China‘s biggest such fundraisings this year, four people with direct knowledge told Reuters.

Hong Kong-based private equity firm PAG led the fundraising, with $2.8 billion for the unit, Wanda Light Asset Commercial Management Co, said three of the sources.

PAG’s investment includes a $1.9 billion equity portion and $933 million from a syndicated loan facility, two of the sources said.

Other investors include developer Country Garden, private equity firm CITIC Capital and tech giants Tencent Holdings and billionaire Jack Ma’s Ant Group, the two sources said.

The fundraising underscores investors’ confidence in the Chinese commercial property market even as Beijing has unveiled measures over the past year to clamp down on irregularities and cool the debt-laden real estate sector.

Developer China Evergrande Group has become the highest-profile casualty of the crackdown.

Wanda Light Asset is valued at $28 billion in the pre-IPO fundraising, slightly below its target of 200 billion yuan ($31 billion), three sources said. The amount raised, however, doubled from its target of $3 billion.

PAG and CITIC Capital declined to comment. Wanda, owned by billionaire Wang Jianlin – once China’s richest person, and the other investors did not immediately respond to a request for comment.

The sources declined to be identified as the information is confidential.

The commercial property management business is considered separate and safe from China’s real estate crackdown, the sources said.

Twelve such companies have raised a total of $1.4 billion from Hong Kong IPOs in 2021, Refinitiv data showed.

Last year, Evergrande, Sunac China Holdings and Shimao Group Holdings all floated property management units.

Wanda was aiming to file for an IPO in September, Reuters reported in April, but one of the sources said the listing may not happen until early 2022, given the fundraising was agreed in the last couple of weeks.

The unit filed for an overseas IPO with the China Securities Regulatory Commission on Aug 20, the regulator’s website shows.

The unit, tasked with managing 368 Wanda Plazas plus 155 under construction, secured 3 billion yuan of investment from the government of the southern city of Zhuhai in March.



Source link

USA: In a hot market, companies compete with would-be homeowners – ET RealEstate

LOS ANGELES: Soaring home prices and rents are fueling real estate companies’ appetite for houses, adding unwelcome competition for many would-be homebuyers.

Residential real estate bought by companies or institutions hit an all-time high of 67,943 properties in the second quarter, according to Redfin, a Seattle-based online brokerage.

That’s more than a twofold increase from a year earlier, when the pandemic temporarily stymied the real estate market. It also represents 15.9% of all the properties sold in the April-June quarter, or just below the record high 16.1% share of sales in the first quarter of 2020, Redfin said.

The data, which goes back to 2000, includes all residential property types, including apartment buildings and condos. It excludes purchases by small, individual investors.

When looking at only single-family home sales, companies accounted for 16.1% of all purchases in the second quarter, Redfin said. Ten years ago, it was 8.4%.

The trend adds challenges to would-be homebuyers, especially many first-time buyers already facing stiff competition for affordable homes at a time when the inventory of properties on the market is near all-time lows and prices continue surging.

The S&P CoreLogic Case-Shiller 20-city home price index climbed a record 19.1% in June from a year ago, as too few homes are available to buy and low interest rates have enabled affluent buyers and real estate investors to pay more.

“When you have investors in a limited-supply market and they’re coming with cash, they’re able to outbid any regular homebuyer,” said Sheharyar Bokhari, senior economist at Redfin.

Real estate investors’ impact on the market for single-family homes is being particularly felt now because competition has grown so heated that homes often sell within days.

“Homes aren’t staying on the market very long,” Bokhari said. “People are getting frustrated losing bidding wars, especially if they lose to a (company) flush with cash.”

Real estate investment trusts and other companies have traditionally owned apartment buildings, but the housing bust of the mid-2000s helped usher in a wave of Wall Street investment in previously owned single-family houses.

Investment funds like Blackstone Group bought up thousands of foreclosed and distressed homes. Many of the properties were converted to rentals. And even though the housing market has more than bounced back since then, a dearth of homes for sale and surging demand for rental housing has motivated Wall Street to stake its investment on renting single-family homes, rather than selling them during housing market thirsty for inventory.

Blackstone Group, which spun off single-family home rental company Invitation Homes in 2017, agreed in June to buy Home Partners of America, which buys and then rents out homes.

For some would-be homebuyers frustrated by the priciest housing market in decades, renting a house is the next best thing, and that’s helping drive up rents, which jumped 7.5% nationally in June from a year earlier, according to real estate data firm CoreLogic.

Not all real estate companies are in the business of renting houses. Many flip homes they buy. And there are so-called “iBuyers,” companies like Zillow, Redfin, and Opendoor, which buy homes, typically from sellers who want to sell their home quickly, and then put the homes back on the market.

Still, nationally, investors bought more homes than they sold in the first half of this year, according to data from Realtor.com.

“In the early months of the pandemic they were adding to inventory and it was also the case through the spring and early summer months of 2019, but in general, throughout most of this data history, we’ve seen more investor buyers that we have investor sellers,” said Danielle Hale, Realtor.com’s chief economist.

The competition would-be homebuyers face from big real estate investors is something the Biden administration is hoping to mitigate as part of a broader initiative aimed at addressing the housing supply shortage and reducing price pressures in the housing market.

Last week, the White House said it was ordering federal housing finance agencies give buyers and nonprofits a 30-day exclusive window to make offers on more than 12,000 homes that failed to sell in foreclosure auctions.



Source link

Apartment prices in Greece rise 4.6% in Q2 2021 – ET RealEstate

ATHENS: The recovery in Greece‘s residential real estate market picked up pace in the second quarter as the economy rebounded after last year’s pandemic-induced 8.2% economic slump, central bank data showed on Tuesday.

Property accounts for a big chunk of household wealth in Greece, where the home ownership rate is about 73.5%, above the euro zone average of 66%, according to European Union statistics on income and living conditions.

Greece’s housing sector recovery has been driven by an expanding economy and foreign interest. Apartment prices rose 4.6% in the second quarter compared with the same period a year earlier, Bank of Greece data showed, and the pace was up from a 3.2% increase in the first quarter.

The uptrend benefited all areas of the market – including old and newly built apartments – and in all regions, although price gains in the capital Athens led the way.

Prices rose by 6.4% year-on-year in Athens, where home-sharing platforms such as Airbnb and a “golden visa” programme – a renewable five-year resident’s permit in return for a 250,000-euro ($285,000) investment in real estate – have become popular.

Greece’s 180 billion euro economy grew at an annual 16.2% clip in the second quarter, beating forecasts, as consumer spending and investments picked up, data showed on Tuesday. House prices fell 42% between 2008 – when the country’s protracted recession began – and the end of 2017.

The market was hit by property taxes imposed to plug budget deficits, tight bank lending and a jobless rate that peaked at 27.8% in 2013.

Economic prospects improved thereafter with Greece emerging from its latest bailout in August 2018 and now accessing international markets for funding.



Source link

USA: White House details plans to improve housing affordability – ET RealEstate

WASHINGTONWhite House officials are outlining plans to build and restore more than 2 million homes, a response to the volcanic rise in housing prices over the past year.

Millions of Americans are getting priced out of ownership or stuck spending the bulk of their income on rent. The S&P CoreLogic Case-Shiller 20-city home price index climbed a record 19.1% in June from a year ago, as too few homes are available to buy and low interest rates have enabled affluent buyers and real estate investors to pay more for homes.

The jump in prices is a threat to President Joe Biden‘s vision of centering the U.S. economy around the middle class, a group that has defined itself in large part through home ownership. Americans’ desire to own homes has also altered regional politics as suburbanites aligned with Democrats in 2020 to help give Biden key victories in Arizona and Georgia, two states that have added population through new home construction.

The White House Council of Economic Advisers on Wednesday posted on its blog a detailed analysis of the affordability problem and the administration’s plans to relieve it. Its analysis notes that housing supply has fallen short of population growth for four decades, so many of the challenges predate the disruptions caused by the COVID-19 pandemic.

Researchers at the mortgage buyer Freddie Mac estimate that the United States is 3.8 million homes shy of what is needed to meet demand. The persistent shortage has meant that home prices are steadily increasing faster than incomes, making it harder for first-time buyers to save for down payments and keeping them in rentals longer. Nearly half of renters spend more than the recommended 30% of their incomes on housing.

To increase home construction, Biden’s economics team proposes a series of policy shifts.

First, it intends to deliver 100,000 affordable housing units over three years through a series of administrative changes. It will increase mortgage availability through Freddie Mac and Fannie Mae for manufactured houses and buildings with two to four units. The government also intends to make it easier for would-be owners and nonprofits to buy homes that failed to sell in foreclosure auctions, as well as expand outreach to local governments and nonprofits to buy federally held homes.

The government also plans to increase the financing options for apartment buildings through tax credits, loans and grants.

Secondly, the Biden administration estimates that its economic agenda would lead to the construction and renovation of 2 million homes. This would include the use of federal subsidies, the low-income housing tax credit, a new tax credit for construction in economically vulnerable neighborhoods and incentives to remove exclusionary zoning and land use policies by local and state governments that limit new construction.

Still, the blog post cautioned that a supply crunch could linger.

“There is no magic formula to quickly relieve the supply constraints,” it concluded.



Source link