Chinese developers ‘walking away’ from Australian projects amid lack of finance

A landmark Sydney property at Circular Quay, bought by Chinese commercial property giant Dalian Wanda Group, is now flanked by blank hoardings.

At one point they proudly displayed signs of the company’s vision for its One Sydney project — a billion-dollar development consisting of two massive towers.

J Capital research managing partner Tim Murray said the party is now over for such China-backed megaprojects.

“Chinese developers that have been overpaying for properties in Australia are now struggling to find the finance to closing those deals and they’re actually walking away from large deals and large deposits,” he observed.

Chinese authorities, anxious to stem the outflow of money from China and stabilise the yuan, have tightened restrictions on foreign investment by their companies.

The concern is that China’s financial stability is threatened by the capital outflows, which are being exacerbated by property developers.

David Chin, the managing director of advisory firm Basis Point, said the Chinese Government regards the overseas property buying spree as irrational.

Hong Kong developer Country Garden paid a record $400 million for this parcel of land on the outskirts of Melbourne, just a few months ago.

There is keen interest in whether any of the planned 4,000 homes will be built soon.

Property development frowned upon

The Chinese Government’s new directive encourages investment in resources, agriculture and technology.

But property investments such as hotels and residential, as well as sports and film investments, are now on the restricted list.

Dalian Wanda is one of the companies Chinese authorities are watching more closely, and the Sydney One site is clearly a project Chinese authorities would have considered restricted.

Mr Chin said the effect of the restrictions on individual projects will depend on how far advanced they are.

“Some developers who have perhaps not started projects yet might be looking to sell their sites, on sell, or just wait and see attitude and just hold it,” he said.

“Others that have already started, chances are they would have already got funding for it and it will go through the whole process and in that process they would have already presold a substantial amount of off-the-plan sales.”

If the developers have not yet lined up their funding, Mr Murray said it is unlikely that Australian banks will help them out of what could be a terrible bind.

“Right now, in order to get a construction loan from an Australian bank you really have to have presold a hundred per cent of the building and none of that can be to foreign buyers,” he said.

“Now, a Chinese property developer who may be in trouble has probably already sold 50 per cent to foreign buyers.

“So they don’t meet the criteria unless of course they unwind those transactions and then pre-sell it to Australian residents.”

That is why some Chinese developers are searching for non-bank funding.

Further restrictions may be added

Adding to the uncertainty is this month’s Communist Party congress where there could be major changes in the party’s leadership and the makeup of its top decision making body, the Politburo Standing Committee.

“There is a view that capital controls will be further tightened after the party congress. that it is a topic for discussion at the Party Congress,” Mr Murray said.

Tim Murray said the Yuan may come under pressure again as US interest rates and the dollar rise, and Chinese property prices soften after a strong run.

It could also herald the return of some investors looking for a bargain.

“I think the capital restrictions are effective on property developers because that’s large loans through large banks and other equity controls that the Government can put in place,” Mr Murray said.

“However, for the smaller investor buying properties, it could well be that they’ll return to the market in 2018.”

Chinese property developers, which snapped up a massive 38 per cent of residential development sites last year, will not vanish completely either.

They may be forced to search some of Australia’s smaller, cheaper cities and regional tourist centres.

Mr Murray said the tables have well and truly turned.

“Australian developers have been sitting on the sidelines, looking at the crazy prices that have been paid for development sites,” he said.

“Now they’re thinking the time for them to return to the market is coming back.”

Posted in ABC

UN Security Council unanimously approves new sanctions on North Korea

The United Nations Security Council on Monday unanimously approved a new round of sanctions on North Korea, one week after the country conducted its sixth and strongest nuclear test to date.

The new sanctions ban 90 percent of North Korea’s publicly-reported exports and cap the amount of oil the country is able to import, according to a U.S. official familiar with the negotiations.

“We are very pleased with this package,” the official said of the resolution, even though it required U.S. concessions to China and Russia to win approval. “This is the strongest set of sanctions that the Security Council has imposed. It represents yet another major step.”

The official defended the U.S. mission from critics who say the sanctions were watered down, arguing an early draft from the U.S. was given to the press to place pressure on any who might seek to soften the sanctions. The final resolution was the result of “tactical calls” to “get strong results” and get everyone on the Security Council on board, the official added.

Following the vote, U.S. Ambassador to the United Nations Nikki Haley portrayed North Korea as increasingly isolated.

“It is dark and it’s getting darker,” Haley said. “The entire international community is united against its dangerous, illegal actions.”

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Haley further addressed the North Korean regime directly, saying it is not too late to change course.

“We don’t take pleasure in further strengthening sanctions today,” said Haley. “We are not looking for war. The North Korean regime has not passed the point of no return … If it proves it can live in peace, the world will live in peace with it.”

“The choice is theirs,” she added.

Among the provisions that were in a draft proposal, but not the final resolution were a total oil embargo and a freeze on the assets of both North Korean leader Kim Jong Un and the national airline.

Instead, the resolution caps refined oil imports at 2 million barrels and crude oil imports at their current levels. It also bans North Korean exports of textiles, a $726 million industry, and phases out North Korea’s overseas labor program, which sends 93,000 North Koreans abroad to work in near slave conditions and send their pay back to the regime.

Haley addressed the question of how to enforce the sanctions, saying it would present a challenge but expressing optimism given Chinese cooperation on the resolution.

“We all know these steps only work if all nations implement them completely and aggressively,” said Haley, adding the resolution “would not have happened without the strong relationship between President Trump and President Xi, and we greatly appreciate both teams.”

Prior to the approval, Trump and the U.S. treasury secretary threatened to impose unilateral sanctions against any country that trades with North Korea if the Security Council was unable to come to an agreement.

Though Russia voted in favor of the resolution on Monday, President Vladimir Putin earlier downplayed the effectiveness of sanctions given North Korea’s unrelenting nuclear ambitions.

“In North Korea they will eat grass but still not give up this [nuclear and ballistic missile] program,” said Putin.

Posted in ABC

Irma death toll in US rises to 11; Florida Keys face ‘devastation’

As evacuated Floridians sit in bumper-to-bumper traffic to head home and face the aftermath of Irma, the weakened storm is still bringing wind and rain to the Southeast.

Irma, which tore a path of destruction across the Caribbean and through Florida, has caused at least 11 deaths in the United States and left about 6.7 million people without power in five states.

Irma was downgraded to a post-tropical cyclone this morning and is expected to bring heavy rain today to the Carolinas, Kentucky and Tennessee. Irma was located about 65 miles southwest of Atlanta this morning.

Heavy rain in Georgia, South Carolina and Jacksonville

Irma moved north Monday, bringing heavy rain and wind through the northern Florida city of Jacksonville and then Georgia and South Carolina.

Wind gusts reached 64 mph in Atlanta, and the coastal city of Brunswick, Georgia, saw over 6 inches of rain.

Charleston, South Carolina, saw a nearly 10-foot storm surge. Five to 6 inches of rain fell in the area and winds reached 66 mph.

Upper Keys and Miami Beach residents permitted to return home

The Florida Keys have been cut off from the mainland for days since Irma made landfall on the low-lying islands Sunday morning as a Category 4 hurricane, bringing 130 mph winds and a storm surge of 10 feet. It was the first Category 4 landfall in Florida since 2004.

Florida Gov. Rick Scott said the storm left “devastation” on the Keys, which were under mandatory evacuation orders during Irma.

Officials finally this morning opened entry into the Upper Keys for residents in Key Largo, Tavernier and Islamorada, up to mile marker 73, allowing residents to return home and see the damage for themselves.

Dozens of eager Keys residents parked their cars along U.S. 1 Monday, staying there through the night to make sure they could get onto the Keys when access was granted, ABC Miami affiliate WPLG-TV reported.

While the Keys were under mandatory evacuation orders as Irma neared, not everyone left. Florida Director of Emergency Management Bryan Koon estimates that about 10,000 people remained in the Keys during the storm, according to the Miami Herald.

Further north, Miami Beach residents will be permitted to return at 8 a.m. today.

Storm pummels Naples and Miami

After Irma left the Keys Sunday morning, it moved north, passing over Naples, which recorded a 142-mph wind gust. The city also saw nearly 12 inches of rain and a 7-foot storm surge. Farther north, wind gusts reached 94 mph in Lakeland and up to 90 mph in the Tampa Bay area.

In Miami, which saw winds up to 99 mph, resident Joe Kiener told ABC News he has endured multiple hurricanes in the Caribbean but had never experienced a storm as brutal as Irma.

“I’ve been in Miami Beach for two years, which is prone to flooding, but this is completely out of the norm,” Kiener said.

Kiener boarded up his house and is staying at a high-rise hotel in Miami. He said he had to move down to the lobby after his hotel room windows took a beating from the strong winds.

“The windows started cracking, and these are massive-impact windows. They were exposed 12 hours of continuous heavy winds. At one point in time, one of them started splintering and that’s when I lost my nerve and said, ‘I’m leaving,'” he said. “It psyches you out; it’s just the endless hallowing and pounding of the wind.”

Fatalities in Florida, Georgia and South Carolina

At least seven people, including a sheriff’s deputy, died of storm-related injuries in Florida as the hurricane barreled across the state.

One person was killed in Monroe County, which includes the Florida Keys. The man was killed after he lost control of a truck that carried a generator as winds whipped at tropical-storm strength, officials said.

Two others, a sheriff’s deputy and a corrections officer, died from a two-car crash in the rain in Hardee County, which is about 60 miles inland from Sarasota, officials said.

In Winter Park, near Orlando, a man was electrocuted by a downed power line Monday morning, according to the Winter Park Police Department. He was pronounced dead at the scene after investigators found him lying in the street, police said.

Another person died from carbon monoxide poisoning from improper use of a generator in Miami-Dade County, the mayor said.

Another person died in Hillsborough County while cutting fallen tree branches.

Another fatality was from a car crash in Orange County in central Florida.

At least three people have died in Georgia as a result of the storm. In Sandy Springs, a man died while lying in bed after a large tree broke and fell on his home, Sandy Springs Mayor Rusty Paul announced on Facebook.

In Forsyth County, a female passenger died after a downed tree struck her vehicle, the sheriff’s office said.

A third death was reported in Worth County.

In Abbeville County, South Carolina, a 57-year-old man was killed after a tree limb fell on him.

At least 37 others died from Irma in the Caribbean, including at least 10 in Cuba.

Millions without power amid widespread evacuations

At least 6.7 million customers are without power in Florida, Georgia, North Carolina, South Carolina and Alabama this morning, including more than 5.6 million accounts in Florida alone.

Eric Silagy, president and CEO of Florida Power & Light, warned Monday that “people need to be prepared for some prolonged and extended outages.”

About 6.5 million Floridians had been ordered to evacuate as Irma neared, and some residents of Georgia and South Carolina were under evacuation orders as well.

Some chose to go to shelters, while others decided to hunker down at home to ride out the storm.

A Naples resident told ABC News she was turned away from two shelters before she and her 10-year-old son were finally accepted at one.

“We have a dog and there were not that many shelters that accepted dogs,” she said, adding, “We didn’t want to be that far away from our home.” While she and her son stay inside the shelter, her husband is hunkering down with their dog at home.

President Donald Trump approved a “major disaster” declaration in Florida on Sunday, authorizing “federal funding to flow directly to Floridians impacted by Hurricane Irma and reimburs[ing] local communities and the state government to aid in response and recovery from Hurricane Irma,” state officials said.

Gov. Scott said nearly 30 states had deployed personnel and resources to help with the response to Irma.

Posted in ABC

S. Korea braces for another possible N. Korea missile test

South Korea is closely watching North Korea over the possibility it may launch another intercontinental ballistic missile as soon as Saturday when it celebrates its founding anniversary.

Seoul’s Unification Ministry spokeswoman Eugene Lee said Friday that Pyongyang could potentially conduct its next ICBM tests this weekend or around Oct. 10, another North Korean holiday marking the founding of its ruling party.

North Korea has previously marked key dates with displays of military power, but now its tests appear to be driven by the need to improve missile capabilities.

The North is just coming off its sixth and the most powerful nuclear test to date on Sunday in what it claimed was a detonation of a thermonuclear weapon built for its ICBMs. The country tested its developmental Hwasong-14 ICBMs twice in July and analysts say the flight data from the launches indicate the missiles could cover a broad swath of the continental United States, including major cities such as Los Angeles and Chicago, when perfected.

North Korea fired the ICBMs at highly lofted angles in July to reduce ranges and avoid other countries. But South Korean officials say the next launches could be conducted at angles close to operational as the North would seek to test whether the warheads survive the harsh conditions of atmospheric re-entry and detonate properly.

In Washington, President Donald Trump reiterated Thursday that military action is “certainly” an option against North Korea, as his administration tentatively concurred with the pariah nation’s claim to have tested a hydrogen bomb. A senior administration official said the U.S. was still assessing last weekend’s underground explosion but so far noted nothing inconsistent with Pyongyang’s claim.

“Military action would certainly be an option,” Trump told a White House news conference. “I would prefer not going the route of the military, but it’s something certainly that could happen.”

Pressed on whether he could accept a scenario in which the isolated nation had nukes but was “contained and deterred,” Trump demurred. “I don’t put my negotiations on the table, unlike past administrations. I don’t talk about them. But I can tell you North Korea is behaving badly and it’s got to stop,” he said.

North Korea broke from its pattern of lofted launches last month when it fired a powerful new intermediate range missile, the Hwasong-12, over northern Japan. North Korean leader Kim Jong Un then called the launch a “meaningful prelude” to containing the U.S. Pacific island territory of Guam and called for his military to conduct more ballistic missile launches targeting the Pacific Ocean.

Meanwhile, Sweden urged its citizens Friday to refrain from unnecessary trips to North Korea.

The announcement by the Swedish Foreign Affairs Ministry came hours after Mexico’s government said it declared North Korean Ambassador Kim Hyong Gil as persona non grata and ordered him to leave the country within 72 hours in response to Sunday’s nuke test.

The United States has already banned Americans from traveling to North Korea following the death of Otto Warmbier, a 22-year-old college student from Ohio who was released from North Korea in June in a coma after being detained there for more than a year.

Sweden has had diplomatic relations with North Korea since 1973. The Swedish Embassy in Pyongyang also provides consular services for the United States, Australia and Canada.

Also Friday, French President Emmanuel Macron and Chinese President Xi Jinping discussed North Korea by phone. Macron called for more pressure on North Korea to bring the country back to the negotiating table, and China’s official Xinhua News Agency described Xi as being “adamant” about the denuclearization of the peninsula while also expressing hope that France would play “a constructive role in easing the situation and restarting dialogue.”

South Korean experts say that the launch was Pyongyang’s attempt to make missiles flying over Japan an accepted norm as it seeks to test new projectiles in conditions close to operational and win more military space in a region dominated by enemies.

Kim, a third-generation dictator in his 30s, has conducted four of North Korea’s six nuclear tests since taking power in 2011. His military has maintained a torrid pace in testing weapons, which also include solid-fuel missiles built to be fired from road mobile launchers or submarines.

In accelerating his pursuit of nuclear weapons targeting the United States and allies South Korea and Japan, Kim is seen as seeking a real nuclear deterrent to help ensure the survival of his government and also the stronger bargaining power that would come from it.

Washington, Seoul and Tokyo have been pushing for stronger sanctions to punish Pyongyang over its nuclear activities, such as denying the country oil supplies. China and Russia have been calling for talks, saying sanctions aren’t working against North Korea.

Posted in ABC

Prince William and Duchess of Cambridge expecting third child

Prince William and his wife Kate, the Duchess of Cambridge, are expecting their third child, Kensington Palace has announced.

The announcement said the Queen and members of both families were “delighted” by the news.

Officials said the Duchess of Cambridge was suffering from Hyperemesis Gravidarum, a form of severe morning sickness, and would not carry out her engagements on Monday (local time).

The Duchess suffered from the sickness in her previous pregnancies and she is being cared for at Kensington Palace, the statement said.

William and Kate, both 35, already have two children: Prince George and Princess Charlotte, who are aged four and two respectively.

No details were immediately available about when the third baby is due.

The announcement came as a surprise, as there had been little indication that the Duchess of Cambridge was pregnant.

Their third child would be fifth in line to the British throne and if the child is a boy, his arrival will be historic because he would not displace his big sister in the line of succession.

William is a grandson of the Queen and the eldest son of Prince Charles, who is the first in line to the throne.

 

Posted in ABC