China Evergrande, the country’s second-biggest developer by sales, is reported to have taken over a stalled RMB 13 billion ($2 billion) commercial project near the Shanghai Hongqiao International Airport.
Evergrande is now the owner of the project, Hongyuan Shengshi International Cultural City, according to an account by mainland real estate website Guandian. The 541,000 square metre development including grade A office buildings, a hotel, exhibition and entertainment facilities was previously owned by a consortium consisting of Hong Kong-listed furniture retailer Red Star Macalline, Shenzhen-based Shengshi Wanxiang Investment Management and Shouyuan Investment Management from Shenyang.
Construction work for the project, which is valued at RMB 13 billion, ceased after the main structure was topped out at the end of 2015, according to Guandian.
Halted Project Sits Near International Air Hub
The project is located on Hongqiao Land Parcel No 02 within the Phase I Core Area of the Hongqiao Central Business District (CBD), a new commercial and transportation hub west of downtown Shanghai. The consortium led by Red Star Macalline purchased the site for RMB 3.1 billion in late 2011.
Spanning 92,000 square metres (990,280 square feet), the site can yield a floor area of 541,000 square metres, of which 269,000 square metres are above ground. The plot connects Tonghong Road to the north, Suhong Road to the south, Shenwu Road to the west and Shenchang Road to the east, and is located across from China Vanke’s Hongqiao Vanke Center, an office complex with retail elements. Shanghai’s Hongqiao international airport is less than a 10-minute drive away.
The Shanghai municipal government began encouraging development of the Shanghai Hongqiao CBD around the transportation hub on the city’s western outskirts in 2009.
Covering 86 square kilometres, the zone which is close to the Hongqiao high speed rail station as well as the airport. is positioned as “a first-class global business district,” centred around modern services, trade, and exhibitions. Located approximately halfway between central Shanghai and Suzhou, the planned commercial centre began losing momentum when the city government shifted its focus to the Shanghai Pilot Free Trade Zone after it was approved in 2013.
Evergrande Branches Out from Home Building
Evergrande’s latest commercial property deal comes amid a series of investments in areas including electric vehicles and robots by the top three mainland home builder in recent months,
Just last month, Evergrande was reportedly spending $300 million to take over LeEco founder Jia Yueting’s loss-making electric car startup Faraday Future. A few days earlier, the company announced that it would partner with the Chinese Academy of Sciences (CAS) to invest RMB 100 billion ($16 billion) over the next decade in developing a trio of high-tech bases dedicated to life sciences, aviation, artificial intelligence and robotics.
The residential builder is ramping up its entertainment business as well. Evergrande Cinema Line said in February that it would open 200 cinemas in the country in the coming five years, doubling its total number of movie theatres to rival Dalian Wanda Group’s cinema arm.