Unique-Evergrande’s $1.7 billion Hong Kong headquarters sale flops as purchaser withdraws -sources By Reuters


© Reuters. FILE PHOTO: The company logo can be seen at China Evergrande Group’s headquarters in Shenzhen, Guangdong Province, China, Sept. 26, 2021. REUTERS / Aly Song


By Julie Zhu, Kane Wu and Clare Jim

HONG KONG (Reuters) – Chinese state-owned Yuexiu Property has pulled out of a proposed $ 1.7 billion deal to purchase the Hong Kong headquarters of China Evergrande Group because of concerns about the developer’s poor financial situation, they said two sources.

The collapse of talks to sell the landmark is yet another setback for the insolvent Evergrande, which has endeavored to dispose of some assets to repay creditors knocking on its doors. With more than $ 300 billion in debt, it has already missed three rounds of interest payments on its international bonds.

Yuexiu, based in the southern city of Guangzhou, was on the verge of closing a deal in August to acquire the 26-story China Evergrande Center in Hong Kong’s Wan Chai district, which serves as Evergrande’s local headquarters, the sources said.

However, the deal stalled after Yuexiu’s board of directors resisted the move because Evergrande’s unresolved debt would create potential complications in the smooth process of the transaction, they said.

Once China’s top-selling developer, Shenzhen-based Evergrande has been trying for the past few months to raise funds in both mainland China and Hong Kong by selling assets – from real estate to equity interests in subsidiaries.

Evergrande, whose bond fell 8.75% by more than 6% to 18.625 cents in June 2025, did not respond to a request for comment. Neither does Yuexiu.

The people refused to be identified for reasons of confidentiality.

Evergrande bought the port building, which is located in Hong Kong’s business and nightlife district and covers an area of ​​345,000 square feet, from local peer Chinese Estates Holdings for HK $ 12.5 billion (US $ 1.61 billion) in 2015.

This deal set a record for a single transaction of a commercial building in the Asian financial center with the highest square meter price at the time. It also made the property the Evergrande’s largest asset in town.

Evergrande funded the majority of the deal in more than HK $ 10 billion worth of securitized products, one of the sources said, meaning it would raise limited cash from the sale of the building.


Yuexiu’s board of directors, which focuses on real estate developments in China’s Greater Bay Area and has a presence in Hong Kong, was concerned about the certainty of the deal at a time when Evergrande’s future is uncertain, one of the sources said.

Yuexiu also received instructions from the southern Guangzhou city government to put the purchase on hold in late August, the person said.

A separate source familiar with the matter said the deal was halted in late August because the Guangzhou government wanted to first review Evergrande’s overall financial position in order to better understand the use of the proceeds from its asset sales.

The Guangzhou government did not respond to a request for comment.

Regardless, Evergrande is in final talks to sell a 51 percent stake in its property management arm Evergrande Property Services to domestic peer Hopson Development.

One of them said that both parties are finalizing details including financing for the buyer.

When asked about the deal, Hopson said all comments will have to wait for an announcement to be made.

The Hopson deal would be Evergrande’s biggest asset sale yet if it comes off. The ailing developer’s other business interests include a water bottling company and an electric vehicle manufacturer.

It is also about to sell its Guangzhou FC soccer stadium and surrounding housing projects to the Guangzhou City Construction Investment Group, Reuters reported last month.

($ 1 = 7.7784 Hong Kong dollars)

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