Debt-stricken Evergrande sells off Shenzhen HQ plot
Troubled developer bought the land in 2017 with the aim of building 71-storey headquarters
A plot of land in Shenzhen where beleaguered developer China Evergrande Group had planned to build its headquarters has been sold to a local government-backed entity, continuing the company’s series of asset sales to pare its massive debt.
Shenzhen Anju Jianye Investment Operation, which is backed by the city government and China Industrial International Trust, acquired the 10,376-squaremetre parcel in Nanshan district for 7.54 billion yuan (HK$8.2 billion), according to a statement from the local government.
Three stated-owned enterprises based in Shenzhen and mainland developer China Vanke founded Shenzhen Anju in January, according to Tianyancha, a business data tracking firm.
It has been reported in the Chinese media that the company supports liquidity-strapped developers.
The company has been involved in many Evergrande projects to ensure their completion and delivery, including four in Shenzhen’s Longgang district.
China Industrial International Trust, based in Foochow in Fujian province and backed by Industrial Bank of China, is one of Evergrande’s creditors, according to local media reports.
The Post has been unable to confirm the relationship between the two.
Evergrande is among China’s worst-hit property companies, reeling under some US$300 billion of liabilities. The company has defaulted on multiple bonds and is facing legal action from creditors who have filed a winding-up petition in Hong Kong.
Evergrande bought the Shenzhen plot in December 2017 for 5.55 billion yuan to build its headquarters. However, construction on the 71-storey tower with an area of 343,000 square metres stalled in September 2021 as the company’s liquidity crisis deepened.
The one-time largest property developer in the country has been forced to sell assets, including plots of land, to cut debt.
Last week, it surrendered 11 plots in Wuhan, in Hubei province, with a total area of 1.5 million square metres, to the city government.
Earlier this month, the group sold land in Hong Kong’s Yuen Long district at a loss of US$770 million. Its headquarters in Wan Chai has also been on the block since October.
The sale of Evergrande’s land in Shenzhen comes amid efforts by the mainland authorities to help the country’s indebted developers tackle their debt problems and revive the real estate sector.
The announcement last week by the People’s Bank of China and the China Banking and Insurance Regulatory Commission of a 16-point rescue plan saw banks rush to offer billions of yuan in credit lines to several struggling home builders.
In the meantime, more local governments have loosened house purchase restrictions and expanded various preferential measures for homebuyers during the last few months.
Over 300 cities in the country have launched supportive measures so far this year, ranging from lowering mortgage rates to reducing down payments for first-home buyers, to stimulate the property market, according to data compiled by mainland real estate research platform CRIC.