Kaisa CEO’s Hong Kong Luxury Home Reportedly Sells at 15% Loss

A high-end Hong Kong home once owned by Kaisa Group boss Mai Fan has been sold by receivers for HK$300 million ($38.2 million), chalking up a 15 percent loss, according to local media accounts.

Mai, the vice chairman and chief executive of the troubled Shenzhen-based developer, reportedly bought House 17 in the third phase of the Residence Bel-Air project in the Pok Fu Lam area for HK$350 million in 2017, before it was seized by creditors last December. Recent assessments had put the property’s market value in a range of HK$260 million to HK$280 million.

Deutsche Bank appointed the receivers from New York-based risk consulting firm Kroll to dispose of the property at 17 Bel-Air Rise on behalf of Million Link Development, Mai’s holding company, in a public tender exercise that closed on 29 June.

For the super-luxury row house with a flat roof and garage, the unidentified buyer paid HK$75,892 ($9,670) per square foot for 3,953 square feet (367 square metres) of saleable area.

Easy Come, Easy Go

Mai, who has served Kaisa since 2015, had his trophy home in Hong Kong Island’s Telegraph Bay stripped away around the same time that his company defaulted on $400 million in offshore bonds in December, with the builder now struggling to restructure some $11.8 billion in debt.

The new owners of the two-storey luxury property, which was completed in 2005 by Richard Li’s Pacific Century Premium Developments, will be able to enjoy seaside views, a rooftop deck and a private garden in their new home.

Over the last five years, the third phase of Residence Bel-Air recorded just two transactions, with unit prices that ran from HK$54,414 to HK$58,058 per square foot, according to a press release issued by CBRE, which was appointed by the receivers as the sole agent for the House 17 sale.

But the project’s fifth phase witnessed a HK$64,000 per square foot sale during the most recent wave of COVID-19, CBRE said, adding that the supply of detached houses in the area is scarce.

Collapsing Scenery

Mainland investors like Mai had traditionally been a primary source of sales at Residence Bel-Air in the past, according to Alex Leung, senior director at surveying firm CHFT Advisory and Appraisal.

The Pok Fu Lam property previously owned by Mai was put on the market about one month after Kaisa shares were suspended from trading on the Hong Kong exchange after the developer failed to publish its 2021 annual results by a 31 March deadline.

That suspension came after Kaisa saw its share price slide 75 percent over the last 12 months before the 1 April forced halt. The company has reacted this year with a flurry of asset disposals and stake sales.

In April, Kaisa entered a strategic cooperation agreement with state-owned China Merchants Shekou Industrial Zone Holdings and China Great Wall Asset Management on joint venture arrangements and asset acquisitions.

Analysts predicted that the deal could lead other distressed property developers to bring in state-owned enterprises or local governments for their restructuring, Reuters reported.