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Editor of Every Economic Report: Chen Mengyu

On August 16, JD.com's asset trading platform showed that the second auction of 40% of the equity of Shanghai Changrun Jianghe Real Estate Development Co., Ltd. held by Shanghai Changrun Real Estate Development Co., Ltd. and Shanghai Jianghe Real Estate Development Co., Ltd. was completed. The starting price of this auction was about 4.814 billion yuan, with a deposit of 80 million yuan. One person signed up, but the auction failed because no one bid.

This is the second auction of the equity, and the first auction also failed due to no bids.

The main assets of the equity are part of the assets of the Gaoshangyuyu project located at No. 1518 Caoyang Road, Putuo District, Shanghai. Gaoshangyuyu is the first large-scale integrated project of Li Ka-shing's Cheung Kong Group in Shanghai. With a total construction area of ​​1.17 million square meters, it integrates hotel, office, residence, entertainment and other functions. It is known as the largest urban complex project on sale in Shanghai Central Ring Road.

Cheung Kong Group holds a 60% stake in the Gaoshangyuyu project, which is responsible for its development and operation. The project has now been basically completed.

The old market is still generating profits

In 2006, Cheung Kong acquired the A3-A6 plots in the Zhenru sub-center startup area in Putuo District, Shanghai, at a base price of RMB 2.2 billion, with a construction area of ​​approximately 1.17 million square meters. However, no construction began for a long time after the land was acquired, which was interpreted by some market voices as hoarding and reluctance to sell.

In April 2009, the construction of Zhenru A3-A6 plots, which were developed by Cheung Kong, officially started. On July 14, 2011, Cheung Kong held a project launch conference, and three projects under its umbrella, namely the Zhenru plot in Putuo, the Nanxiang plot in Jiading, and the Pudong plot, were launched simultaneously.

In response to the claim of hoarding properties, senior management of Cheung Kong Holdings said that it was not objective. Cheung Kong Holdings Executive Director Zhao Guoxiong said that the three projects including the Zhenru site "have made satisfactory progress since the start of construction."

On June 14, 2019, the A4 plot of Gaoshang Domain was launched for sale, with an average price of 90,402 yuan/square meter for the 1,108 units. Building 19 has a total of 23 floors with a height of 3.45 meters; Building 20 has a total of 23 floors with a height of 3.45 meters; Buildings 21A/B-22A/B have a total of 37 floors with a height of 2.97 meters; Buildings 23A/B-24A/B have a total of 38 floors with a height of 2.97 meters.

The second entry point was in April 2020, when the average price of the certificate was 90,724 yuan/square meter. The second phase consists of 348 units in the A6 plot, with a total of 4 buildings, 2 of which are 37 stories high, about 81-101 square meters, 2-3 rooms, two elevators and four households, and the other 2 are 31 stories high, about 158-160 square meters, 4 rooms, two elevators and two households.

Sometimes he is the banker, sometimes he is the player, he plays both real and fake, big and small - this old tail market that Li Ka-shing has arranged in Shanghai is still generating profits.

Waiting for a better price?

After launching the second phase of the project in 2020, Gaoshang Field was silent for a long time, but four years later it made a splash again.

In early March this year, news came from the Shanghai property market that there were surplus residential properties in the high-end area that were seeking to be re-certified, and the property-viewing agents put up slogans such as "It's like returning to the 90,000 era" and "Returning to five years ago".

On March 14, a property consultant at the sales department of Gaoshang Domain said: "The average sales price of this property is about 98,000 yuan per square meter, and each house has a different price. The sales price of some large-sized houses is about 89,000 yuan per square meter. There is no such thing as a 15% discount."

According to Shanghai Lianjia real estate agency, "The average price of Gaoshang Domain is 98,000 yuan per square meter, and about 70 units are 'cleared' by the developer when it was launched. Currently, the price of second-hand houses in the surrounding area is above 100,000 yuan per square meter, with an obvious upside-down phenomenon. This property was launched in 2019 and is currently in the state of ready-to-move-in sales. You don't need points, but you need to draw lots. If you can get one, the cost-effectiveness is relatively high."

Auction information shows that since the project as a whole has not been fully completed, it needs to be settled in a unified manner during the final comprehensive acceptance. At present, we have not received any identification materials or specific amounts required by government departments for payment of liquidated damages for late completion, and the relevant amount has not been accrued in the company's book value. After the auction is completed, this matter will be borne by the bidders themselves.

This may be one of the reasons why many potential buyers are deterred.

In fact, due to the attention that Li Ka-shing brings, there have been many rumors that Cheung Kong Group will acquire a 40% stake in the project company.

In early 2020, a media outlet asked Cheung Kong whether it was interested in acquiring the 40% stake held by the Herun Group in the Noble Field project. Cheung Kong responded to the media, saying, "The company would be interested in conducting a study. In fact, the company has the right of first refusal."

It is worth noting that Shanghai Xiangya Investment Consulting Co., Ltd., a subsidiary of Cheung Kong Holdings, participated in the auction as a preferred purchaser but did not bid. Whether the Li Ka-shing family is waiting for a better price remains uncertain.

Meijing Real Estate is integrated from Beijing News (reporter Xu Qian), Guandian, Jiemian News (reporter Wang Tingting), etc.

Daily Economic News