Asia’s richest person Li Ka-shing expands reach into Europe

HONG KONG: A consortium of companies owned by Li Ka-shing, the richest person in Asia, said Monday that it would pay more than $1 billion to acquire Dutch waste management firm AVR from its private equity owners.

Li’s companies have been seeking to expand their already considerable global portfolio of investments in utilities and infrastructure, which include electricity plants in Australia and natural gas networks in Britain.

Under the 943.7 million euro, or $1.26 billion, deal, four Li firms will acquire AVR, which incinerates waste and converts it into energy, from a Dutch company jointly owned by private equity firms Kohlberg Kravis Roberts and CVC Capital Partners.

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Canada’s GMP Capital Eyes Growth in Asia

Toronto-listed GMP Capital Inc, GMP.T +3.00% which provides advisory, underwriting and investment banking services to the natural resources sector, has been active in Australia since June 2011. Its president and chief executive Harris Fricker spoke to MoneyBeat on a recent trip to Sydney about the firm’s growth ambitions and his take on global equity capital markets. The below interview has been edited.
WSJ: What attracted GMP to Australia following your entry into London in 2006?
HF: London was a natural market for us given the bid for resources in Europe. Our success there caused us to look into the Australian market because it had identical rule of law, very common cultural traditions and very similar regulation. We thought we’d understand it very quickly. Secondly, it was being driven by the same macroeconomic factors that were driving Canada, and that was demand for commodities, stemming from the growth in Asia.
WSJ: How do you intend to grow GMP in Australia, perhaps with some acquisitions or new offices across the country?

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China’s Citic Capital Raises $683 Million Fund for Retail Property

Chinese asset management firm Citic Capital Holdings Ltd. has raised $683 million for a fund focusing on retail properties in China, underscoring continued investor enthusiasm for the country’s real estate sector.
Citic Capital has already invested $250 million of the new fund into three projects, including a shopping mall in Changsha in China’s Hunan province, another in Hefei in Anhui province and a third in Shanghai, according to its press release Monday. Construction on the latter two projects will start in the third quarter.
The firm said it plans to invest in up to five more projects in second-tier cities using its new real estate fund.
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REITS in Hong Kong, Singapore Lose Their Allure

Hong Kong and Singapore have seen a spate of initial public offerings by trusts playing on investors’ desire for two elements in recent months: yield and hard assets.
But a recent selloff in real-estate investment trusts in both cities hints at the fading allure of dividend-paying stocks, as concerns that the U.S. Federal Reserve may soon scale back its stimulus moves have driven up Treasury yields and rattled investors around the world. The drop in REITs also comes as investors fear that property prices could decline in Hong Kong and Singapore.
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Cloudy skies for nation’s foreign trade

The outlook for China’s foreign trade will remain grim in the near future as exporters’ confidence fell in May, an industrial survey covering businesses in the Pearl River Delta region has suggested.

The survey, conducted by Shenzhen-based One Touch Business Services Co, a Chinese provider of foreign-trade services, said the foreign trade climate index fell below the threshold in May in the delta region, one of China’s major industrial bases.

The index, which reflects Chinese exporters’ anticipation of future operations, stood at 98.65 in May in the delta region, 1.35 points below the threshold and a 5.15-point decrease from a month earlier, the survey said.

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The Role of the New Generation of China Amidst China’s Expanding Global Influence

China has made an extraordinary journey along the road back to greatness. Hundreds of millions have been lifted out of poverty, hundreds of millions more have joined the new middle class. It is on the verge of reclaiming what it sees as its rightful position in the world. China’s global influence is expanding and within a decade its economy is expected to overtake America’s. The new head of the country, Xi Jinping, has evoked that rise promoting the “Chinese dream” evoking its American equivalent. Mr Xi’s priority will be to keep the economy growing and that means opening up China even more. What will be the role of the Chinese new generation? Will nationalism interfere with the rhetoric of the resurgent nation? Will corruption and official excess be curbed? Will the constitution become more powerful than the party?

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The Possibility of Chinese Real Estate Developers Moving to the United States

One of China’s biggest real estate developers, China Vanke, just announced its entry into the U.S. housing market, partnering with  New York-based Tishman Speyer Properties to build luxury condos in San Francisco. Changing demographics, pent-up demand and limited supply suggest that more housing is needed in the U.S., and savvy consumers are looking for new options in housing and lifestyle. The U.S. can expect to see about 1.3 million households newly formed each year for the next decade, making housing starts at an annual rate of around 900,000 inadequate; in the same way, interest rates for mortgages are very low at this moment. What else do developers from China see in the U.S. market? Is the suggested bubble in Chinese real estate encouraging local developers to move to the U.S.?

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The Future of Real Estate Investing Amidst Rising Prices

China’s own brand of a housing bubble has Beijing chasing its tail and struggling to catch it. Recently, rising prices led the government to introduce market-cooling measures and tighten its grip on the real estate sector, raising taxes by as much as 20% for transactions. The tax was first introduced in Beijing. But in a lot of smaller cities those measures were never as strict as in Beijing because local authorities wanted to protect the property market to ensure fiscal revenues.

Investors are watching the real estate market closely; if prices continue to rise it will put pressure on the economy as the government would be required to put restrictions on lending. Is this the beginning of a wave of distressed real estate investing? What types of developments will be the next big opportunities?

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