Taeyoung Selling Stake in KKR JV in Restructuring and More Asia Real Estate Headlines

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Joined: Nov 2016

Yoon Se-young, founder and CEO of Taeyoung Group

Distress in Korea’s property market leads Mingtiandi’s first headline roundup of 2024, with the parent of one of the country’s largest construction firms filing a debt workout plan. Also in the news, the Guangzhou city government is getting a vote of confidence from its own developer and Singapore’s Sembcorp moves forward with a Vietnam industrial park.

Korea’s Taeyoung Files for Restructuring, Offers to Sell Stake in KKR JV
South Korea’s Taeyoung Group, saddled with KRW 5.6 trillion ($4.4 billion) in debt and loans it has guaranteed, filed for a debt workout program on Thursday, spotlighting the liquidity crunch in the construction sector struggling with high financing costs and stalled building projects.

The construction, logistics and media group submitted the debt restructuring application to its main creditor Korea Development Bank, after lenders refused to roll over debt of KRW 48 billion due on Thursday. The application includes a plan to raise fresh capital by selling its entire stake in Ecorbit, a 50:50 joint venture with KKR , according to sources familiar with the situation. Read more>>

China’s Yuexiu Wins Bids for Pair of Guangzhou Residential Projects
State-backed developer Yuexiu Property has taken on a pair of new residential projects in its home city, picking up a site in Guangzhou’s Haizhu district for RMB 2.3 billion ($324 million) and a second plot in Tianhe district for RMB 4.4 billion, according to a pair of announcements to the Hong Kong Stock Exchange on Friday.

The builder, which is controlled by the Guangzhou city government, is entitled to build up 49,465  square metres (532,436 square feet) on the Haizhu site, with another 153,496 square metres permitted on the plot in Grand World Scenic Park Phase II in Tianhe. Read more>>

Temasek-Backed Sembcorp Wins Approval for Northern Vietnam Industrial Park
Sembcorp has obtained an investment licence for an industrial park project in Ha Tinh, Vietnam. The 190-hectare (469 acres) development will be added to wholly owned subsidiary Sembcorp Development’s portfolio, the group said on Friday.

The investment licence was awarded to the Vietnam Singapore Industrial Park and Township Development Joint Stock Company, a 46.5 percent-owned joint venture with Vietnam state-owned enterprise Becamex IDC Corporation. Read more>>

How China’s Property Crisis Blew Up ‘Can’t Lose’ Investments
One of China’s largest investment firms, Citic Trust, had a clear pitch to investors when it was aiming to raise $1.7 billion to fund property development in 2020: There is no safer Chinese investment than real estate.

The trust, the investment arm of the state-owned financial conglomerate Citic, called housing “China’s economic ballast” and “an indispensable value investment”. The money it raised would be put towards four projects from Sunac China Holdings, a major developer. Read more>>

Founder-Backed Buyout of China Data Centre Operator VNET Completed
Chinese data centre operator Vnet Group on Thursday announced the completion of a $299 million by a state-backed investment firm working with the company’s founder Josh Chen Sheng which gives the group control of the Nasdaq-listed firm.

Vnet had earlier received backing both from Blackstone and GIC, with provincial government-controlled Shandong Hi-Speed Holdings Group now holding the largest stake in the company, which has seen its stock slump more than 51 percent in the last year. Read more>>

Sabana REIT Manager Refutes Tenant Counterclaim
Sabana Industrial REIT manager has filed a defence denying tenant Kleio One-Solution’s counterclaim. In an announcement on Thursday, the manager said that it sought to clarify Kleio One-Solution’s mischaracterisation of the REIT’s obligations under lease. This forms the basis for the tenant’s counterclaim.

The matter is still before Singapore High Court for determination. The manager will make relevant announcements as and when there are material developments. The tenant is the master lessee of 33 and 35 Penjuru Lane, and accounted for about 2.9 percent of the REIT’s monthly average gross rental income as of 30 June. Read more>>

China’s Central Bank Vows More Steps to Bolster the Economy
China’s central bank said on Thursday it would step up macroeconomic policy adjustments to support the economy and promote a rebound in prices, amid signs of rising deflationary pressures.

The People’s Bank of China will keep liquidity reasonably ample and guide the reasonable growth of credit, it said in a statement after a quarterly meeting of its monetary policy committee. Read more>>

Real Estate Market Stress Spreads to More APAC Markets
Surging interest rates and regulatory scrutiny are causing distress for builders and creditors in Asian economies from South Korea to Vietnam, highlighting the breadth of housing woes in a region overshadowed by China’s crisis.

While aggressive monetary tightening and the pandemic have had a more pronounced impact on commercial property in the US and Europe, it’s residential housing that is under more strain in Asia. One of the worst hit nations, Korea, saw the steepest home price slump in 25 years while a construction firm’s repayment struggle has rekindled fears of repeating the credit market turmoil in 2022. Read more>>

Tune in again soon for more real estate news and be sure to follow @Mingtiandi on X, or bookmark Mingtiandi’s LinkedIn page for headlines as they happen.


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