LONDON, Jan 26 (Reuters) – Britain’s commercial real estate sector is increasingly feeling the pinch of higher borrowing costs, as investor enquiries declined in the fourth quarter and the outlook for the year ahead worsened, an industry survey showed on Thursday.
The Royal Institution of Chartered Surveyors (RICS) said 83% of respondents to its quarterly commercial property survey thought the market was already in a downturn, up from 81% a quarter before. Almost half considered this downturn to be in its early stages.
RICS said investor enquiries fell across all sectors for the first time since the start of the pandemic, with a net balance of -30 of respondents citing lower investment demand.
Tarrant Parsons, senior economist at RICS, said the investment side of the commercial property market was “significantly affected” by the Bank of England’s (BoE) tighter monetary policy, and that higher borrowing costs were weighing on investor demand and hurting valuations.
The BoE’s Monetary Policy Committee raised its main rate at its last nine meetings and markets have priced in a half percentage point increase to 4% for Feb. 2.
British consumer price inflation was running at 10.5% in December, nearly five times the Bank’s 2% target.
Near-term capital value expectations dropped sharply across the board, and the industrial sector saw the weakest reading since 2011.
“Linked to the rise in government bond yields over the past six months, capital values have pulled back noticeably of late, while expectations point to this downward trend continuing over the near term,” Parsons said.
Looking at the year ahead, average capital values were forecast to fall further in all parts of Britain.
The survey of 940 companies was conducted between Dec. 7 and Jan. 13.
Reporting by Suban Abdulla; editing by David Milliken
Our Standards: The Thomson Reuters Trust Principles.
Jan 20 (Reuters) – Land Securities Group Plc (LAND.L), Britain’s top commercial property landlord, has appointed broadcaster Channel 4’s Ian Cheshire as its next chairman, the company said on Friday.
The new Landsec chairman takes over the mantle at a time when UK commercial property values are seeing a slump, pressured by rising interest rates and broader economic uncertainty.
Aggressive interest rate hikes to tame stubborn inflation and deepening recession worries are dampening a tentative recovery in the British commercial property sector from the pandemic fallout.
Cheshire, the chairman of Channel 4 and private hospital operator Spire, replaces Cressida Hogg, who was named the next chair of defence firm BAE Systems (BAES.L) last year.
He will join the Landsec board in a non-executive capacity on March 23 and take over the chairman’s role on May 16, when Hogg retires after almost five years in that position.
Cheshire, 63, is currently a non-executive director at BT Group (BT.L) and will retire from the communications firm at their annual general meeting in July.
A veteran in the retail industry, Cheshire had joined Channel 4’s board last April and was in the forefront of discussions with the British government over its now-abandoned privatisation plan.
Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Savio D’Souza and Sherry Jacob-Phillips
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BEIJING/HONG KONG, Jan 13 (Reuters) – Chinese government-linked Xiamen C&D Inc (600153.SS) said on Friday it plans to acquire a 30% stake in home furnishings store operator Red Star Macalline Group (601828.SS) in a deal worth up to 6.3 billion yuan ($938 million).
The transaction, which would involve buying a 29.95% stake from Red Star Macalline’s current controlling shareholder, will require approval from the state asset regulating authority in the city of Xiamen, which controls Xiamen C&D, the company said in a stock exchange filing.
Red Star Macalline in the third quarter of 2022 reported a 8.4% fall in revenue and a 47.3% drop in net profit citing disruption caused by COVID-19 outbreaks to its businesses.
Sluggish new home sales in the world’s second largest economy have hurt demand for home decoration and furnishing, analysts have noted.
Property sales by floor area in January-November fell 23.3% from a year earlier, China’s statistics bureau reported.
For the first nine months last year, Red Star Macalline recorded total liabilities of 76.0 billion yuan versus assets of 133.7 billion yuan.
As for the firm’s controlling shareholder Red Star Macalline Holding Group, a Fitch Ratings report in September said the firm faced “heightened refinancing risks” related to its “large onshore bond maturities” over the coming 12 months.
In July 2021, Red Star Macalline Holding Group agreed to sell 70% stake in a property development unit to an entity linked to Sino-Ocean Group (3377.HK) for 4 billion yuan.
($1 = 6.7147 Chinese yuan renminbi)
Reporting by Roxanne Liu and Kane Wu; editing by Jason Neely
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HOUSTON, Jan 12 (Reuters) – A 3D printer is taking home building to a new level — literally.
The enormous printer weighing more than 12 tons is creating what is believed to be the first 3D-printed, two-story home in the United States.
The machine steadily hums away as it extrudes layers of concrete to build the 4,000-square-foot home in Houston.
Construction will take a total of 330 hours of printing, said architect Leslie Lok, co-founder of design studio Hannah and designer of the home.
“You can actually find a lot of 3D-printed buildings in many states,” Lok said. “One of the things about printing a second story is you require, you know, the machine…And of course, there are other challenges: structural challenges, logistic challenges when we print a second-story building.”
The three-bedroom home with wooden framing is about halfway finished and is being sold to a family, who wish to remain anonymous, she said.
[1/4] A 12-ton industrial 3-D printer is used to print concrete for the first 3-D-printed, two-story home currently under construction in Houston, Texas, U.S., January 3, 2023. REUTERS/Evan Garcia
The project is a two-year collaboration by Hannah, Peri 3D Construction and Cive, a construction engineering company.
Hikmat Zerbe, Cive’s head of structural engineering, hopes the innovative technique can one day help more quickly and cheaply build multifamily homes.
In addition, concrete can withstand the hurricanes, heavy storms and other severe weather in Texas that is becoming more frequent and severe due to climate change.
And since the printer does all the heavy lifting, less workers are needed at the construction site.
“Traditional construction, you know the rules, you know the game, you know the material properties, the material behavior. In here, everything is new,” Zerbe said. “The material is new, although concrete is an old material in general, but 3D printing concrete is something new.”
Read more:
Scientists chip away at how ancient Roman concrete stood test of time
Reporting by Evan Garcia; Editing by Lisa Shumaker
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LONDON, Jan 11 (Reuters) – Self-driving software startup Oxbotica has raised $140 million from investors to speed deployment of autonomous vehicles (AVs) in areas including heavy industry, ports and airports.
The Series C round includes funding from new investors including Japanese insurer Aioi Nissay Dowa Insurance, the venture capital arm of software company Trimble (TRMB.O) and the venture capital arm of Japanese oil refiner Eneos (5020.T).
It also includes fresh funding from existing investors including Tencent (0700.HK) and the venture capital arm of BP (BP.L), as well as Kiko Ventures, the clean tech investment platform of IP Group (IPO.L) and Oxbotica’s first institutional investor.
Oxbotica has now raised about $225 million in total and the company said that additional investors are expected to sign up before the funding round closes in a few months.
The startup is working on specific applications for strategic investors. These include AVs for remote BP locations, a people mover for German auto parts supplier ZF Friedrichshafen and for last-mile delivery by British online supermarket and technology group Ocado (OCDO.L).
The clamour for robotaxi applications, however, appears to have subsided.
Ford Motor Co (F.N) said in October that it was winding down its Argo AI self-driving business, saying robotaxis were still too far off to continue investing.
Oxbotica Chief Executive Gavin Jackson told Reuters that AVs using the startup’s software will enter service in 2023 in the energy and agriculture sectors, plus private truck yards, followed by fixed-route passenger shuttles in 2024.
Once regulations catch up with the industry, the company will start running tests on limited routes for Ocado in 2025, Jackson said.
He said the company has customers in mining, construction, agriculture, airports, ports and the logistics sector, all of which want safe and reliable AVs.
“These are the applications that matter,” Jackson said. “The proceeds (of this funding round) will really accelerate deployment for our commercial customers.”
Reporting by Nick Carey
Editing by David Goodman
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WASHINGTON/LONDON, Dec 20 (Reuters) – Boeing (BA.N) Commercial Airplanes is tapping the sales chief who helped lead the U.S. planemaker through two major crises in recent years to oversee fractured global supply chains as the aerospace industry battles to meet resurgent jet demand.
Ihssane Mounir has been named senior vice president of global supply chain, Boeing Commercial Airplanes Chief Executive Stan Deal said in an email to employees. Mounir was previously senior vice president of commercial sales and marketing.
Deal told the company’s 1,200 direct suppliers in a separate memo that Mounir would lead internal and external supply chains and integrate strategy and requirements across all programs.
The decision to unite in-house fabrication and the external supply chain restores a structure used in the past and comes as the industry fights post-COVID disruption on a broad front.
“As an industry, while we are seeing strong indications of global market resilience and recovery, we are still working to drive stability and predictability in our factories,” Deal said in the memo to suppliers, which was seen by Reuters.
During an unusually long six-year stint as sales chief, Mounir helped steer Boeing through the twin crises of fatal crashes that led to the grounding of the 737 MAX and the COVID-19 pandemic – a period during which rival Airbus SE (AIR.PA) emerged as largest planemaker by number of deliveries.
He made headlines in 2019 with a tentative sale of 200 MAX to British Airways owner IAG (ICAG.L)
, stealing the Paris Airshow from Airbus in a deal seen as a rescue package for the floundering jetliner just as Boeing was sliding into a two-year crisis.
The number of planes involved fell to 50 when the deal was finalized after the pandemic, but the original coup was credited with easing doubts over the future of Boeing’s biggest cash cow.
Boeing went on to sell 1,300 MAX jets under Mounir since the lifting of the safety ban, offsetting a slew of cancellations, although Airbus still leads the coveted top of the segment.
Industry sources have said Boeing is also poised to sell 190 MAX and 30 larger 787s as part of a fleet shake-up involving a total close to 500 jets at Air India, roughly split with Airbus.
Among other moves, Deal said Brad McMullen, vice president of commercial sales North America, would succeed Mounir in his sales position while Kim Smith was named to the new role of vice president of Boeing Global Services (BGS) Total Quality.
McMullen has for several years driven strategically important accounts in Boeing’s home market, where United Airlines (UAL.O) last week ordered 100 MAX and 100 787s, again upstaging Airbus whose own United order for 45 A350s now looks uncertain.
Former aerodynamicist Mounir must now deal with separate turmoil in supply chains that have been disrupted by the factory bottlenecks and labor shortages seen worldwide post-COVID.
Deal told reporters last week that Boeing faces a number of supply-chain issues.
“One thing that we’re going to be very mindful of is to make sure we run a disciplined (production) ramp-up,” he said.
Reporting by David Shepardson in Washington and Tim Hepher in London; Editing by Matthew Lewis and Leslie Adler
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TAIPEI, Dec 19 (Reuters) – Foxconn (2317.TW), the world’s largest contract electronics maker, is likely to be fined soon by Taiwan’s government for an unauthorised investment in a Chinese chip maker, a person with direct knowledge of the situation said on Monday.
Taiwan, which Beijing views as sovereign Chinese territory, has turned a wary eye on China’s ambition to boost its semiconductor industry and is tightening legislation to prevent what it says is China stealing its chip technology.
Foxconn, a major Apple Inc (AAPL.O) supplier and iPhone maker, disclosed in July it was a shareholder of embattled Chinese chip conglomerate Tsinghua Unigroup, but said late on Friday it would be selling the stake. Taiwan said on Saturday it would fine Foxconn over the investment.
Taiwan’s government, which needs to approve all outbound investments, had not approved the deal. Taipei also prohibits companies from building their most advanced chip foundries in China to ensure they do not site their best technology offshore.
The person familiar with the situation told Reuters that the Economy Ministry would contact Foxconn on Monday to confirm the equity sale.
“Even though the investment was later pulled the fact has already been established that they invested first, and they will be fined,” said the source, who was not authorised to speak to the media.
“It should not take too long for Hon Hai to be punished,” the source added, referring to the company’s formal name, Hon Hai Precision Industry Co Ltd.
Reuters has previously reported that the company could be fined up to T$25 million ($813,749). read more
Foxconn declined to comment.
Tsinghua Unigroup has not responded to a request for comment on the investment being pulled.
Taiwanese law states the government can prohibit investment in China “based on the consideration of national security and industry development”. Violators of the law can be fined repeatedly until corrections are made.
Foxconn has been seeking to acquire chip plants globally as a worldwide chip shortage rattles producers of goods from cars to electronics. It is keen to make auto chips in particular as it expands into the electric vehicle market.
($1 = 30.7220 Taiwan dollars)
Reporting by Jeanny Kao and Yimou Lee; Writing by Ben Blanchard; Editing by Kenneth Maxwell
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TOKYO, Dec 11 (Reuters) – A Japanese space startup is hoping third time is the charm on Sunday in its aim to launch the nation’s, and a private company’s, first ever spacecraft to the moon.
ispace Inc’s HAKUTO-R mission is due for launch from Cape Canaveral, Florida, at 2:38 a.m. (4:38 p.m. in Japan, 0738 GMT) after two delays caused by inspections of its SpaceX Falcon 9 rocket.
The national space agencies of the United States, Russia and China have achieved soft landings on Earth’s nearest neighbour in the past half century but no companies have.
Mission success would also be a milestone in space cooperation between Japan and the United States at a time when China is becoming increasingly competitive and rides on Russian rockets are no longer available in the wake of Russia’s invasion of Ukraine.
It would also cap a space-filled few days for Japan, after billionaire Yusaku Maezawa revealed on Friday the eight crew members he hopes to take on a SpaceX flyby of the moon as soon as next year.
The name HAKUTO refers to the white rabbit that lives on the moon in Japanese folklore, in contrast to the Western idea of a man in the moon. The project was a finalist in the Google Lunar XPRIZE before being revived as a commercial venture.
Next year is the Year of the Rabbit in the Asian calendar. The craft, assembled in Germany, is expected to land on the moon in late April.
The company hopes this will be the first of many deliveries of government and commercial payloads. The ispace craft aims to put a small NASA satellite into lunar orbit to search for water deposits before touching down in the Atlas Crater.
The M1 lander will deploy two robotic rovers, a two-wheeled, baseball-sized device from Japan’s JAXA space agency and the four-wheeled Rashid explorer made by the United Arab Emirates. It will also be carrying an experimental solid-state battery made by NGK Spark Plug Co (5334.T).
Privately funded ispace has a contract with NASA to ferry payloads to the moon from 2025 and is aiming to build a permanently staffed lunar colony by 2040.
Reporting by Rocky Swift; Editing by William Mallard
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WASHINGTON, Dec 6 (Reuters) – Many automakers and the South Korean government are urging the Biden administration to tap a commercial electric vehicle tax credit to boost consumer EV access, a plan that could help ease concerns over a climate bill approved in Congress.
The $430 billion U.S. Inflation Reduction Act (IRA) passed in August ended $7,500 consumer tax credits for electric vehicles assembled outside North America, sparking anger from South Korea, the European Union, Japan and others.
Some automakers say a lesser noticed IRA provision for “commercial clean vehicles” could be used to boost EV manufacturers and address foreign concerns.
Rivian Automotive (RIVN.O), Hyundai Motor (005380.KS) and Kia Corp (000270.KS) among others want the administration to let consumer vehicle leasing qualify for the commercial EV tax credit that could reduce monthly lease payments.
The South Korean government in comments made public Tuesday urged Treasury “interpret ‘commercial clean vehicles’ broadly” to include rental cars, leased vehicles and vehicles purchased for use in Uber (UBER.N) or Lyft (LYFT.O) rideshare fleets.
South Korea also asked Treasury not to impose any budget restrictions on commercial vehicle tax credits through 2025.
Hyundai and Kia want Treasury to allow people leasing EVs to be able to qualify for up to a $4,000 tax credit for used EVs if they buy vehicles when leases expire.
The IRA consumer EV tax credit imposes significant battery minerals and component sourcing restrictions, sets income and price caps for qualifying vehicles and seeks to phaseout Chinese battery minerals or components.
The commercial credit does not have the same sourcing or pricing restrictions but has an “incremental cost” eligibility test that might prove complex. Some automakers want Treasury to make it easier to ensure most commercial light-duty vehicles qualify for $7,500 tax credits.
President Joe Biden said last week “there are tweaks that we can make that can fundamentally make it easier for European countries to participate.”
Some automakers oppose using the commercial credit for consumer sales.
Toyota Motor Corp (7203.T) said “the lack of criteria to qualify for (commercial credits) could undermine the IRA’s goals to expand domestic production of EV batteries and maintain America’s energy independence.”
Tesla (TSLA.O)said commercial credits “should apply exclusively for commercial end-users” and the consumer tax credit “should apply exclusively for individual end-users.”
General Motors (GM.N) Chief Executive Mary Barra told Reuters on the sidelines of an event Monday that addressing foreign concerns about the credit is “more complicated than just one thing to solve it” and added “sticking to the intent of the bill” drafted by Congress “is important.”
Reporting by David Shepardson; Editing by Lincoln Feast.
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Nov 28 (Reuters) – China Evergrande Group (3333.HK) said on Monday its unit has entered into a deal to sell a piece of commercial land in Shenzhen for 7.54 billion yuan ($1.05 billion), as the embattled property developer looks to shave off its massive debt.
Evergrande, which has about $300 billion in liabilities, has been at the centre of a deepening property debt crisis in China that has seen multiple developers defaulting on their offshore debt obligations over the past year, prompting many to consider debt restructuring. read more
The company said it will sell the land to Shenzhen Anhe No. 1 Property Development, a unit of Shenzhen Anju Construction Investment and Operation. Real-estate firm China Vanke (000002.SZ) holds a 20% stake in Shenzhen Anju.
Evergrande expects a loss of about 163 million yuan from the disposal of the 10,376.82 square meter landholding located in Shenzhen.
The company said the proceeds from the sale will be used to repay relevant debts in respect of the land, while adding the land did not generate any rental income in 2020 and 2021.
($1 = 7.2095 Chinese yuan renminbi)
Reporting by Jaskiran Singh in Bengaluru; Editing by Shounak Dasgupta and Shinjini Ganguli
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