Fashion Mogul’s Commercial Property Portfolio In Central Seized By Creditors
HONG KONG – A commercial property portfolio comprising a prime office floor and 3 carpark spaces in Central have been seized by creditors after a fashion tycoon failed to repay a huge amount of debt, reported the South China Morning Post (SCMP) on Wednesday evening (23 November, SGT).
The prime office property consists of an office floor measuring 13,880 sq ft on level 23 of Bank of America Tower.
The creditors have appointed a receiver, which in turn has engaged global real estate agency Savills to market the commercial property portfolio for around HK$500 million (HK$36,000 psf). As per the Land Registry department, the assets were acquired for a total of HK$701.8 million (HK$50,000 psf) in 2018.
Notably, the office floor and 3 carpark spaces were acquired by Forever Winner International Development, an entity controlled by fashion mogul Qiu Yafu, who once had aspired to create a fashion empire touted as China’s version of LVMH, the French giant that owns Louis Vuitton, Moët Hennessey, and many other famous luxury brands.
Notably, Qiu made US$4 billion worth of offshore acquisitions between 2015 and 2018 through his Shandong Ruyi Technology Group.
But starting in 2019, Qiu’s conglomerate faced difficulties repaying debt arising from its overseas acquisitions. After the COVID-19 outbreak exacerbated the situation, the private luxury clothing group deferred a domestic bond repayment for a 1 billion yuan note two times between March and June 2020.
In March 2020, Moody’s Investors Service downgraded Shandong Ruyi’s debt into Caa3 (junk grade), after reducing it to Caa1 in December 2019. The ratings agency then halted grading the group’s debt in May because of insufficient information.