Indebted HNA Teams Up with JLL Amid Restructuring Drive

Global real estate consultancy JLL is teaming up with HNA Group to advise the conglomerate on “sound investments,” as the indebted Chinese firm looks to sell up to $6 billion in overseas real estate assets.

The strategic partnership – announced today by Wang Shuang, CIO of HNA Group and CEO of HNA Group (International), and Anthony Couse, CEO of Asia Pacific at JLL – is designed to support HNA’s long-term business development, according to a statement by the firms. Under the agreement, NYSE-listed brokerage JLL will advise on HNA’s global portfolio.

“The signing of this agreement will allow HNA to utilize JLL’s in-depth industry knowledge, expertise and global outreach,” according to the statement. “We expect this to be a long-term partnership.”

The announcement comes amid a flurry of reports and disclosures that HNA is downsizing and reshuffling its sprawling business empire, as the once-acquisitive conglomerate recoils from a debt-fuelled buying binge. The troubled firm chaired by tycoon Chen Feng is ramping up efforts to shed assets and slash an estimated $100 billion in debt, after snapping up more than $40 billion in global deals over two years.

As one of the top commercial real estate advisory firms, Chicago-based JLL has over 1,300 capital markets professionals worldwide and completed some $170 billion in investment sales, acquisitions and finance transactions last year.

HNA May Get a Hand with Asset Disposals

“HNA highly values JLL,” commented Wang in the statement. “This partnership allows both parties to analyze HNA’s business development with an eye toward sound investments and deploying capital to create value.”

“We will fully take advantage of JLL’s global perspective, professional capacity and international platform to support our business development worldwide,” added Wang, who stepped down as executive director and co-chairman of the board​ in December.

“We are delighted to be able to support HNA Group,” said Couse in the statement. “I’m confident that the two companies will work closely together to optimize HNA investments for the future.”

The parent company of Hainan Airlines is coping with a financial crisis after splurging on overseas assets from US office towers to a major stake in Germany’s Deutsche Bank. HNA said last November that it was interested in selling assets in sectors frowned upon by the Chinese government, such as overseas real estate.

The Hainan-based company was reported in December to be hawking around 20 commercial properties in Manhattan, London, San Francisco, French Polynesia and Australia. The following month, HNA reportedly agreed to sell a downtown Sydney office tower to the Blackstone Real Estate Partners (BREP) Asia fund for about A$200 million ($161 million).

Troubled Conglomerate Shifts Gears

On Monday, HNA’s listed flagship carrier Hainan Airlines announced it was taking over the group’s hotel business as part of an asset restructuring drive. The group is reportedly also in talks to unload its 25 percent stake in NYSE-listed Hilton Grand Vacations Inc, a deal that could bring in as much as $1.2 billion.

Just last week, HNA was revealed to be planning the sale of its $1.4 billion stake in US hotel chain Park Hotels & Resorts Inc. The former asset addict has also purged its balance sheets of a series of costly land parcels it had scooped up in Hong Kong’s Kai Tak area in 2016 and 2017.