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China Vanke sells land once earmarked for new HQ at a huge loss as embattled developer fights to reduce debt mountain

  • The developer sold the plot in the Nanshan district to Shenzhen Metro, its biggest shareholder, and Baishuo Investment, at a loss of about 28 per cent
  • The parcel, originally acquired by Vanke in December 2017 for 3.1 billion yuan, found a buyer quickly having gone up for auction on May 18

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China Vanke was one of many major developers that ran into serious liquidity problems when the authorities imposed Beijing’s ‘three red lines’ restrictions to rein in debt in the property sector. Photo: Reuters
Yuke Xiein Beijing
China Vanke has sold a plot of land once earmarked for its new headquarters in Shenzhen for 2.24 billion yuan (US$309 million), almost 30 per cent less than it paid in 2017, as the beleaguered property developer strives to pay down its mountain of debt.
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The government-backed developer sold the 19,227 sq m site in the Nanshan district of the southern Chinese city to Shenzhen Metro Group, its biggest shareholder, and Baishuo Investment, according to a stock exchange filing published late on Monday. Shenzhen Metro is the operator of the city’s rail transit network.

The parcel, originally acquired by Vanke in December 2017 for 3.1 billion yuan and designated for commercial use, found a buyer quickly having gone up for auction on May 18.

Baishuo Investment took a 34 per cent stake from the sale, while Shenzhen Metro, which owns 27.2 per cent of Vanke, bagged the other 66 per cent.

The deal will help Vanke “revitalise stock assets and focus on its three major businesses of real estate development, property services, and rental housing,” the developer said in a statement.

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The news came just days after Vanke received a 7.8 million yuan lifeline in the form of bank loans guaranteed by its subsidiaries. The developer has also obtained 20 billion yuan in syndicated loans this month from the country’s biggest lenders including China Merchants Bank.

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