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R&F Properties turns to Hong Kong tycoon in distressed sale of London asset to trim part of US$42 billion in liabilities

  • Guangzhou R&F is selling a UK asset to Hong Kong property tycoon Cheung Chung Kiu to help pare debt and other missed payments
  • Cheung’s vehicle is expected to ask bondholders to swap as much as US$5.7 billion of existing bonds into new perpetual debt as part of the transaction

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Guangzhou R&F Properties is doing business with Hong Kong tycoon again to ease its debt burden. Photo: SOHU
Cheryl Arcibal
Guangzhou R&F Properties, a defaulted Chinese developer, is banking on Hong Kong tycoon Cheung Chung Kiu in a distressed sale of its asset in London, the latest attempt to help trim US$42 billion of liabilities and survive a three-year slump in China’s housing market.

The developer has agreed to sell its UK asset known as the Nine Elms development, a prized mixed-use residential and commercial project in central London, for a token sum of HK$1 plus debt, it said in an exchange filing. The buyer, London One Limited, which is solely owned by Cheung, will assume at least US$800 million of the loan related to the transaction.

Cheung is the chairman and controlling shareholder of Hong Kong-listed property group CC Land Holdings. R&F had in April 2022 sold its 50 per cent share in Thames City at Nine Elms, formerly New Covent Garden Market, to Cheung for HK$2.66 billion (US$340 million).

“In recent years, the group has expedited its plan to sell development and investment properties in both China and overseas,” R&F said in its exchange filing. Nonetheless, certain loans have become “increasingly difficult to repay”, justifying the need to sell the London project, it added.

Cheung Chung Kiu, chairman of CC Land Holdings, is personally buying the UK asset from R&F. Photo: Weibo
Cheung Chung Kiu, chairman of CC Land Holdings, is personally buying the UK asset from R&F. Photo: Weibo

R&F expects to sell more assets to help reduce more than 300 billion yuan (US$42 billion) of total liabilities it carried at the end of June 2023. Bank borrowings and bonds made up more than 45 per cent of them. The developer has missed payments on more than 34 billion yuan of debt, according to its latest financial report to shareholders.

CC Land confirmed in an email to the Post that Cheung is the buyer of the UK asset in his personal capacity. Cheung was reported in 2020 to have bought a 45-room mansion in Knightsbridge for £210 million (US$265 million), a record price for a country house in the UK capital.

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