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HONG KONG : A court auction to sell vast commercial land plots owned by defaulted Shimao Group in Shenzhen failed for a second time on Thursday as there were no bidders, highlighting weak demand in China’s property market.
Twelve land plots totalling 243,602 square metres, together with some uncompleted buildings on them, have asked for 10.4 billion yuan ($1.4 billion), 20 per cent lower than the 13 billion yuan starting price in the first auction in July, according to e-commerce company JD.com’s online auction platform.
China’s property sector, which has seen many company defaults since it slipped into a debt crisis in mid-2021, is struggling to stabilise due to a bleak economic outlook.
The Shenzhen plots were part of the land parcel bought by Shanghai-based Shimao in 2017, which planned to build a new landmark complex in China’s tech hub with the city’s tallest skyscraper.
Many of the assets of Shimao, which defaulted its $11.8 billion of offshore debt last July, were being sold to raise funds or were seized by creditors.
Media reports said the land plots, valued at 16.3 billion yuan, were the most valuable assets being auctioned by Chinese courts in seven years.
China’s government land sales revenue and property sales both fell at a faster pace in October, down 25.4 per cent and 20.33 per cent respectively from a year earlier, official data showed this week, suggesting the crisis-hit sector is yet to emerge from its decline despite Beijing’s support efforts.
Authorities have been ramping up measures to support real estate, including relaxing home purchase restrictions and lowering borrowing costs.
($1 = 7.2594 Chinese yuan renminbi)
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