Slice of Shanghai’s Tomorrow Square Now Available on Taobao for $378M

You can now buy a second-hand Shanghai skyscraper that once belonged to a disgraced tycoon. But only if you act now, and only on Taobao.

The sale of Tomorrow Square, once the tallest building in Shanghai’s Puxi area, includes only the 7^th through the 32^nd floor of the 60-storey tower, with those levels having been put up for auction on a special section of Alibaba’s online marketplace with a reserve price of RMB 2.57 billion ($378 million).

However, the asset brings with it – free of charge – some history of China’s recently reversed overseas investment drive, as well as the cachet of having once belonged to a mysterious oil billionaire who disappeared two years ago and hasn’t been seen since.

Serviced Apartment Complex Needs a Buyer

“The project is in a very central location, highly visible and iconic structure,” says James Macdonald, head of research for China at Savills. The market analyst points out that this section of the mixed-use tower, which featured in American author James Fallows’ Postcards from Tomorrow Square and served as the journalist’s home in Shanghai, was originally built for executive apartments.

Having been constructed for residences, the property’s floorplate size and efficiency rates “are not ideal for a company looking to maximise usage of leased area,” Macdonald note. The mid-zone slice of Tomorrow Square includes 246 apartments, with the auction set to take place on 15 November.

What the 130,063 square metre (1.4 million square foot) property does have going for it is a location overlooking People’s Park, the leafy section of central Shanghai’s People Square, and a location directly across the street from the Shanghai Art Museum.

At the auction reserve, the property would be available for the equivalent of RMB 70,384 per square metre, although Macdonald expressed skepticism that the property would sell at that price, although he held out the chance that it might attract an end-user from the hospitality sector. The upper floors of the 2003-vintage building are occupied by Shanghai’s JW Marriott Hotel, while the lower floors are given over to retail and event space.

The asset, which has been on the market some time, had earlier attracted interest from buyers willing to potentially pay up to RMB 55,000 per square metre for the property, with Macdonald holding open the possibility that, should the coming tender fail, there might be a later auction at a lower price.

Court Ordered Sale

The Tomorrow Square apartments are being sold under court order by the controllers of Shanghai Huaxin International Group, a conglomerate once owned by disgraced businessman Ye Jianming, who disappeared – reportedly into government detention – in early 2018.

Ye, who built China CEFC Energy into the country’s largest privately owned oil and gas group, saw most of his assets taken over by the government not long after his disappearance, with CEFC having been de-listed from the Shenzhen stock exchange in August of last year.

After his detention, Ye’s empire began selling off Hong Kong assets said to be worth as much as HK$2.5 billion ($322 million ) including four floors in the Wan Chai Convention Plaza, a luxury house and four units in upscale Residence Bel-Air in Pok Fu Lam, and a house in the New Territories.

Before that fire sale began Ye had been among of wave of Chinese investors bidding up prices for US and European real estate, with his company showing a taste for the Czech Republic. In 2015, Ye’s CEFC had purchased the former Land Bank (Živnostenská banka) building in central Prague, and shortly thereafter signed a deal to scoop up the five-star Le Palais Art Hotel Prague.

In 2016 the company had purchased the five-star Mandarin Oriental hotel in Prague from Singapore-based Hotel Properties Limited as well as later that year paying a reported $311.5 million to purchase the Florentinum office complex in the same city from private equity group Penta Investments.

All of those assets have since been taken over by other investors.

Research for this story was provided by Pimfha Chandhapradit.