Sale Of Evergrande’s HK Office Bldg Falls Through Again

HONG KONG – Two sources revealed that there were no successful buyers in the latest tender for China Evergrande Group’s headquarters in the Chinese territory, reported Reuters on Tuesday afternoon (3 December, SGT).

The tender for the China Evergrande Centre had closed with zero successful bidders, as the offer prices and terms submitted were below the sellers’ requirements.

Notably, creditors appointed a receiver last September to repossess the office property after developer China Evergrande Group failed to pay its debts. The building was then launched for sale via tender that closed on 31 October 2022.

The 27-storey China Evergrande Centre in Hong Kong’s Wan Chai district is valued at HK$8 billion to HK$9 billion, which is about US$1.02 billion to US$1.15 billion.

In comparison, China Evergrande Group has liabilities of over US$300 billion, making it one of the most indebted real estate developers in China.

The company had tried to divest the commercial property before it was seized by creditors, as the China Evergrande Centre was used as collateral for a HK$7.6 billion loan from creditors led by the Hong Kong unit of Chinese government-owned China Citic Bank Corp Ltd.

One of the insiders close to Citic revealed that the creditors may again put the office building on sale when market conditions stabilise by H2 2023. Savills is the appointed agent in charge of the tender.

It was reported last July that China Evergrande Group was planning to dispose the office building, but the tender back then only attracted 2 offers and the submitted bids were lower than HK$10 billion and the asset’s HK$12.5 billion purchase price in 2015.

Then in 2021, the US$1.7 billion proposed transaction to sell the China Evergrande Centre to Chinese government-owned Yuexiu Property fell through.