Aoyuan Said To Be Selling Kwai Chung Office Bldg

Aoyuan Said To Be Selling Kwai Chung Office Bldg For HK$800m

HONG KONG – Insiders revealed that Indebted Chinese real estate developer Aoyuan Group is looking to divest a redeveloped office building in Kwai Chung in the eastern part of Hong Kong, reported Reuters on Friday afternoon (26 November, SGT).

The sources, who requested anonymity as the information is confidential, also disclosed that the bidders will likely be family offices or local investors.

The commercial property is expected to change hands with a huge discount, said the insiders. Previously, Aoyuan purchased the office building for HK$950 million (US$121.83 million) in 2018. At present, real estate agents estimate the asset is valued at under HK$800 million.

If the commercial property in Kwai Chung is divested, it will follow Aoyuan’s disposal of some assets in a residential project at Hong Kong’s Mid-Levels earlier this month, in which the company suffered a loss of HK$177 million.

Calls to the Aoyuan went unanswered and it hasn’t responded to messages sent to its officially-listed email.

The divestment comes as cash-strapped Chinese developers are downsizing in Hong Kong, one of the most expensive real estate markets in the world, while letting local companies acquire the properties at distressed prices.

Two sources with knowledge of the matter revealed that Aoyuan extended the redemption date of onshore asset-backed securities last week, and the developer is attempting to divest some real estate in Hong Kong in a bid to raise cash.

Similarly, Chinese real estate developers like Kaisa Group Holdings and China Evergrande Group have sold some assets over the past few months to Hong Kong developers to help alleviate liquidity stress back home amidst billions of dollars in debt.

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