After disposing of $5.5 billion of overseas real estate and hotel company stakes since the start of 2018, cash-starved HNA Group has now sold eight properties in mainland China worth $1.1 billion so far this month, according to data from Real Capital Analytics.
Following this set of disposals, local press reports and online property listings show that the conglomerate continues to market real estate projects in Shanghai, Beijing and other Chinese cities in its scramble to keep ahead of bill collectors.
Already this month HNA, which is struggling to pay off debts of some $100 billion, has sold assets to Guangzhou R&F and Sunac China, a pair of developers that have also picked up properties from Dalian Wanda Group and Le Eco as those companies swirled into regulatory and financial crises.
In total, HNA is reportedly marketing another $2.2 billion in mainland properties, out of a portfolio of commercial, industrial and residential assets that it paid $9.5 billion to accumulate over the past nine years.
R&F Buys RMB 6.5B Haikou Project From HNA
Guangzhou R&F Properties, which acquired $2.9 billion in hotels from Wanda last year, has reportedly this month purchased Haihang Shoufu (海航首府) a RMB 6.5 billion ($1 billion) residential project in Haikou from HNA for an unknown amount, according to an account in mainland business site Cailian.
The high-end housing project on Guoxing Avenue in the Hainan provincial capital is currently under construction, with a pair of buildings in the 667,000 square metre condo project having topped out in January. According to HNA Infrastructure, the residential development is part of a mixed-used complex slated to include a Hilton hotel, the 429-metre-high Haikou Twin Towers commercial project and a school developed by HNA.
Sun Hongbin Snaps Up HNA Shanghai Assets
In addition to its Haikou sale to R&F, HNA is also reported to be negotiating the disposal of a residential project in Shanghai’s up and coming Qiantan area to Sun Hongbin’s Sunac China.
The potential asset sale would see Sunac, which last week paid HNA RMB 1.9 billion ($300 million) to take over 100 percent of a pair of HNA logistics projects in Hainan, take control of Qiantan Linghang (前滩领航), a residential development in southern Pudong district which Yeland Group (now HNA Investment) purchased for RMB 1.67 billion in 2013.
According to a report in Cailian, HNA’s pair of 29 storey residential towers on the 57,787 square metre site on Yangxi West Road are substantially finished, and Chinese online real estate platform Fang.com reports that the project sales office is already complete.
HNA Seeking Buyers For $2.2B Mainland Assets
In addition to the deals with Sunac and R&F, the airline turned conglomerate is reportedly planning to sell nine properties including office buildings and hotels in Beijing and Shanghai for RMB 14 billion ($2.2 billion), according to a Bloomberg account citing people familiar with the planned deals.
The HNA properties said to still be on the market include Shanghai HNA Tower — a 60 storey office tower on Lujiazui’s Puming Road, the 370-room Renaissance Shanghai Pudong Hotel near the city’s Century Park and Shanghai Yangtze International Enterprise Plaza, a 112,000 square metre business park project which is currently being marketed by Savills.
HNA Group owns a portfolio of 28 properties worth some $5.5 billion in mainland China at present, data from commercial real estate data provider Real Capital Analytics shows, including 11 Beijing properties worth a combined $2.8 billion, plus assets in Guangzhou, Chongqing, Tianjin and Qingdao, in addition to its Shanghai properties.
HNA Sells at 20% Discount in Hong Kong
And, HNA’s asset sale this week has not been confined to China’s mainland.
Despite Hong Kong rising office values, HNA Group disposed of a lower-floor unit in Admiralty’s Lippo Centre for HK$40 million ($5.1 million), or HK$28,000 ($3,569) per square foot, 20 percent below current market prices, according to a report Wednesday by Mingpao. The buyer of the property is local investor Jeffrey Liu Wai-lun, a member of Hong Kong’s prominent Liu family. The Hainan conglomerate acquired the 2,199 square foot unit in 2004 for HK$7.5 million.
Less than two months ago, a high floor in the same building was sold for HK$52,600 ($6,726) per square foot, and in November last year another Lippo Plaza unit sold for HK$50,000 ($6,407) per square foot.
Overseas Assets Disposals
HNA’s sales in China and Hong Kong follow soon after the group sold some $5.5 billion in international real estate assets over the past two months. Last week, the Hainan-based group launched the $1.1 billion sale of a its stake in Hilton Grand Vacations, a deal which came less than two weeks after it sold a $1.4 billion stake in another Hilton spinoff — Park Hotels & Resorts.
Meanwhile in Hong Kong, HNA disposed of three of four prized land plots in the city’s former airport site in Kai Tak to Wheelock and Company for HK$6.36 billion ($811 million), and Henderson Land Development for HK$16 billion ($2 billion) within the last month.