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Evergrande puts 223 properties on chopping block as list hits WeChat, online platforms, following back-to-back profit warnings
- Evergrande’s spokesperson says list making its round on online platforms like WeChat is authentic and represents its “normal sales” effort
- More sales of commercial real estate to come this year amid record-high office vacancy rates, with market players more diverged: analysts
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China Evergrande, the nation’s biggest developer by sales, has put 223 commercial properties for sale in a move to tackle its leverage, after issuing two back-to-back profit warnings in the past year.
The list of of properties n 111 cities has made it to one WeChat account called “distressed asset industry observations” and other mainland online platforms as the fortunes of China’s top developers come under the spotlight amid a slide in earnings and a surge in vacancy rates during the nation’s historic economic slump.
“Property companies are trying to sell their products that are not suitable” to their portfolio mix, said Zhang Bo, chief analyst at 58 Anjuke Real Estate Research Institute, a Shanghai-based firm. “At least this year and next year, such reduction of commercial portfolio at a relatively low price will increase.”
China’s pandemic-ravaged economy shrank 6.8 per cent in the first quarter, the first contraction since 1976, pushing office vacancy rates in Beijing, Shanghai, Guangzhou and Shenzhen to all-time highs. Evergrande’s list is stoking concerns Evergrande is trying to boost liquidity to help pay down debt, some of them junk-rated and has been growing at higher costs. The economy rebounded last quarter with a 3.2 per cent gain.
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China’s biggest developers have in recent years offloaded their assets before the economic slump shook the 16 trillion yuan (US$2.3 trillion) market, partly triggered by efforts to cut down borrowings.
Iris Ouyang is a business reporter for the Post. She has reported in Washington D.C., Beijing, and Hong Kong in the past several years for both Chinese and international media organisations such as Caixin, Phoenix Finance, MNI, USA Today, MarketWatch and American Banker.
Based in Hong Kong, Pearl covers the property market in the city and China and follows major listed developers. She previously worked at The Straits Times and has also contributed stories to China Daily.
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