Mingtiandi

Asia real estate and outbound investment news

  • Facebook
  • LinkedIn
  • RSS
  • Twitter
Sign Up / Login Logout

Lost your password?
Register
Forgotten Password
Cancel

Register For This Site

A password will be e-mailed to you.

  • Capital Markets
  • Events
    • 2021 Mingtiandi Event Calendar
    • Join the Mingtiandi Asia Value-Add Forum 2021
    • Join the Mingtiandi Multi-Family Investment Forum 2021
    • Join the Mingtiandi Logistics Real Estate Forum 2021
    • Join the Mingtiandi Sustainable Real Estate Forum 2021
    • Join the Mingtiandi Data Centre Forum 2021
    • Join the Mingtiandi Office Strategies Forum 2021
    • Join the Mingtiandi Proptech Forum in November
    • More Events
  • MTD TV
  • People
  • Logistics
  • Asia Outbound
  • Retail
  • Design & Construction
  • Research & Policy
  • Advertise

China Orient Asset Management Buys Unfinished Beijing Tower for RMB 3.3B on Taobao

2020/04/12 by Stephanie Li Leave a Comment

zhonghong tower

The Zhonghong Tower project may soon restart

A mainland property investment group which once spent $449 million to buy control of the Seaworld amusement park group from Blackstone, saw one of its prized assets sold on Taobao this past week, as China continues to sweep up the damage caused by failed attempts at global expansion by some of its largest property developers.

The Zhonghong Tower, an unfinished commercial building in Beijing’s Chaoyang district was sold in a court ordered auction on 7 April, with an affiliate of bad asset bank China Orient Asset Management, which is among the major creditors to the project, picking up the 40-storey building for RMB 3.32 billion ($469 million), according to an official online listing.

Yardi Proptech Report

The sale of the Skidmore, Owings and Merrill-designed project at the eastern edge of Beijing’s CBD paves the way for completion of a building which first broke ground in 2015, but has seen its progress falter after the developer’s parent firm, Zhonghong Holding, defaulted on a RMB 2.5 billion loan arranged by China Orient in December 2017.

Buying Beijing Buildings Online

Beijing Zhisheng Yunsha Property Management Company (北京植晟雲廈物業管理有限公司), a fund managed by China Orient Asset Management affiliate Beijing Dongfu Jiaji, was one of only two bidders which paid the RMB 200 million deposit necessary to join the online auction, and digitally walked away with the asset in one of Beijing’s prime commercial districts after paying 46 percent above the auction reserve.

Wang Yonghong Zhonghong

Wang Yonghong’s Zhonghong Group defaulted on more than RMB 3 bil in debts in 2018

The auction on a Taobao-managed distressed asset website was witnessed by some 76,775 followers, with the final sale price coming within RMB 89 million of the property’s valuation of RMB 3.23 billion after a total of 15 bids were placed by the two parties.

Once completed, the strata-title commercial development will provide some 65,616 square metres (706,288 square feet) of gross floor area, which makes the transaction price equivalent to just over RMB 50,612 per square metre. The building is predominantly designed for office use, with some 755 square metres set aside for retail amenities.

The terms of the sale also require the buyer to take responsibility for completing construction and fit-out of 53 pre-sold units in the building, which total some 13,000 square metres.

Investment Dreams Meet Debt Reality

Zhonghong Group had begun sales of units in the 180-metre-tall tower in late 2016, but Zhonghong Holding signed a guarantee in December of that year, providing the prime commercial project as collateral for the China Orient Asset Management-backed RMB 2.5 billion loan.

zhonghong tower interior

The deal requires the buyer to finish construction of the strata title units

By the end of the next year, the Beijing property development group had slid from a 2016 profit of RMB 157 million to RMB 2.51 billion in losses for 2017, the same year that Zhonghong Zhuoye, an overseas investment group controlled by Zhonghong Holding boss Wang Yonghong, had completed its $449 million acquisition of a controlling stake in Seaworld from Blackstone.

In July of 2018 Zhonghong Holding defaulted on RMB 1.1 billion in credit obligations to bring the then-Shenzhen-listed firm’s past-due obligations to RMB 2.27 billion.

By November of that year, Zhonghong Holding was delisted by the Shenzhen stock exchange, and in May 2019 its Zhonghong Zhuoye affiliate surrendered its shares in SeaWorld to a securities agent after defaulting on credit obligations.

China Orient Collects on Collateral

By securing the Zhonghong Tower at auction, China Orient Asset Management, which is one of the mainland’s four major managers of distressed assets, gains control of the collateral provided for its loan more than two years ago.

Office Investment

When it was facing delisting in October of 2018, Zhonghong Holding had attempted to sell off the project for RMB 2.5 billion through a similar bad asset sale on Taobao, only to have that effort fail.

Beijing Dongfu Jiaji, which is indirectly 20 percent owned by China Orient, had sued Zhonghong Holding in 2018, in an effort to recoup the RMB 2.5 billion loan, plus another RMB 255 million in interest and penalties.

The creditor had succeeded in the court judgement, which gave Beijing Dongfu Jiaji priority rights of compensation for proceeds from the sale of the Zhonghong Tower.

Although the mainland property market has been mired in the COVID-19 crisis since January, assets in Beijing’s CBD remain rare targets.

In October of last year, a joint venture between Allianz Real Estate and funds managed by Alpha Investment Partners paid the equivalent of RMB 77,351 per square metre to purchase an 85 percent stake in the Ronsin Technology Center commercial complex in Chaoyang district.

Three months earlier, China Vanke had paid RMB 1.3 billion, or around RMB 44,348 per square metre, to buy control of the Beijing HNA Plaza office building in the same district from the trouble parent company of Hainan Airlines.

Related Stories

  • Henderson Buys Beijing Resi Site for RMB 3B, Sets Price Record for Posh DistrictHenderson Buys Beijing Resi Site for RMB 3B, Sets Price Record for Posh District
  • Defaulting Developer’s RMB 1.4B Deal with Kaisa Held Up by Shenzhen ExchangeDefaulting Developer’s RMB 1.4B Deal with Kaisa Held Up by Shenzhen Exchange
  • Chinese Developer Defaults on $364M in Debt One Year After $449M Blackstone DealChinese Developer Defaults on $364M in Debt One Year After $449M Blackstone Deal
  • Beijing Office Market Added 250k Sqm of Space in Q4 as Vacancy Edged UpBeijing Office Market Added 250k Sqm of Space in Q4 as Vacancy Edged Up

Share this now

  • LinkedIn
  • Share
  • Tweet
  • Email

Filed Under: Finance Tagged With: Beijing, Chaoyang District, China Orient Asset Management, daily-sp, default, Featured, Zhonghong Holdings

Sustainability Forum

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Altus Cashflow Ebook

Get Mingtiandi Delivered

Office Investment

MTD TV

Warburg Pincus, Princeton Digital Foretell Asia’s Data Centre Future

MTD TV data centre panel

Blackstone, Actis Predict Continued Growth for APAC Data Centres on MTD TV

More MTD TV Videos

Latest Stories

goodwin gaw

Gaw Capital Said Planning US SPAC and More Asia Real Estate Headlines

quayside hong kong

IWG Opens in the Quayside in Third Takeover of Hong Kong WeWork Location

JLL Alex Barnes

Hong Kong Office Vacancy Hits 9.3% as Deutsche Bank, AIA Surrender Space

Sponsored Features

Tony Horrell

Colliers’ Global Investor Sentiment Report Anticipates Up to 50% Surge in Investment in 2021 Sponsored Feature

Andrew-Slevin-John-Foord (4)

Insurtech to Help Address Underinsurance Across Asian Real Estate Assets in 2021 Sponsored Feature

CK Lau

Asia Pacific Logistics Sector: Increasingly Varied Sector Requires Multiple Approaches Sponsored Feature

More Sponsored Features>>

MTD-QR-Code-320

Top Stories

Link REIT Buying Half-Stake in Vanke Shanghai Mall for $429MLink REIT Buying Half-Stake in Vanke Shanghai Mall for $429M

Hines Ramps Up APAC Presence With New Hires in Japan, South KoreaHines Ramps Up APAC Presence With New Hires in Japan, South Korea

IWG Opens in the Quayside in Third Takeover of Hong Kong WeWork LocationIWG Opens in the Quayside in Third Takeover of Hong Kong WeWork Location


Connect with Mingtiandi

  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Real Estate News

  • Capital Markets
  • Events
    • 2021 Mingtiandi Event Calendar
    • Join the Mingtiandi Asia Value-Add Forum 2021
    • Join the Mingtiandi Multi-Family Investment Forum 2021
    • Join the Mingtiandi Logistics Real Estate Forum 2021
    • Join the Mingtiandi Sustainable Real Estate Forum 2021
    • Join the Mingtiandi Data Centre Forum 2021
    • Join the Mingtiandi Office Strategies Forum 2021
    • Join the Mingtiandi Proptech Forum in November
    • More Events
  • MTD TV
  • People
  • Logistics
  • Asia Outbound
  • Retail
  • Design & Construction
  • Research & Policy
  • Advertise

More Mingtiandi

  • About Mingtiandi
  • Contact Mingtiandi
  • Newsletter Subscription
  • Terms of Use
  • Privacy
  • Advertise
  • Join the Mingtiandi Team