〈Asian Post, Jan 22,2022〉China Evergrande Group is hiring more financial and legal advisers to deal with creditors’ demands, after a group of offshore bondholders warned of enforcement action, taking it a step forward in resolving its debt issues.

The embattled developer, struggling with 1.97 trillion yuan (HK$2.42 trillion) of liabilities, said in an exchange filing yesterday that it was seeking to hire China International Capital Corp and BOCI Asia as financial advisers, and Zhong Lun Law Firm as legal adviser.

"In view of the operational and financial challenges the group is facing and, in particular, the debt stress it is experiencing," Evergrande said it planned to hire more professionals to "assist the company in mitigating and eliminating the risks relating to its debts and following up with demands from the creditors".

The move comes after a group of offshore bondholders, represented by law firm Kirkland & Ellis and investment bank Moelis, said on Thursday that Evergrande had failed to substantially engage with it on restructuring efforts.

〈Taipei Times, Jan 21, 2022〉Hong Kong has rejoined a list of the 10 most attractive property investment destinations in Asia-Pacific in 2022 after failing to make the cut last year, according to a report by CBRE.

The city placed sixth in a poll of about 30 cities in the region, a marked improvement after dropping out of the list last year. In 2020, Hong Kong came eighth after investor confidence was affected by social unrest the previous year.

"Interest in Sydney and Hong Kong was stronger compared to last year’s survey," according to the report. "Hong Kong has seen the return of international capital, particularly to the industrial and hotel sector for repositioning plays, as investors look to capitalise on price discounts in these sectors."

This year there would be "growing interest from investors looking to purchase hotels for conversion into multifamily rental assets, serviced apartments or co-living space in urban areas, driven by strong end-user demand from young professionals wanting to move out from the family home to their own private spaces closer to work", said Reeves Yan, executive director and head of capital markets at CBRE

〈Business Post, Jan 20, 2022〉The People’s Bank of China reduced the loan prime rates as the economy stuttered amid a real-estate crisis and COVID-19 flare-ups

China yesterday further reduced bank lending costs in the latest move to boost its stuttering economy, providing some much-needed support to the nation’s beleaguered developers.

Property firm shares and bonds surged on the fresh rate cut from the People’s Bank of China (PBOC) — the second in two months — days after Beijing reported slower growth in the final months of last year.

The central bank said it had lowered the one-year loan prime rate (LPR) to 3.7 percent, from 3.8 percent last month, while the five-year LPR was reduced by 5 basis points.

It had reduced the LPR — which guides how much interest commercial banks charge to corporate borrowers — last month, for the first time in 20 months, as the economy was threatened by the real-estate crisis and COVID-19 flare-ups.

The launch of a regulatory drive last year to curb speculation and leverage had cut off avenues to crucially needed cash, sparking a crisis in the Property sector.

〈Business Post, Jan 19, 2022〉Hong Kong may see a record amount of new retail space come to the market in 2023 as landlords try to time the opening of their shopping centres to coincide with the return of tourists after the city’s borders reopen.

With several large projects in the pipeline, the amount of new space for shops could quadruple from just over 1 million sq ft this year to about 4 million sq ft in 2023, according to Savills.

"There is hope that land checkpoints may reopen in the second half of 2022 which would help retail businesses, especially in the New Territories submarket," said Simon Smith, regional head of research and consultancy for Asia-Pacific at Savills.

He said the dramatic increase in supply might lead to "some moderation" of rental growth in noncore areas in 2023.

The largest supply of new retail space came in 2019, at over 2.3 million sq ft, which included the opening of the K11 Musea shopping centre in Tsim Sha Tsui, according to Savills.

The five-year average between 2017 and 2021 was 956,000 sq ft.

Nan Fung’s Airside mall in Kai Tak is among the major projects due to open this year.

〈China Daily, Jan 18, 2022〉Shimao founder seeks HK$1.6 billion for Levels 31 and 32 of the office tower to reduce debt load

The founder of Shimao Group is putting two floors of The Center office tower in Hong Kong on sale, as the mainland developer joins many of its peers in seeking to cut its debt load.

Hui Wing-mau and his daughter, Hui Mei-mei, are seeking a total of HK$1.6 billion for Levels 31 and 32, which have a combined floor plate of about 50,000 sq ft, according to sales materials.

Shimao was "relying on asset disposals and extending some short-term maturities to improve liquidity", said Fitch Ratings, which cut the firm’s credit rating to B-minus from BB last week.

"Shimao’s ratings reflect its decreasing margin of safety in liquidity amid deteriorating market confidence," it said.

Hui Wing-mau was part of the nine-member consortium that bought the 73-storey tower, the city’s fifth tallest, in early 2018 for HK$40.2 billion, paying HK$8 billion for nine floors.

Hui was not available for comment, and officials at Shanghai-based Shimao did not immediately respond to requests for comment.

Shimao is seen as one of the mainland’s more conservative borrowers in a Property industry where most developers rely on bank loans to finance their land purchases and construction.