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Singapore Is Japan’s Top Property Investor in 2023, Report Says

Singapore became the biggest investor in Japan’s real estate sector this year, lured by the yen’s weakness and growing demand in logistics and hospitality industries, according to Knight Frank LLP.

Singapore’s sovereign wealth fund GIC Pte’s purchase of six warehouses in Japan from Blackstone Inc. for $800 million contributed significantly to that, said Christine Li, Knight Frank’s head of Asia-Pacific research, in the report.

Foreign investors, including Goldman Sachs Group Inc., KKR & Co., Blackstone Inc., have spent a combined $2 billion on hotel deals in Japan so far in 2023, the most compared with any other sector in Asian commercial property, according to MSCI Real Assets.

Japan’s surge in hybrid work arrangements and rising supply has eroded investors’ appetite for the office sector, Knight Frank said in the report.

EK: Attracting foreign capital in real estate sectors – is this good or bad?

Hollywood Studios, Writers Near Deal But AI Issue Lingers

Hollywood studios and screenwriters are close to resolving a contract renewal dispute that has paralyzed Hollywood for months, but still don’t have a deal, according to people familiar with the discussions.

The studios have agreed to staff a certain number of writers on their TV shows, a figure that will increase with the number of episodes in a season, one of the people said. The two sides have also created a structure in which writers will receive bonuses for popular shows on streaming services.

The studios have made a counteroffer on the use of artificial intelligence in screenplay writing, which was the main topic of talks on Saturday. Discussions will continue Sunday, the two sides said in a joint statement.

Executives at companies including Netflix Inc., Walt Disney Co. and Warner Bros Discovery Inc. met with negotiators representing the Writers Guild of America for a fourth consecutive day, hoping to resolve a strike that began at the beginning of May. The writers have been fighting for higher pay and changes in the way they are paid by streaming services.

EK: AI writers, up-and-coming… I don’t know if I want to watch a show written by a robot, though.

Why Can’t Americans Buy Cheap Chinese EVs?

Ask any US automaker and they’ll say this is mainly a profitability problem. To pay for investments in electrification, carmakers are first focusing on trucks, SUVs and other premium models. That same tension is at the center of the United Auto Workers strike, which is pitting factory workers looking to preserve pay and benefits in an EV world against carmakers who say they can’t go electric, meet union demands and stay in the black.

China, meanwhile, has become a global powerhouse in electric cars: It’s expected to account for about 60% of the world’s 14.1 million new passenger EV sales this year, according to BloombergNEF. Many of those options are small and affordable; some are downright cheap. Take BYD’s Atto 3, a small, front-wheel-drive crossover with one of the most advanced batteries in the game. The Atto 3 costs just $20,000 in China and starts at $38,000 in the UK and Europe. But not a single Atto 3 is headed for the US market.

Why not? The answer is part logistics and part politics.

Although the US has a strong track record of mainstreaming foreign cars — Toyota is one of the country’s most popular brands — the challenges of entering such a competitive market are hard to overstate. All foreign automakers do so at a disadvantage, starting with a 2.5% tariff on most imports. But in two categories that disadvantage is substantial enough to almost entirely stamp out foreign competition: pickup trucks and cars made in China.

The China dynamic is more recent. In 2018, just as China was starting to crank out a wave of compact EVs, US president Donald Trump implemented tariffs on about $370 billion of imports from the country each year, including a 27.5% tariff on cars made in China. That policy persists under the Biden administration. In Europe, by contrast, the tariff on Chinese cars is 9% — low enough for those machines to at least trickle into the market.

“If you have a 20% to 25% cost advantage, it makes sense to go to countries where even after the tariff you are price-competitive,” Aakash Arora, a managing director in Boston Consulting Group’s auto practice, told Bloomberg News.

But tariffs are just the first hurdle for a global car company looking to crack the US market. Most Chinese cars haven’t been engineered with US safety regulations in mind; just going through those protocols is an expensive and elaborate process. Then there’s the cost of building a retail network and some sort of safety net for servicing cars and backstopping warranties.

Newcomers must pour enough money into marketing to get some semblance of name recognition — a tall order for foreign companies and EV upstarts alike. California-based Lucid Group, a startup that makes the longest-range electric car in the US, saw brand awareness as important enough to spring for a commercial during this year’s Oscars (at an estimated cost of $2 million).

Even established foreign brands struggle for relevance with American buyers. “You could argue Fiat has been a bust in America,” says Kevin Tynan, an analyst at Bloomberg Intelligence. “Mitsubishi’s done nothing, Isuzu’s gone and Mazda’s probably hanging on by its fingernails.”

​If Chinese carmakers were somehow able to overcome tariff economics, dealer-network logistics and marketing hurdles, they would still face another challenge in the US. There may be a decent chance of American consumers going for a Chinese EV, but there’s almost no chance of US politicians supporting an auto-market evolution that benefits Chinese companies over American ones.

EK: Tariffs, safety regulations, national brand image, anti-Chinese protectionism – lots of huddles for Chinese EV automakers to overcome. Americans are picky about foreign automakers except for a few luxury German and a few affordable Japanese ones. Made-in-China cars? Well…