A Chinese developer behind flagship Nine Elms regeneration has sold its 50% stake in one of the region’s biggest projects for a massive loss following disappointing demand from residents.
R&F Properties, which was developing Thames City with fellow Chinese developer CC Land, sold its stake to its partner for HK2.66bn (£270m), including a loan after the pair paid 470m pounds sterling for the site in 2017.
The company said it is expected to incur a loss of around £187 million from the divestiture after taking into account costs and investments in the project.
Thames City comprises 12 buildings including three skyscrapers, and is central to the regeneration of Vauxhall and Battersea. R&F and CC Land have changed plans in recent years as they struggle to attract residents, cutting the number of planned flats and racking up loans totaling £430million from Chinese state lender Citic and Lloyds Banking Group to complete the first phase of construction.
The Telegraph previously reported that fewer than 90 apartments were sold in 2020, more than half of them to related parties such as employees or friends of developers, according to documents filed by the company in Hong Kong.
R&F has been one of the hardest hit by Chinese President Xi Jinping’s “three red lines” policy, which has forced property developers to deleverage following rising liabilities in the sector.
The company also recently unloaded the nearby Vauxhall Square site, which has planning permission for two office buildings and 42- and 58-storey twin towers which will have a total of 578 according to planning permission.
R&F sold Vauxhall Square for a nominal £1, transferring £95.7 million of debt to Hong Kong rival Far East under the terms of the deal. The sum was 42% below the market value of the project.
The developer’s huge loss on the sale of the Nine Elms stake has been called “one of the biggest losses [on a sale] I’ve Ever Heard” by Knight Frank agent Martin Wong.
Boris Johnson endorsed the regeneration of Nine Elms when he was Mayor of London, describing it as “the final piece of the puzzle” for central London.
The scheme became increasingly controversial locally, due to residents’ concerns that speculative construction of luxury properties was dominating local construction.
R&F declined to comment on the deal.
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This notice was published: 2022-04-29 15:51:27