Hou Jiayin
Building, located at 38 Gloucester Road, Wan Chai, Hong Kong, was purchased by Evergrande in 2015. It has been the cash machine for Xu Jiayin to conduct short-term mortgage financing until it was taken over by creditors in September 2022.
Recently, according to public documents in Hong Kong, the China Evergrande Center, the Hong Kong headquarters building of China Evergrande (03333.HK), was appointed as the receiver of the creditor CITIC Bank International (referred to as "CITIC Bank International"), a subsidiary of creditor CITIC Bank , on September 6.
A "Notice of Appointment of Receiver or Manager" from Hong Kong Company Registration Office shows that Pioneer Time, a project company under China Evergrande, which holds Hong Kong Evergrande Center, has appointed Huang Yongshi, Hong Kong managing director of Alvarez Marsal and senior director Yang Meili, as the receivers and managers of Evergrande Center , effective September 6, 2022.
36Kr noticed that Hong Kong Evergrande Center has been mortgaged many times. According to the website of the Hong Kong Company Registration Office, the mortgage registration of the property occurred five times on December 4, 2020, December 3, 2018, February 23, 2018, January 19, and November 29, 2016, and on December 4, 2020, it was mortgaged to the current takeover party Xinyin International.
A person engaged in structured financing business in the Hong Kong banking industry said that mortgage financing behaviors for bulk properties and luxury houses in Hong Kong are relatively common, but the financing cycle for most cases is as long as 5-10 years, and short-term rolling financing of Evergrande Center is rare.
On November 26, 2020, Pioneer Time, as the charger (Chargor), used the mall as collateral to collect financing from Xinyin International. According to a document file of the Hong Kong Company Registration Office on December 4, 2020, the mortgage loan involved HK$7.6 billion, and the borrower is Tianji Holdings, a wholly-owned subsidiary of Evergrande.
Hong Kong Land Registration Documents show that the owner of Evergrande Center is still Pioneer Time, but the registration information shows that the receiver has all the interests of the property, including rental income, disposal rights, etc.
It is reported that the receiver has released the Evergrande Center in the market, with a valuation of about US$1.2 billion, or approximately HK$9.4 billion (8.3575 billion). The author of 36Kr asked Evergrande for verification, and the other party said that he had not received accurate information yet.
If the valuation is true, Evergrande Hong Kong Center will not only face multiple mortgages, but also the valuation price will continue to decline.
In 2015, the predecessor of the Evergrande Center in Hong Kong was Wantong Building in the United States. Xu Jiayin purchased it from Chinese Real Estate Liu Luanxiong and set a record for the purchase price of HK$12.5 billion.
In addition to a mortgage loan financing of 7.6 billion yuan provided by Xinyin International in 2020, in November 2018, Evergrande also used another subsidiary, EV Wanchai 1 Land, as the guarantor and mortgaged China Evergrande Center to obtain 8 billion yuan in loan financing.
Although the relevant loan was released earlier this year, EV Wanchai 1 Land also has documents pending submission or archive to be submitted as a "Notice of Appointment of the Receiver or Manager", so it is unknown whether other creditors have applied for takeover.
In August 2021, Evergrande offered HK$15.6 billion to seek the takeover of the Hong Kong Evergrande Center. According to Hong Kong media reports, Evergrande later lowered the selling price to Yuexiu Real Estate (00123.HK) to HK$10.5 billion, but the two parties failed to successfully trade. According to analysis by Hong Kong commercial office market personnel, the market price of Evergrande Center was about HK$12.4 billion to HK$13.2 billion at that time, but the occupancy rate was only about 80%.
At the end of July 2022, Evergrande once again sold the Hong Kong Evergrande Center. , a subsidiary of Li Ka-shing Family , , Cheung Kong Group (01113.HK), confirmed its participation in the bid. At that time, the market rumored that the valuation of Evergrande Center further dropped to about HK$9 billion. Judging from the current situation of taking over by Xinyi Bank International, the final transaction was not implemented.
36Kr learned from a Hong Kong agent bank that the transaction is handled by Der Asphalt Bank. Regarding why Cheung Shi gave up taking over, 36Kr tried to contact Hong Kong's Derby Asphalt Bank, but as of press time, no reply was received.
html On the evening of September 1, China Evergrande issued additional guidelines for resuming trading , and also disclosed that the company's main business location in Hong Kong will be changed, which will be changed to the 15th floor of China Evergrande Center, 38 Gloucester Road, Wanchai, Hong Kong from September 1.Beijing CITIC Building in the Beijing Guomao CBD area is held by CITIC Bank's parent company CITIC Group , and is the highest landmark building in Beijing. However, after taking over Evergrande's Hong Kong headquarters building, CITIC International is likely to not hold it for a long time, but will continue to seek transfer and withdrawal.
CBRE (CBRE Group) estimates that at the end of the first half of this year, the vacancy rate of the Hong Kong commercial and office market was 11.9%, the highest level since the third quarter of 2003, with 9.8 million square feet vacant. Colliers statistics show that as of August, the vacancy rate of high-end office buildings in Hong Kong has risen to 12.3%.
Savills (Savills) estimates that the total vacant area of leasable Grade A office buildings in Hong Kong will reach 17.2 million square feet in the next four years, while the estimated annual rental area will be 1 million square feet, resulting in an oversupply, equivalent to nearly 250 football fields.
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