A Beijing court has announced plans to auction off an office tower formerly owned by fugitive Chinese billionaire Guo Wengui on a bad asset website operated by Taobao according to a listing on the site belonging to Alibaba Group.
Pangu Plaza was voted one of China’s ugliest buildings in 2011
Pangu Plaza Tower 5, the tallest element of the five block Pangu Plaza developed by Guo’s realty firm in 2008, is available at a starting price of RMB 5.18 billion ($750 million), or around 30 percent below its most recent valuation.
The 39-storey tower is among a collection of assets which the once well-connected property tycoon forfeited after fleeing to the US in late 2014 or early 2015.
Since relocating to a penthouse overlooking New York’s Central Park, Guo has busied himself hurling accusations of corruption against China’s government and business figures, and in 2015 was himself the subject of an investigative report by mainland business news outlet Caixin.
Olympic Landmark Goes on the Block
Located at 27 North Fourth Ring Middle Road about 180 metres west of the Beijing National Aquatics Center and 500 metres southwest of the Beijing National Indoor Stadium, the landmark plaza is the only commercial complex in the heart of the Beijing Olympic Park.
Guo Wengui now finds New York’s climate more appealing than Beijing
The 139,400 square metre Tower 5 will be made available at auction at a starting price of RMB 5.18 billion, which is equivalent to RMB 37,200 per square metre, according to Alibaba’s auction site. The 39-storey tower, which includes an additional five underground floors, has been appraised at a value of RMB 7.403 billion, which translates to RMB 53,100 per square meter, according to a third party evaluation cited in the auction documents.
A court notice said that the property will be auctioned from 10:00 am on 19 August to 10:00 am on 20 August, with interested parties required to put down a RMB 1 billion deposit and each round of bidding requiring a price increase of RMB 5 million. Any related taxes, fees, potentially unpaid management fees or utilities will be borne by the winning bidder.
The 410,000 square meter Pangu Plaza, which has the distinction of having appeared in the Transformers movie franchise, comprises five buildings extending some 700 metres along the North Fourth Ring Middle Road.
The procession of buildings is led by the 192 metre tall tower 5 as the “dragon’s head” followed by a set of three residential blocks and a hotel as the body. Guo opted to give up the complex, which was voted as one of China’s ugliest developments in a 2011 public survey, along with most of his mainland assets, after his political comprador, deputy minister of state security Ma Jian, was ousted during party infighting.
Ma came under investigations for violation of party discipline in 2015 and was sentenced to life in prison in December of last year on corruption charges.
Pangu Plaza Auctions Show Mixed Results
Last year, 49 condos and 19 office units worth a total of RMB 8 billion at Pangu Plaza were put up for auction individually, with the cheapest made available at a reserve price of RMB 46 million and the most expensive requiring a a RMB 83 million starting bid. All of the units were made available at estimated discounts of 20 to 30 percent from market rates, however, most of these units reportedly failed to find a buyer.
With tower 5 about to go under the hammer, an unnamed auctioneer commented to the local media that Pangu Plaza’s latest auction is also unlikely to result in a sale because of the large sum involved. As of July 16, about 31,434 people have registered to watch the online auction, with 469 of them having set the alert as a reminder. However, so far the auction has yet to see a single potential buyer pay the deposit required to bid.
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