What’s New: China Evergrande Group, one of China’s largest property developers, listed more than 200 commercial projects for sale in a major move to pare back assets, sparking concerns over its liquidity.
But an Evergrande spokesperson told Caixin that the sales are normal business operations and in line with the company’s long-term strategy, rather than a one-off sale. The company plans to sell offices, hotels and commercial sites with space larger than 1,000 square meters across the country, the spokesperson said.
An Evergrande manager said the company will shift to property management services for the projects after the sales.
Background: The massive asset sale drew market attention amid rising concerns over Evergrande’s debt overhang. Moody’s in late June downgraded the company’s credit outlook to “negative,” citing debt concerns.
By the end of 2019, Evergrande had debt totaling 799.9 billion yuan ($115 billion), equivalent to nearly 84% of total assets. Among them, 372 billion yuan of debt would be due within one year.
A real estate industry analyst said the high financial costs of maintaining commercial projects, accompanied by slowing business amid the pandemic, have forced most developers to cut holdings in commercial projects.
Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsmison@caixin.com)
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