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
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SYDNEY/HONG KONG, Jan 13 (Reuters) – Dalian Wanda Commercial Management raised $400 million in a U.S. dollar bond, a term sheet seen by Reuters showed, in the first publicly sold dollar bond by a Chinese property-related firm since late 2021 when the sector’s debt crisis came to a head.
The company is the property services arm of commercial property developer Dalian Wanda Group.
Investor confidence in China’s property sector has been hit by a string of debt defaults, and bond exchanges to extend repayments since late 2021 when the liquidity troubles of China Evergrande Group (3333.HK) deepened, leaving companies little room to raise fresh funds offshore.
Final pricing for Wanda’s 11%, two-year bond was set with a yield of 12.375%, compared to the initial price guidance given to investors of 12.625%, the term sheet showed.
A presentation by Wanda Commercial Management Group seen by Reuters said the book received 3.7 times over-subscription, with $500 million orders from long-only funds, including Blackrock, Fidelity, Pictet AM, Invesco and PAG.
“This deal reopened the dormant China property and high-yield bond market, and received an active and positive reaction,” it added.
Dalian Wanda Group did not immediately respond to a request for comment while its commercial management arm could not be immediately reached.
Blackrock, Fidelity, Pictet AM and PAG did not immediately respond to requests for comment. Invesco declined to comment.
Unlike many other Chinese developers who focus on residential projects, Dalian Wanda Group relies on rental income and has an asset-light model. Wanda will use the proceeds to refinance existing debt and for general corporate purposes, according to the term sheet.
Moody’s assigned a rating of Ba3 to the notes, while Fitch Ratings assigned BB. Both are high-yield grades.
S&P Global said in a conference call Wanda’s issuance represented a good signal to the market, and it was positive for corporates to have multiple financing channels even though the offshore rates could be higher than onshore now.
Reporting by Scott Murdoch in Sydney and Clare Jim in Hong Kong; Editing by Lincoln Feast and Muralikumar Anantharaman
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SEOUL, Jan 12 (Reuters) – South Korean tech conglomerate Kakao Corp (035720.KS) said on Thursday unit Kakao Entertainment secured a 1.2 trillion won ($966.27 million) investment from leading sovereign wealth funds.
The move, which Kakao said was the largest overseas investment in a South Korean content company, signals investors’ bullish outlook for Korean contents’ growth potential and its “recession-proof” tendencies when weak a economic outlook has dried up liquidity in many other sectors, analysts said.
Singapore’s GIC and Saudi Arabia’s Public Investment Fund (PIF) decided to each invest 600 billion won in the entertainment firm, local newspaper Korea Economic Daily reported on Thursday, citing unnamed investment banking sources.
Kakao, however, did not name the sovereign wealth funds in its statement. GIC and PIF did not immediately comment.
Kakao Corp shares rose 1% in early morning trade, outperforming a 0.2% rise in the wider market (.KS11).
“It’s significant that we were able to secure funds of this scale at a time when both the Korean and global markets face a lot of uncertainty and investment sentiment is weak,” Kakao Chief Investment Officer Bae Jae-hyun said.
Unlisted Kakao Entertainment has a business portfolio ranging from K-Pop – including artist management – to shows, movies, and online-targeted, comparatively low-cost content such as comics called webtoons and serial web novels.
“Webtoons and web novels are steadily being turned into successful dramas and other formats, so investors think this is good value and timing to invest in an intellectual property holder,” said Kim Jin-woo, analyst at Daol Investment & Securities.
“Having secured funds, Kakao Entertainment may seek to strengthen its artist lineup that can better target overseas markets via M&A or other ways.”
($1 = 1,241.8900 won)
Reporting by Joyce Lee; Editing by Chris Reese and Sherry Jacob-Phillips
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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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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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Dec 1 (Reuters) – Blackstone Inc (BX.N) will sell its 49.9% stake in the joint venture that owns the MGM Grand Las Vegas and Mandalay Bay resorts to co-owner VICI Properties Inc (VICI.N) for about $1.27 billion in cash, the companies said on Thursday.
The deal includes the assumption of Blackstone Real Estate Investment Trust’s (BREIT) existing property-level debt that has a principal balance of $3 billion.
The New York-based private equity firm is paring some real-estate investments as interest rates climb and turmoil brews in the housing market. The company was set to sell a $400 million stake in Indian REIT Embassy, Reuters has reported. read more
The stake sale in the two Las Vegas resorts will generate a profit of more than $700 million for Blackstone in less than three years, including rent from the operator, the Wall Street Journal, which first reported the deal said.
“The sale of these assets is an excellent outcome for our BREIT investors and enables us to further concentrate BREIT’s portfolio in its highest growth sectors, including logistics and rental housing,” said Scott Trebilco, Senior Managing Director of Blackstone Real Estate.
The company had been ramping up investments in the real estate sector until earlier this year. In July, the company drew commitments worth $24.1 billion for its latest real estate fund.
VICI Properties, which owns properties such as the Caesars Palace Las Vegas, MGM Grand and the Venetian Resort Las Vegas, expects the deal to be immediately add to adjusted funds from operations (AFFO) per share upon closing.
The sale is expected to be completed early in the first quarter of 2023.
Reporting by Aishwarya Nair in Bengaluru; Additional reporting by Niket Nishant in Bengaluru; Editing by Sriraj Kalluvila
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NEW YORK/LONDON, Nov 22 (Reuters) – Stricken crypto exchange FTX was run as a “personal fiefdom” of Sam Bankman-Fried, attorneys for the firm said on Tuesday, describing that one of the company’s units spent $300 million on Bahamas real estate.
The collapse of FTX, once one of the world’s largest cryptocurrency exchanges, has left an estimated 1 million creditors facing losses totaling billions of dollars.
An attorney for FTX said at a bankruptcy hearing on Tuesday that the $300 million in real estate was largely homes and vacation properties for senior staff. The company intends to sell off healthy business units, an attorney said.
Reuters earlier reported that Bankman-Fried’s FTX, his parents and senior executives of the failed cryptocurrency exchange bought at least 19 properties worth nearly $121 million in the Bahamas over the past two years, official property records show. read more
At the hearing, an attorney for FTX also said that the company continues to suffer cyberattacks as bankruptcy begins, and that “substantial” assets are missing.
Its cash balance of $1.24 billion as of Sunday was “substantially higher” than previously thought, a filing Monday night by Edgar Mosley of Alvarez & Marshal, a consultancy firm advising FTX, said.
It includes around $400 million at accounts related to Alameda Research, the crypto trading firm owned by FTX founder Sam Bankman-Fried, and $172 million at FTX’s Japan arm.
FTX, which said on Saturday it has launched a strategic review of its global assets and is preparing for the sale or reorganization of some businesses, had previously said that it owes its 50 biggest creditors nearly $3.1 billion. read more
Reuters has reported Bankman-Fried secretly used $10 billion in customer funds to prop up his trading business, and that at least $1 billion of those deposits had vanished.
The details of FTX’s cash balances came ahead of a hearing in Delaware on FTX’s so-called first-day motions, which kicked off on Tuesday.
FTX has asked Judge John Dorsey to sign off on initial steps in its bankruptcy, including paying employees and critical vendors, which will allow it to continue operating during Chapter 11 bankruptcy proceedings.
The firm had also asked Dorsey to take over a separate Chapter 15 case filed last week in New York on behalf of FTX’s Bahamas unit by liquidators appointed by a Bahamas court. Such proceedings are used by foreign companies to seek U.S. courts’ cooperation in cross-border bankruptcy cases.
Lawyers representing the Bahamian liquidators, who have previously questioned the validity of the U.S. Chapter 11 proceedings and clashed with the team leading it over which case should take precedence, agreed to that demand before Tuesday’s hearing.
FTX, led since the bankruptcy filing by new CEO John Ray, has accused Bankman-Fried of working with Bahamian regulators to “undermine” the U.S. bankruptcy case and shift assets overseas.
Bankman-Fried, FTX and the Bahamas liquidators did not immediately respond to requests for comment.
FTX is also seeking to indemnify unidentified individuals for actions they took and continue to take in connection with assets that represent a significant share of the company’s estate, according to a Tuesday court filing. read more
Sealed indemnification requests are unusual at the start of a bankruptcy case. FTX said that it was communicating with U.S. regulators and bankruptcy court officials, but did not mention Bahamas regulators.
CONTAGION FEARS
FTX’s fall from grace has sent shivers through the crypto world, driving bitcoin to its lowest level in around two years and triggering fears of contagion among other firms already reeling from the collapse in the crypto market this year.
Major U.S. crypto lender Genesis said on Monday it was trying to avert bankruptcy, days after FTX’s collapse forced it to suspend customer redemptions.
“Our goal is to resolve the current situation consensually without the need for any bankruptcy filing,” a Genesis spokesperson said in an emailed statement to Reuters, adding that it continues to have conversations with creditors.
A Bloomberg News report, citing sources, had said Genesis was struggling to raise fresh cash for its lending unit, and warning investors it may need to file for bankruptcy if it does not find funding.
The Wall Street Journal reported, citing sources, that Genesis had approached Binance seeking an investment but the crypto exchange decided against it, fearing a conflict of interest. Genesis also approached private equity firm Apollo Global Management (APO.N) for capital assistance, the WSJ said.
Apollo did not immediately respond to a Reuters request for comment on the WSJ report, while Binance declined to comment.
Genesis Global Capital suspended customer redemptions in its lending business last week, citing the sudden failure of FTX.
Crypto exchange Gemini, which runs a crypto lending product in partnership with Genesis, tweeted on Monday that it was continuing to work with the company to enable its users to redeem funds from its yield-generating “Earn” program.
Gemini said on its blog last week there was no impact on its other products and services after Genesis paused withdrawals.
Since the implosion of FTX, some crypto players are taking to decentralized exchanges known as “DEXs” where investors trade peer-to-peer on the blockchain.
Overall daily trading volumes on DEXs leapt to their highest level since May on Nov. 10, as FTX imploded, according to data from market tracker DeFi Llama, but have since pared gains.
Reporting by Dietrich Knauth in New York and Tom Wilson in London; additional reporting by Manya Saini, Rishabh Jaiswal, Juby Babu and Lavanya Sushil Ahire in Bengaluru; Editing by Megan Davies, Alexander Smith and Nick Zieminski
Our Standards: The Thomson Reuters Trust Principles.
DUBAI, Nov 8 (Reuters) – Dubai state developer Nakheel has secured 17 billion dirhams ($4.63 billion) in financing from local banks for new projects including Dubai Islands and other waterfront developments, it said on Tuesday.
The developer of the palm shaped islands off Dubai said the financing was through a syndicate of three local lenders, Emirates NBD (ENBD.DU), MashreqBank (MASB.DU) and Dubai Islamic Bank (DISB.DU).
The transaction comprises of 11 billion dirhams in refinancing and additional funds of 6 billion dirhams through the syndicate.
Nakheel is planning to develop another man-made island named Dubai Islands, formerly known as Deira Islands, comprising five islands over a total area of 17 sq km.
The transactions will further strengthen Nakheel’s financial position, a company spokesperson said, adding that it “reflects the confidence of the banking institutions in the strategic new focus of the company”.
The state-owned business was one of the developers worst hit by Dubai’s real estate crash at the turn of the decade, forcing it into a massive debt restructuring.
Dubai’s red-hot property market surged in the first half of this year as investors piled in, with Russians among the top five buyers as the emirate benefits from an influx of wealth in the wake of Western sanctions against Russia over its invasion of Ukraine.
First-half residential real estate transaction volumes rose 60%, with an 85% rise in the value of properties sold, property consultancy Betterhomes said in a July report.
Dubai’s property market began its recovery early last year after the emirate eased pandemic restrictions faster than most cities around the world.
($1 = 3.6726 UAE dirham)
Reporting by Hadeel Al Sayegh
Editing by Janane Venkatraman and David Goodman
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HONG KONG, Oct 24 (Reuters) – Goldman Sachs (GS.N) has launched a joint venture in China with local logistics company Sunjade in a bid to boost investment in Chinese logistics and infrastructure real estate assets, the U.S. bank said on Monday.
The bank is forming the new unit via its investment arm Goldman Sachs Asset Management, which has invested more than $50 billion globally in real estate businesses, according to a company statement.
It did not disclose the shareholding structure or capital commitment to the platform.
The joint venture, which focuses on projects located in China’s first-tier cities and surrounding areas, has invested in a 240,000-square-meter project with four institutional-grade warehouse assets located in Shanghai and its neighbouring area.
The U.S. bank said the new platform will benefit from China’s rising demand for new high-quality infrastructure assets, in particular institutional-quality warehousing space driven by e-commerce and the diversification of industrial requirements supported by government policies.
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Reporting by Selena Li; Editing by Kirsten Donovan
Our Standards: The Thomson Reuters Trust Principles.