Embattled Property Giant Evergrande Sells Land As Debt Crisis Looms Across China
Embattled property giant China Evergrande has sold land earlier earmarked for its headquarters in the southern tech hub Shenzhen for USD 1 billion as it fights for survival. The real estate behemoth has been involved in restructuring negotiations after racking up USD 300 billion in liabilities following Beijing's crackdown on excessive debt and rampant speculation in the property sector. The 10,377-sq-mt (111,700-sq-ft) land in Nanshan district was sold to Shenzhen Anhe No. 1 Real Estate Development Co. for 7.5 bn yuan, according to land transaction records. Evergrande has scrambled to offload assets in recent months and its financial situation has worsened considerably since last year. Its troubles are emblematic of the crisis rippling across China's massive property sector, with smaller companies also defaulting on loans and others struggling to raise cash after Beijing imposed widespread lending curbs in 2020. Major developers including Evergrande have failed to complete projects, sparking mortgage boycotts and protests from homebuyers. The property market has long served as a motor for growth in China, on the backs of rising standards of living and high demand in a country where home ownership is seen as a prerequisite for marriage. But uncertainties linked to Covid-19, which have cooled demand and weighed on household income, are hitting buyers, at a time when several major real estate groups in China are in financial difficulty. The price of new homes contracted 1.6 percent year-on-year, their sharpest decline since August 2015, analysis of figures from Beijing's National Bureau of Statistics (NBS) showed. China's banking regulator earlier this month unveiled sweeping measures to support the property sector, including credit support for distressed developers to ensure the completion and handover of projects to homeowners.
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