China’s Singles Day shopping celebration concluded last week with a record $74 billion in deals recorded, including finding a new match for one of the country’s spinster real estate projects.
Thanks to Alibaba’s Taobao website, which is best known as a marketplace for iPhone accessories and fast fashion, Xiamen International Center, a 68-storey tower in Fujian province, found a new owner on 11 November, taking the crown as the day’s largest transaction after selling for RMB 2.91 billion ($440 million) on the e-commerce platform.
The sale of the unfinished project, which changed hands as part of a bundle with a neighbouring office tower still in the planning stages, is the latest chapter for a project originally conceived as the tallest structure both in Xiamen, a coastal city of 3.5 million people, but which remains unfinished some 24 years after it was first proposed.
For Alibaba, the banner transaction came as the mainland e-commerce giant, along with its archrival JD.com, had made real estate a new focus of the promotional festival, which traditionally ranks as the world’s largest shopping day.
24-Year Project Sold at Liquidation
The project in Xiamen’s Siming district was sold to Beijing-based developer Luneng Group, the real estate division of China’s State Grid power utility, in a liquidation sale by the previous owner, Xiamen Yuansheng Real Estate Co Ltd, which had come up short of the cash necessary to complete the project.
Analysts familiar with the market tied the sale of the long-delayed project to a new emphasis by Chinese authorities on reducing systemic risks and reining in lending.
“As the overall economy picks up, the government and financial authorities are once again looking to crackdown on overleveraging and reducing systemic risks in the financial markets and economy,” said James Macdonald, head of research for Savills China. Macdonald added that loan forbearance, which the government had extended earlier this year during the worst days of the pandemic, is being reeled in, putting fresh pressure on banks to act on non-performing loans.
Xiamen Yuansheng had announced the auction plan on 24 August after having topped out the tower in 2016. Purportedly scheduled for completion this year, Xiamen International Center stands 339.88 metres (1,115.09 feet) in height and has a total built area of 163,300 square metres (above and below ground).
Work on the project, formerly known as the China Post & Telecommunication Tower, began in 1996 and was later halted over financial issues. According to the Taobao listing, 40 floors of the main structure have been completed, with masonry work, electrical and other engineering elements yet to be finished.
Luneng’s high-rise trophy, which offers views of Xiamen’s famed Gulangyu Island, comes in a package with the planned Xiamen Baojia Center at the same address. The latter property is envisioned at a less-ambitious 180 metres high and 30 storeys. Yet to begin construction, no completion date for Xiamen Baojia Center has been announced.
E-Commerce Players Move Into Real Estate
Originally conceived by e-commerce titan Alibaba as a way for the nation’s lonely hearts to find solace in their solitude through retail therapy, Singles Day has since morphed into an all out effort to promote e-commerce.
With the COVID-19 pandemic having moved more shoppers online, Alibaba had put renewed emphasis this year on capturing a slice of China’s real estate market, including arranging for the sale of 10,000 homes at special discounts, according to an account in China’s Securities Times.
The mainland’s second-largest e-commerce provider, JD.com, had also targeted real estate for its Singles Day activities, including making arrangements with developers like China Vanke and Future Land Development to offer exclusive discounts to online home shoppers.
Despite the efforts to encourage online real estate purchases over the shopping holiday, not all of China’s unloved properties offered on the Internet were able to find a match on Singles Day.
A set of luxury apartments in Shanghai’s Tomorrow Square were also put up for auction on Taobao at a 20 percent discount for Singles Day, but the deal ultimately remained unconsummated. The frustrated attempt to sell floors seven through 32 of what was once the tallest building in the city’s Puxi area came after an October attempt to sell the apartments for RMB 2.57 billion also failed to attract a buyer.