• Property Shortlist
  • 0
Chinese property developer bonds lapped up by investors
4 Sep

Investors simply can’t get enough of dollar bonds sold by China’s property developers, Bloomberg reports.

The investors are being lured in by Chinese property developers’ stronger earnings and improving credit profiles.

For perspective, notes sold in July and August by Chinese developers attracted orders 6.3 times the issue size, compared with 2.5 times in May and June.The firms are currently making the most of better sentiment all-round, with bond sales rising to a record $35.2 billion this year.

The chief investment officer for Asia-Pacific fixed income at Invesco Hong Kong Ltd, Ken Hu said: “In China, we still like the property sector”. He added that the sales of property companies and their cash flows are pretty strong, whilst their inventory level have also been improving.

The rejuvenated Chinese property bond market has driven Asian high-yield issuance to a peak of $39bn in 2017, with developer debt about 60 percent of that total.

Building companies’ fundamentals have been burnished in 2017, with Moody’s Investors Service saying it sees the number of negative outlooks in the sector declining slightly over the next six to 12 months. According to calculations based on earnings reports, ten leading developers that have reported first-half results saw gross margins expand to an average 30.2%.

Join our newsletter

  • Connect with Property International on LinkedIn
  • Follow Property International on Twitter
  • Like Property International on Facebook
  • Connect with Property International on Google Plus