Lehman Was A Major Bangkok Landlord

[bingobongo]

the stupid will be seperated from their money........oh well..........good luck bagholders, some of you are going to need it

Lehman was a major Bangkok landlord

The company also is a financier and investor in several listed property developers, including Raimon Land Plc, Grande Asset Hotels and Property, and Ascon Construction.

In any case, Mr Krisada said the impact on the Bangkok property market could be substantial if the US bankruptcy court forces a liquidation of assets.

http://www.bangkokpost.com/170908_Business...p2008_biz35.php

[quiksilva]

As Patima said even if they went bust their biggest assets would be readily snapped up so apart from a couple of projects stalling or faltering the effect would be minimal.

Mercury Tower, Pacific Place 1 & 2 are 100% occupied fetching great rents = easy sale = zero impact on the property market except perhaps some happy investors.

Ital Thai Tower doing not so well, will be harder to sell but still definitely possible. Anyway it's not an entire building and represents a slight fraction of the market, again a sale here represents zero impact on the market.

Again, yes it all sounds big and scary but in comparison to total market size its small beer.

[bendix]

Not looking good for the guys who invested in the Regents Condo building on Suk Road, though, is it?

[glyph]

Lehman was bought by another company, and I'm not sure why you'd think that they were heading for bankrupcy.

[norrona]

Lehman was bought by another company, and I'm not sure why you'd think that they were heading for bankrupcy.

whose the other company mate??? cos all i've seen is they are bankrupt and nobody not even the FED want to step in

[churchill]

Some assets have been bought by Barclays UK , but nothing in Thailand as far as I know

[anthonyu]

Lehman was bought by another company, and I'm not sure why you'd think that they were heading for bankrupcy.

whose the other company mate??? cos all i've seen is they are bankrupt and nobody not even the FED want to step in

Think they meant parts of Lehman was bought by Barclays but that was after chapter 11.

[quiksilva]

Not looking good for the guys who invested in the Regents Condo building on Suk Road, though, is it?

No argument on that point, its not looking good for them at all.

[norrona]

Barclays Bank cherry picking, I don't think they'll want any half built/sold projects in thailand

[Rimmer]

UK bank Barclays has bought some of the core assets of US investment bank Lehman Brothers for $1.75bn (£1bn).

Lehman - the fourth-largest investment bank in the US - filed for bankruptcy protection on Monday.

The deal, which comes after a weekend when Barclays refused to buy all of Lehman, needs bankruptcy court backing.

BBC Business Editor Robert Peston had said earlier that Barclays would not be interested in acquiring Lehman's "toxic investments in the residential and commercial property markets".

[ray08]

As Patima said even if they went bust their biggest assets would be readily snapped up so apart from a couple of projects stalling or faltering the effect would be minimal.

Mercury Tower, Pacific Place 1 & 2 are 100% occupied fetching great rents = easy sale = zero impact on the property market except perhaps some happy investors.

Ital Thai Tower doing not so well, will be harder to sell but still definitely possible. Anyway it's not an entire building and represents a slight fraction of the market, again a sale here represents zero impact on the market.

Again, yes it all sounds big and scary but in comparison to total market size its small beer.

Problem is from my humble experience , when you have lots of "small beers " you end up drunk with a hangover

[bingobongo]

i posted this over two years ago on another thread but i am going to post it again, it applies to investments and emotions

emotions and money do not go well together (save emotions for sad movies and family occasions)

some of you are in different stages of the cycle whether it be due to ego, stupidity, conflict of interest or rational thought, but whichever, the outcome is going to be the same................Lehman is the tip of the iceberg, and yes LOS will also take it on the chin

Edited September 17, 2008 by bingobongo

[quiksilva]

You posted that very same chart two years ago huh? Wow, its all about the timing isn't it bongo?

Ray I wont disagree lots of small beers will always equals hangovers, but the operative word here is "lots" and we are not talking about a lot. Will some people be affected by Lehman's and AIG (they have a couple of residential plays here too), sadly yes I think they could (edit) but the extent to which they are effected remains to be seen.

I am not denying that the Thai residential market is subdued due to local political instability, but that does not mean there aren't any transactions being recorded, because there are. Volumes have declined but people are still buying.

Again I only report what I see and hear from my colleagues in residential, and again before more talk of conflicts of interest spout up Im in commercial & industrial (both are which are doing very nicely thanks).

Edited September 18, 2008 by quiksilva

[steveromagnino]

the only concern is for the not yet built assets that Lehman were supposed to be financing; the operating assets are super easy to dispose of, I can think off hand of several funds and people in Singapore or further abroad that just need to see the yield, do some due diligence and can take an operating asset very quickly.

However, the construction financing has more of an effect, and yes in the scheme of things it is not big, but it may have an impact. Again, I think people will take it on. What's not to like about individual deals; lots of firms want to cherry pick from the Lehman portfolio of assets. They just don't want to buy the entire thing.

Personally I think K-Tech's demise is a far more critical one for Thailand and that's been going on for what, a year?

[glyph]

"i posted this over two years ago"

It's the same old song, with a different tune. Your predictions are unerringly wrong.

[quiksilva]

the only concern is for the not yet built assets that Lehman were supposed to be financing; the operating assets are super easy to dispose of, I can think off hand of several funds and people in Singapore or further abroad that just need to see the yield, do some due diligence and can take an operating asset very quickly.

However, the construction financing has more of an effect, and yes in the scheme of things it is not big, but it may have an impact. Again, I think people will take it on. What's not to like about individual deals; lots of firms want to cherry pick from the Lehman portfolio of assets. They just don't want to buy the entire thing.

Personally I think K-Tech's demise is a far more critical one for Thailand and that's been going on for what, a year?

Agreed, there's plenty of investors circling the commercial markets here but a lack of decent opportunities, this could actually open up the market to new players dependent on the holding vehicles (eg foreign participation via type 4 property funds is possible as these can be legally 100% owned by foreign firms)

I hear all sorts of rumours about K Tech, I cant verify them though, so I wont post what I have heard, but none of it is good.

[thaihome]

"i posted this over two years ago"

It's the same old song, with a different tune. Your predictions are unerringly wrong.

I disagree. it's economics, everyone gets to be right once in their lifetime (as long as they sing the same tune for the their entire life)

Oh, and they don't die young

TH

Edited September 18, 2008 by thaihome

[thaihome]

As Patima said even if they went bust their biggest assets would be readily snapped up so apart from a couple of projects stalling or faltering the effect would be minimal.

Mercury Tower, Pacific Place 1 & 2 are 100% occupied fetching great rents = easy sale = zero impact on the property market except perhaps some happy investors.

Ital Thai Tower doing not so well, will be harder to sell but still definitely possible. Anyway it's not an entire building and represents a slight fraction of the market, again a sale here represents zero impact on the market.

Again, yes it all sounds big and scary but in comparison to total market size its small beer.

I found yesterdays Post with this on the first page of the Business section particularly sensationalist. it wasonly if you went further in that you found articles that pretty much repudiated everything this guy said.

TH

[jcon]

quicksilva or anybody in the business:

any thai companies who are cash rich/solvent who would be able to cherry-pick thailand's property assets the same way Barclay's did with Lehman's other assets? It's clear now because of Barclays' precident that Lehman can now be cherry-picked to death, unlike some of the other big ones who are (as of now) are a take-all or nothing deal.

[LaoPo]

Lehman was bought by another company, and I'm not sure why you'd think that they were heading for bankrupcy.

Really ?

Lehman Spurned KDB's Offer of $6.40 a Share, Min Says

Sept. 18 (Bloomberg) -- Lehman Brothers Holdings Inc. spurned Korea Development Bank's offer of $6.40 a share for a controlling stake in the weeks preceding its bankruptcy, the Korean bank's Chief Executive Officer Min Euoo Sung said.

The bid would have valued Lehman's broker-dealer operations and asset management unit at about 5 trillion won ($4.3 billion), Min told lawmakers in Seoul today. The price KDB proposed included an additional 30 percent premium for management control, he said, without disclosing how large a stake was sought.

Lehman, which traded as high as $66 this year, wanted $17.50 per share, causing the talks to collapse, (FYI: LEHMAN stopped trading at $ 0,13 cents) Min said. After KDB walked away, Lehman Chief Executive Officer Richard Fuld sought unsuccessfully to sell the 158-year-old securities firm to Barclays Plc and Bank of America Corp., and ended up filing the biggest bankruptcy in history.

``It would have been a favorable deal for us,'' said Min, 54. Under the proposed deal, KDB would have taken over Lehman's ``good assets'' in February 2009 after spinning off poor assets into a ``bad company,'' he said.

At $6.40 per share, Min's offer would have valued Lehman at $4.4 billion, based on the firm's 694.4 million shares outstanding. Min said Lehman was trading at between $15 and $17 during the talks.

``It's difficult to assess whether KDB's proposed price was reasonable or not at this point, given that Lehman could have taken a path to recovery after KDB took over,'' said Mo Jae Sung, who helps manage the equivalent of $1 billion at Hanwha Investment Trust Management Co. in Seoul. ``I doubt Lehman would have gone bankrupt if KDB had bought it at whatever price.''

`Horrible' Feeling

Lehman shares tumbled 45 percent to $7.79 on Sept. 9, amid reports that talks were collapsing. The stock fell another 6.9 percent the following day, after KDB confirmed that discussions with Lehman had ended.

Yesterday, two days after Lehman's bankruptcy filing, Barclays agreed to pay $250 million for Lehman's North American investment-banking business and another $1.5 billion for the firm's New York headquarters and two data centers.

Fuld, 62, told Lehman employees in a memo distributed internally that he feels ``horrible'' for what they've had to endure. Fuld sold shares that were worth $247 million a year and a half ago for less than $500,000 this week.

Min, a former Lehman executive, took the helm at KDB in June with a goal to make it Asia's third-biggest bank within five years. The state bank plans to sell some of its shares to the public next year.

Min Gets Scolded

Min came under fire today for attempting what South Korean lawmaker Hong Jae Hyong of the opposition Democratic Party called a ``ridiculous'' deal. ``You caused Korean banks to lose face globally,'' Hong said at a parliamentary session.

``Min was overzealous and unrealistic'' in pursuing the Lehman takeover, Jun Kwang Woo, chairman of South Korea's Financial Services Commission, told a parliamentary session yesterday in Seoul. ``The possibility of a Lehman deal wasn't big from the very beginning.''

The KDB CEO's intention was ``still genuine,'' said Jun, who worked with Min at Woori Finance Holdings Co. in Seoul and recommended he lead KDB. Chief executive officers at state-run agencies are appointed by the country's president.

``You can't penalize Min for having considered the Lehman purchase when buying a large global bank is the only way for KDB to become a global investment bank,'' said Kim Sang Jo, a professor of international trade at Hansung University in Seoul. ``The government should delegate full decision power to the CEO if Korea is really serious about cultivating a global bank.''

Lehman Holdings

The government plans to set up a holding company for KDB and its affiliates by the end of this year and sell a 49 percent stake in the parent company by 2010. The remaining 51 percent stake will be sold by 2012 under President Lee Myung Bak's drive to sell state assets in financial firms to make the industry more market-friendly.

Min was also questioned today by lawmakers on his holdings of stock options in Lehman. Min, who headed Lehman's Seoul branch before joining KDB, said he was granted about 59,000 Lehman shares in ``stock awards.''

``I told the board that I would give up the stock awards if the deal successfully closed,'' Min said today. ``I believe I've done everything I could in preventing any conflict of interest.''

--Bloomberg

LaoPo

[thaihome]

quicksilva or anybody in the business:

any thai companies who are cash rich/solvent who would be able to cherry-pick thailand's property assets the same way Barclay's did with Lehman's other assets? It's clear now because of Barclays' precident that Lehman can now be cherry-picked to death, unlike some of the other big ones who are (as of now) are a take-all or nothing deal.

Wouldn’t they have to be in receivership like Lehmans to be available for cheery picking? Other then Grand Asset with Regency, is there another developer being wound up?

Did I miss something? Did the Bangkok property market collapse and all the developers go bankrupt this afternoon while I was working?

TH

[midas]

As Patima said even if they went bust their biggest assets would be readily snapped up so apart from a couple of projects stalling or faltering the effect would be minimal.

Mercury Tower, Pacific Place 1 & 2 are 100% occupied fetching great rents = easy sale = zero impact on the property market except perhaps some happy investors.

Ital Thai Tower doing not so well, will be harder to sell but still definitely possible. Anyway it's not an entire building and represents a slight fraction of the market, again a sale here represents zero impact on the market.

Again, yes it all sounds big and scary but in comparison to total market size its small beer.

Excuse me quiksilva but I will believe this Patima person when I see it !

It is typical real estate agents hype..................where are potential

buyers going to borrow the money in this current investment climate

which is getting worse every day( today the Russian stock market stayed closed )

[ray08]

You posted that very same chart two years ago huh? Wow, its all about the timing isn't it bongo?

Ray I wont disagree lots of small beers will always equals hangovers, but the operative word here is "lots" and we are not talking about a lot. Will some people be affected by Lehman's and AIG (they have a couple of residential plays here too), sadly yes I think they could (edit) but the extent to which they are effected remains to be seen.

Quicksilver , i think if you look at recent events , PAD rallies , Inflation figures , UK reccesion fears,USA reccesion fears, K-Tech , Thai baht , New Prime minister ( will see where that goes ) residential property prices down US,UK ,OZ , etc ,World stock markets down

There are a lot of factors at play both internally and externally from Thailand that are all negative .

With all that has happened from what i read ,the Thai market has held up well , which is against the trend ,eventually something has to give , and the market has to adjust to the world climate , the 3 main factors in play are ,

Unstable Government

World Credit Crunch

Inflation

I am no Doomsayer as i myself have a substancial investment here , but in my view a bit of caution ,in paticular in areas like residential Condo's would be a good idea

[steveromagnino]

quicksilva or anybody in the business:

any thai companies who are cash rich/solvent who would be able to cherry-pick thailand's property assets the same way Barclay's did with Lehman's other assets?

Wouldn’t they have to be in receivership like Lehmans to be available for cheery picking? Other then Grand Asset with Regency, is there another developer being wound up?

No you are misreading; the question is now that Lehman is up for grabs, are any of the Thai property companies going to consider picking up their Lehman assets.

I would say TCC are relatively cash rich; the office portfolio is going to end up with some sort of fund with low risk yield numbers driving the decision.

The Lehman assets via Grande Asset that would not have a reliable revenue stream IMHO are Sails (worth it only for the land, as the structure probably have to start again, don't want to take on responsibility for the buyers although could give people an option to pay another 50% more to keep their unit; prices Sails sold at you could not make money on now unless you got the land close to free); Regent (again sold too cheap, K-Tech construction work might be not possibly to rely on, very very hard to find a new main contractor who will take on the liability for the work).

The Lehman 'assets' via Raimon Land (insofar as Lehman was supposed to finance the building of these projects) include Northpoint/Lofts/River (all mostly sold, so coming in as some sort of financier, would need to come in quite quick, probably highly likely the project costs are in excess of original project projection for all 3, cannot up the price much as the revenue stream is locked in already since the units are sold, the slower to come in the harder it gets for the property developer to stay on their feet) and 185 (this one nothing has started on it, so the vultures are already circling this absolutely prime site for sure, there are probably 5-8 property developers I can think of straight away that would be willing to make a play for this IF Raimon Land need the cash flow to do the Northpoint/Lofts/River projects....and Lofts Southshore (this one is early days yet, still flexibility to play with the pricing and so not a bad one to acquire).

The office buildings cannot see them being a problem, what's not to like and plenty of funds in the region cash rich and looking to buy.

[jcon]

Thanks steve, you interpreted my post as I intended it to be understood.

Commercial office space, I'd say would be the first thing to snap up (as you stated)....

You refer to 185, is that 185 Rajdamri? So nothing is going on there? Had they "sold" units yet? Wasn't that supposed to be high-end? That project could end up being a disaster...

[bkkjames]

Thanks steve, you interpreted my post as I intended it to be understood.

Commercial office space, I'd say would be the first thing to snap up (as you stated)....

You refer to 185, is that 185 Rajdamri? So nothing is going on there? Had they "sold" units yet? Wasn't that supposed to be high-end? That project could end up being a disaster...

Nothing going on there except removing what is left of the former Cambodian Embassy. A sure sign that this is gonna be a disaster,,,

[philstone]

Excuse me quiksilva but I will believe this Patima person when I see it !

It is typical real estate agents hype..................where are potential

buyers going to borrow the money in this current investment climate

which is getting worse every day( today the Russian stock market stayed closed )

The people in the know Know that the rich Russians and coming to Thailand to buy up all the Prime Real Estate Buy now before the huge price increase.

[bingobongo]

russians arent going to buy anything as they are having their own financial problems (as the creidt markets are freezing globally), besides why buy in a 3rd world SE country with policital crisis when there are 150+ other countries to choose from......................

buy hard assets that people can use (gold, silver, oil) not overpriced, overbuilt poorly constructed LOS capital traps

Russian market woes not all over - Troika banker

http://www.reuters.com/article/marketsNews...J47443420080919

Edited September 20, 2008 by bingobongo

[glyph]

Robert Lutz blew top jobs at both GM and Chrysler. When asked about it, he laughed, "I'm often wrong, but seldom in doubt." bingobongo goes beyond that. When predicting the crash of the Thai real estate market, he's always worng, and never in doubt.

[quiksilva]

As Patima said even if they went bust their biggest assets would be readily snapped up so apart from a couple of projects stalling or faltering the effect would be minimal.

Mercury Tower, Pacific Place 1 & 2 are 100% occupied fetching great rents = easy sale = zero impact on the property market except perhaps some happy investors.

Ital Thai Tower doing not so well, will be harder to sell but still definitely possible. Anyway it's not an entire building and represents a slight fraction of the market, again a sale here represents zero impact on the market.

Again, yes it all sounds big and scary but in comparison to total market size its small beer.

Excuse me quiksilva but I will believe this Patima person when I see it ! It is typical real estate agents hype..................where are potential

buyers going to borrow the money in this current investment climate which is getting worse every day( today the Russian stock market stayed closed )

What hype?

The properties are well occupied, fetching good rents, with quality tenants, and are likely to offer investors very reasonable returns (in line with similar properties in the market). Why wouldn't they sell? I personally receive inquiries from international and local funds looking to invest in commercial property every week.

For example: there is an awful lot of money coming out of the Middle East in the form of Sharia based investment funds looking to find a home in commercial property. Plus then you have the usual suspects like the Government Pension Fund and other local families who are keen commercial property players, (just so long as its freehold) and yes they can get funding. There are others of course but I refuse to tell all here for obvious reasons.

It would astound you to learn of the amount of money out there looking for a home in real estate in Thailand. Finding players with the capital required to participate in a 1-2 bn Baht investment project has never been a problem in Bangkok's investment class property market, (in fact most of my clients have a minimum lot size requirement of 10 million US$) rather it has been the lack of investment grade assets for sale, at a reasonable price, that has always been the toughest nut to crack.

Most of the best commercial properties here are owned by wealthy Thai families who have absolutely no need or desire to sell their beloved assets, so so this is why I am so confident that these properties will sell easily.

Edited September 22, 2008 by quiksilva