China urges real estate project acquisitions to help struggling developers – state media


A construction site developed by Kaisa Group Holdings is pictured in Shanghai, China on December 7, 2021. REUTERS / Aly Song

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SHANGHAI, Dec.20 (Reuters) – China urges large private and public real estate companies to acquire real estate projects from struggling developers to reduce the risk of debt build-up destabilizing the economy, China said on Monday. Securities Journal.

The People’s Bank of China (PBOC) and the China Banking and Insurance Regulatory Commission (CBIRC) recently issued an advisory to financial institutions, urging them to step up their financial support for such acquisitions, the newspaper reported.

In recent months, Chinese regulators have eased funding restrictions in the real estate sector slightly, to prevent debt risks from spreading from struggling developers, including China Evergrande Group (3333.HK) and Kaisa Property. Holdings (2168.HK).

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Regulators are urging Chinese banks to actively provide loans to finance acquisitions of projects owned by cash-strapped developers, and to avoid cutting or withdrawing loans to these companies, the China Securities Journal reported.

But only the acquisition of real estate projects, rather than the acquisition of stakes in struggling developers, would be encouraged, the newspaper said, citing unidentified sources.

Meanwhile, developers without financial problems are also encouraged to issue bonds to finance such acquisitions, and the PBOC urges financial institutions to invest in such debt instruments, according to the newspaper.

Developers including China Merchants Shekou Industrial Zone Holdings Co (001979.SZ) plan to issue debt securities through the short-term interbank market to fund mergers and acquisitions, local media reported.

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Reporting by Samuel Shen and Andrew Galbraith; Editing by Kenneth Maxwell

Our Standards: Thomson Reuters Trust Principles.


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