(Yicai Global) June 2 -- Troubled Chinese property developer Shimao Group is auctioning its flagship Shimao Shenkong International Centre in a further effort to pay off its debt, at a starting price of CNY13 billion (USD1.8 billion).
The project includes the usage rights to 12 plots of land as well as attached buildings in Shenzhen's Longgang district. The auction will start on July 4 with an assessed price of CNY16.3 billion (USD2.3 billion) and a mark-up of CNY65.2 million (USD9.2 million) for each bid, according to the auction platform of e-commerce giant JD.Com.
Shimao bid CNY23.9 billion for the site in December 2017, and planned to invest CNY50 billion to create a mixed-use commercial area including offices, shopping malls, and apartments, with a planned 668-meter tower that would have become the tallest building in China.
But after China tightened the financing environment for developers in the second half of 2021, Shimao ended up default on debt last July. This led to the construction of Shenkong International Centre being stalled for a year, and work only resumed on a small scale last month.
In order to pay off debt, Shimao has sold a number of assets since last year, including equity in Hong Kong's Grand Victoria project and the Hyatt on The Bund in Shanghai.
Shimao has not released financial reports since its 2021 interim earnings. According to China Index Academy, the company's total sales in the first five months of this year were CNY23.9 billion, down 30 percent from the same period last year.
Editors: Dou Shicong, Tom Litting