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Real estate stocks help China shares rise on relaxed residency curbs – Financial Post

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SHANGHAI — China stocks rose on Thursday, aided by strong gains in real estate firms as Beijing rolled out measures to promote urbanization.

** The CSI300 index rose 0.4%, to 4,007.61, by the end of the morning session, while the Shanghai Composite Index gained 0.4%, to 2,992.41.

** China scrapped restrictions on household registration permits for cities under 3 million population, and comprehensively loosened such curbs for cities of 3 to 5 million residents, according to a document issued by the cabinet.

** In April, China said it would relax residency curbs in many of its smaller cities this year and increase infrastructure spending.

** The CSI300 real estate index rallied 2.7%, led by Jiangsu Zhongnan Construction Group with a gain of 6.2%.

** Easing norms for urban residency will promote urbanization and boost housing demand, said Yuan Hao, an analyst with Huachuang Securities, in a report.

** On the trade front, China on Wednesday said both sides’ economic and trade teams were in close communication about detailed arrangements for the phase one deal’s signing and other follow-up work.

** Around the region, Japan’s Nikkei index was up 0.45%.

** The yuan was quoted at 6.9932 per U.S. dollar, 0.06% weaker than the previous close of 6.989.

** The largest percentage gainers in the main Shanghai Composite index were Hylink Digital Solution Co Ltd, up 10.03%, followed by Luoyang Glass Co Ltd, gaining 10.03%, and Inly Media Co Ltd, up by 10.02%.

** The largest percentage losers in the Shanghai index were Harbin Gong Da High-Tech Enterprise Development Co Ltd , down 5.19%, followed by Shanghai Zhixin Electric Co Ltd, losing 5.04%, and Shenzhen Geoway Co Ltd , down by 5.03%.

** As of 04:03 GMT, China’s A-shares were trading at a premium of 26.26% over the Hong Kong-listed H-shares. (Reporting by Luoyan Liu and Brenda Goh; Editing by Subhranshu Sahu)

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Boeing Prepares Deeper Cuts From Executive Ranks to Real Estate – BNN

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(Bloomberg) — Boeing Co. is thinning its corps of vice presidents and winnowing real estate holdings, including a splashy outpost near the Massachusetts Institute of Technology, as the planemaker works furiously to counter plunging aircraft sales and mounting costs for the grounded 737 Max.

About 170 midlevel executives, 70 of them based at Boeing’s commercial airplane division, are taking a buyout offer that includes a year’s salary, according to people familiar with the matter. The first of the vice presidents and senior managers to accept the terms will leave the company Oct. 2, followed by a second wave later in the year.

The cuts go deeper and wider than the 19,000 jobs pared earlier this year when the coronavirus pandemic sent air travel into an unprecedented collapse. Stemming the cash outflow has become a paramount concern for Boeing, and the company is also wringing savings from investments in futuristic technology as well as its businesses and organizational structure.

Boeing is shedding assets “like King Midas in reverse,” said Richard Aboulafia, an aerospace analyst with Teal Group.

The biggest and most controversial of the cost-saving measures mulled by Boeing would be to build the 787 Dreamliner at a single site, most likely its South Carolina factory, and close a second final-assembly line in Everett, Washington.

The decision on production amid a steep plunge in wide-body jet deliveries is expected to be announced as soon next month, according to two of the people, who asked not to be named because they weren’t authorized to speak publicly.

Au Revoir Chateau

Boeing also is jettisoning holdovers from the days when it was flush with cash. One example: a lavish executive retreat, modeled after a French chateau, in the countryside near St. Louis. The Boeing Leadership Center is closing indefinitely, with 81 workers from chefs to waiters losing their jobs, according to a WARN report.

Chief Executive Officer Dave Calhoun and Chief Financial Officer Greg Smith warned in July that the company faced a shrinking market that’s likely to remain depressed for years. The Chicago-based company could see a staggering $23.3 billion cash outflow this year, according to an estimate by Melius Research analyst Carter Copeland, before the resumption of Max deliveries starts to fill the company’s coffers in 2021.

Smith, who’s orchestrating the shakeup, said in August that Boeing needs to be “clear-eyed about the market” and how to mitigate its risks.

Boeing signaled last month that a new voluntary exit offer would take workforce reductions well beyond the 10% it initially targeted. The package was aimed at the commercial aircraft and services businesses, the most damaged by the pandemic, as well as the corporate operation, which employed 37,862 people at the start of the year. Fewer employees in the company’s defense, space and government business were eligible for the buyouts.

NeXt Out

Boeing is trimming research and development spending in part by phasing out Boeing NeXt, a two-year-old unit focused on futuristic concepts from flying cars to a supersonic business jet.

Aurora Flight Sciences, among the highest profile of the ventures, remains a wholly-owned subsidiary with work proceeding “full steam ahead,” a Boeing representative said.

But the company has tapped the brakes on the Autonomous Flight Research Center it had planned to open this year in MIT’s Kendall Square Initiative in Cambridge, Massachusetts, near the university’s campus.

Boeing is trying to sublease about half of the 100,000 square-feet space it had secured, said Peter Conway, director of research for Boston-based Lincoln Property Co., which doesn’t represent Boeing or the landlord. Aurora no longer plans to move its Cambridge-based team to the building, Boeing said.

The company plans to decide by year-end whether to maintain or monetize its stakes in three ventures:

  • Aerion, which is developing a supersonic business jet
  • SkyGrid, which is making an air-traffic management system for drones
  • Wisk, a joint venture with Kitty Hawk Corp., an autonomous flight venture backed by Google founder Larry Page.

“It’s a different world now,” said Stephen Perry, an investment banker who specializes in aerospace and defense deals at Janes Capital Partners. “They’re all cash-draining businesses in the short run, with an uncertain future.”

Boeing, Perry said, needs to focus on its core businesses because it’s “in a fight for survival.”

©2020 Bloomberg L.P.

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Montreal startup uses AI to set real-estate prices – Montreal Gazette

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The pandemic has been devastating for so many businesses, but it has also provided opportunities for other entrepreneurs. Take the case of Montreal brothers Mark and Jordan Owen. Both saw their lives significantly altered by the COVID-19 crisis.

Mark, 28, was working for a local real-estate development firm and business had ground to a halt in the spring. Jordan, 26, was in a master’s program in real-estate development and city planning at the Massachusetts Institute of Technology (MIT) and had come back to Montreal in March because all in-person classes had been cancelled.

That’s when they had the idea of starting up a company to produce reusable masks. They founded Bien Aller, named in honour of the Quebec COVID catchphrase “Ça va bien aller.” They created the firm with a friend, Sean Tassé, who had been laid off from his job at a construction-management firm because of the pandemic.

Six months later, they’ve sold about 300,000 masks and they’re still producing them at facilities in Montreal and South Korea. Then the Owen brothers, Tassé and another friend, Benoit Thibeault, had a notion for a more unusual startup. The Owens’ background in Montreal real estate had them thinking that what developers and brokers could really use is a more reliable way to set prices for houses and condos that are going on the sales or rental markets.

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Real Estate Investments in Greater Vancouver Offer Most Attractive Investment Yield

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Is there an investment asset that can produce a 366 percent return in a three-decade span? Yes, it is the housing property in Canada. Is there an investment asset that can beat this performance? Yes, it is the property in Greater Vancouver in British Columbia, Canada. Indeed, Greater Vancouver has proven to be one of the real estate investment hotspots, given its appeal as an investment market that boasts natural beauty, strong economic and demographic fundamentals, and financial stability, which ensures optimal yield for a low level of investment risk.

Property prices in Greater Vancouver, BC, have risen by some 473.7 percent in the period between 1980 and 2009, yielding, on average, a spectacular 17 percent per annum over the noted period. In other words, according to the Canadian Real Estate Association (CREA) and RE/MAX Canada, the average price of residential property in Greater Vancouver in 1980 was slightly over $100,000. Today, that same property is worth, on average, somewhat more than $574,000.

The noted return on investment looks incredibly attractive, given the low risk associated with residential property investments. Investments in residential real estate in Greater Vancouver have been characterized by exceptional stability. The average price of a house in Greater Vancouver dipped seven times in the past 30 years. Most of the dips occurred in the late 1990s. However, all declines in average prices of homes in Greater Vancouver have been exceptionally mild, with the largest annual decreases not exceeding 3.5 percent.

This performance of real estate investments in Greater Vancouver looks remarkable compared to the implementation of property investments in the Canadian housing market as a whole or performance of investments in most other regional real estate markets in Canada. As noted earlier, the average price of a property in Canada has risen by 366 percent between 1980 and 2009. This translates into an average annual return of 13 percent in the same period. Only Victoria, Regina, Toronto, and Ottawa have recorded returns higher than this average for Canada as a whole. Victoria, located in British Columbia, has the second-highest return on residential real estate investments in the Canadian property market. An investment in Victoria’s housing property has returned 448.5 percent in total return, or 16 percent on average each year between 1980 and 2009. This makes British Columbia the best performing regional property market in Canada.

On the other hand, taking an international investment perspective, even less robust, would have been investment returns on U.S. real estate. Based on the average values of homes in the United States between 1980 and 2009 (using the Freddie Mac Conventional Home Price Index), an investment of $100,000 in residential properties in the United States in 1980 would be worth $382,576 today. This would represent a total return, measured by the increase in home prices, of 283 percent over the noted period. In other words, an investment in the real estate market in the United States would have produced an average nominal yield of 10 percent per annum, which is much lower than that earned on the property investment in Greater Vancouver.

Investments in residential real estate in the Greater Vancouver area look exceptionally appealing, given their outstanding performance relative to property investments in other regions of Canada and the U.S. real estate market. Therefore, investing in Greater Vancouver’s property market can represent an investment choice that promises high yield for a low level of investment risk.

 

 

 

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