Our pick of headlines this week impacting commercial real estate in the emerging markets.
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Headlines:
Latin America
Parque Arauco reported on Wednesday that it completed the issuance of bonds in the Chilean market for UF 3 million, equivalent to approximately US$ 114 million. "This operation will allow it to refinance its upcoming short- and medium-term maturities and, at the same time, maintain a solid financial position," the company explained. Each of the two placements were oversubscribed by a factor of 2.2 and 2.9, respectively. The first was valued at $57 million with a 10-year term and rate of 3.74% + UF (i.e., inflation measurement in Chile). The second for $57 million with a 5-year term and rate of 3.64% + UF.
The National Port Authority (APN) said in a statement late on Friday that it has requested the annulment of its own decision in February 2021 that granted Cosco exclusivity, through a judicial process. The $3.5 billion megaport hopes to become a hub in the South American Pacific, but has posed a challenge for the United States and Europe as they seek to stop the Chinese rise in Latin America. On Friday, Peru's government awarded a $405 million construction contract for another port to a second Chinese company, Jinzhao.
Lopez Obrador has told the White House that Washington should spend billions each year to alleviate poverty in Latin America, ease sanctions on the far-left governments in Venezuela and Cuba and grant legal status to millions of Mexicans living in the United States. Without such sweeping reforms, though, "the flow of migrants… will continue," Lopez Obrador said.
The president, who leaves office later this year, was also pressed on several domestic issues in the interview, notably a recent scandal in which he revealed the personal phone number of a reporter. When asked why he would do such a thing in a country where reporters are frequently harassed and murdered, Lopez Obrador said he "had no intention of harming her," but was "responding to a libel."
Africa
The launch of the Hilton Garden Inn in Nambia is a 174-key hotel in the central business district of the capital city within 500 meters of the Independence Museum and the Craft Market. The property is Hilton’s second hotel in Nambia.
Zambia said on Monday it had reached agreement with a group of private creditors on restructuring $3 billion of its international bonds in a major step that brings the country closer to emerging from its long-delayed debt rework. Zambia defaulted more than three years ago and is reworking its debt under the Common Framework, a G20 platform to bring together big creditors like China and the traditional group of developed creditor nations, known as the Paris Club, to ensure swift and smooth debt overhauls for low-income countries. Zambia is seen as a test case. This deal mirrors a similar one struck in 2023 which was derailed after being rejected by creditors.
The “U.S.- South Africa Bilateral Relations Review Act” is expected also to pass a more formal roll call vote in the committee on Wednesday and then to move to the full House of Representatives. Republican Scott Perry commented on the bill and an amendment, “South Africa’s foreign policy has long ceased to reflect its stated stance of nonalignment, and now directly favors the PRC, (China) the Russian Federation, and Hamas, a known proxy of Iran, and thereby undermines United States national security and foreign policy interests. Why then must we continue to send money to a country that clearly hates our allies and consorts with our enemies?”
Southeast Asia
America’s PepsiCo will build a food processing factory in the northern province of Ha Nam with a total investment of $90 million. It will also pour more than $300 million into building a beverage manufacturing factory in the southern province of Long An. Both factories will be powered by renewable energy. Construction is scheduled to begin in early 2024 and be completed by the second half of 2025. PepsiCo made its first foray into Vietnam in 1994 by forming a joint venture with IBC International Beverages Company.
Founded in 1991 by Sternlicht and future Greystar boss Robert Faith, Starwood has $115 billion in assets under management and invests in global real estate through a series of co-mingled opportunity funds and the non-listed Starwood REIT. ESR is the leading real estate platform in Asia Pacific with important market positions in logistics and data centers. ESRT is listed on the Hong Kong Stock exchange with an AUM exceeding $30 billion with properties across the region including in China, Japan, South Korea, Singapore, India, Vietnam, Australia, and Hong Kong. The acquisition price is undisclosed for the 10.7% interest previously held by Redwood Investments.
Amsterdam-based Bouwinvest Real Estate Investors has invested $75 million in a CapitaLand Investment fund targetting serviced residence and co-living opportunities across Asia Pacific in a bet on a rebound in Asia’s lodging market. The Dutch real estate investment manager said on Monday that it has committed the cash to CapitaLand Ascott Residence Asia Fund II (CLARA II), a $600-million value-add lodging vehicle, through its Bouwinvest Asia Pacific Mandate, after CapitaLand had announced the fund last month.
