Just days after stories emerged of China’s HNA Group putting some 82 properties on the market, a list of nine overseas properties being offered for sale by the defaulting conglomerate has been obtained by mainland news website, thepaper.cn.
HNA’s latest fire sale includes five grade A office projects in London and New York, among them the Reuters headquarters in the UK capital, as well as a stake in Tishman Speyer’s The Spiral in Brooklyn. The remaining four assets are hotels, located in the US, Europe, Australia and the south Pacific.
HNA is reportedly targetting to sell properties worth as much as $11 billion by the end of 2019 after one of the group’s subsidiaries defaulted on payment of the RMB 300 million principal on a trust loan due on September 10th. The group’s debt was listed at $95 billion at the end of June, which was down 10.7 percent from the end of 2017, according to a report by Reuters.
The group’s asking prices for the assets were not made available, and inquiries to HNA by Mingtiandi went unanswered at the time of publication.
HNA May Be Selling Out of London at a Loss
HNA’s sell off of its overseas property assets is a reversal of the Hainan-based group’s $40 billion spending spree which saw it acquire technology, transportation and real estate around the world before running into a wall of excess leverage and government opposition last year.
The Reuters headquarters on Canary Wharf, known formally as 30 South Colonnade, was acquired by HNA in 2015 for a price reported to be £235 million (now $309 million). The report in thepaper.cn indicated that HNA has outstanding bank loans of £105 million on the 10-storey property against annual rental revenue of £12.4 million per year.
HNA has also included on the list 17 Columbus Courtyard, a Canary Wharf office block leased to Credit Suisse that the company purchased in 2016 for ₤140 million. Reports earlier this year by Bloomberg indicated that HNA may be offering to sell both properties at a loss.
Exiting Ventures with Tishman Speyer in NYC
At the same time that HNA is closing down shop in the UK, the Chinese group also has included its stakes in a set of three Tishman Speyer projects in New York on its list of overseas assets for sale.
The transportation-based conglomerate was revealed last year as a financial backer of Tishman Speyer’s $3.2 billion Brooklyn Yards office project The Spiral in New York. According to the account in thepaper, HNA has committed to invest $206 million in the Hudson Yards project, with $166 million already contributed. The US developer originally filed plans for the project in September 2016, with completion planned for 2022.
A second Tishman Speyer project in New York on HNA’s list is an unnamed $767 million development aimed at creating 4,800 square metres of new office space by 2022. HNA indicated that it has committed $254 million to the project with $173 million already contributed.
HNA is also offering for sale its stake in The Wheeler, a 10-story office project that Tishman Speyer is building above the historic Macy’s department store in Brooklyn. The documents from HNA listed a commitment of $207 million to the project, with $168 million already sunk into the $502 million development. That creative office project is targetting a 2020 completion date.
Not mentioned in the local news account was 850 Third Avenue, an office building in New York which HNA has had on the market since August, after US authorities found the Manhattan property to be a bit too close to Trump Tower to have a Chinese owner.
Hotels Hit the Auction Block
Apart from its overseas office portfolio, HNA is also selling a set of hotel properties, including the 165-room Cassa hotel at 45th Street in New York, two minutes walk from Fifth Avenue, which the developer had purchased for approximately $130 million in 2012.
Also on the block is the Aitken Hill conference centre in Melbourne, which HNA acquired in December 2016 for A$100 million, as well as a resort on the island of Bora Bora in the south Pacific and the 187-room Tangla Hotel in Brussels which HNA opened as its first European hotel in May 2017.
HNA Keeps Selling
HNA’s overseas asset sale coincides with parallel moves to raise cash closer to home as the mainland government declares war on leverage.
In September, HNA sold a Beijing office complex to China Vanke for RMB 1.29 billion, soon after the group sold the site of its original headquarters, Wang Hai Technology Plaza in Haikou, Hainan, to Tianjin-based developer Sunac China for RMB 981 million.
HNA has already sold or agreed to sell around $20 billion in assets across Sydney, New York and Hong Kong since January. Last week HNA was reported to be looking for buyers for its a total of 82 properties globally, with all but eleven of those in mainland China.