The two assets under the name of Zhongdi Hebang with a total valuation of about 1.58 billion yuan are being disposed of at a discount.
The third time it was put on the shelves, two assets were transferred from auction to sale, and the sale price was only 5.5% off the valuation.
The two assets sold were a 36.5-acre plot of land in the Zhongdi Center at Chengdu East Railway Station and a Zhongdi Genesis A area next to the East Second Ring Road. It is reported that the two assets have been auctioned twice before, but in the end they were auctioned because no one signed up.
Different from the judicial auction bidding cycle of 1 day, the sale cycle is 60 days, the bidder bids at any time in the 60-day sale period, and the sale automatically enters the 24-hour bidding countdown; in the 24-hour bidding cycle, other sellers can increase their bids, and if someone bids within 5 minutes before the end of the bidding, the system automatically postpones the time backwards by 5 minutes (the cycle repeats until the last 5 minutes without bidding).
Compared to judicial auctions, the sale procedure gives the buyer more time to consider.
1 No one asked for both auctions
Public information shows that as an important part of the commercial sector of Chengdu East Railway Station, after taking land in 2013, Zhongdi Center started construction in August 2018, with the characteristic planning concepts of "Hengshu Stacked Green", "Wide Streets and Narrow Alleys", etc., it was declared to be another benchmark work of Zhongdi Hebang in Chengdu after Zhongdi Genesis, and in 2019, the project was once rumored to launch commercial products with a construction area of 70-200 square meters, but with the "explosion" of Zhongdi Hebang, the project has not moved.
It is reported that there are two plots of land in Zhongdi Center, one with an area of about 29 mu and one with an area of about 36.5 mu, and it is the latter that will be sold. According to the land valuation report, the land parcel to be auctioned covers an area of 24,339.14 square meters (equivalent to 36.51 acres), the land use is commercial land, the floor land price is 3,291 yuan / square meter, and the appraisal price is about 440 million yuan.
The plot has previously been auctioned twice on December 29, 2021 and January 22, 2022, with the first starting price of about 308 million yuan and the second starting price of about 246 million yuan, but both auctions were re-auctioned due to no one signing up.
Another asset that is being sold, Zhongdi Genesis A, located off the East Second Ring Road, also has a similar fate to the plot.
According to public information, the Zhongdi Genesis Plaza Area A project is a project under construction on the 363-4 to 39 floors of Xinhong Road, Chenghua Avenue, Chenghua District, Chengdu, including -4 to -1 parking spaces, -2 to 6 floors of commercial, 4 floors of cultural facilities (cultural hall), 5 floors of cinema, 3-9, 11-24, 26-32 floors of hotels, 33-39 floors of office facilities and supporting rooms, and even the roof is designed with a helipad. The total construction area is 126280.93 square meters, the area of commercial land use rights is 11975.31 square meters, and the plot ratio is 6.92.
On October 30, 2021, the first auction of the project, the appraisal price is about 1.139 billion yuan, the starting price is about 797 million yuan, the discount is about 30%, and by the second auction on November 18, 2021, the starting price will be reduced to about 638 million yuan, with a discount of about 5.6%.
In less than a month, the auction value of Zhongdi Genesis Area A has dropped by about 160 million yuan, and both auctions have been auctioned because no one has signed up.
Recently, when the Daily Economic News reporter visited Zhongdi Genesis A Area, he saw that the project as a whole was in a state of completion, and the billboard printed with the words "33-39 floors 5A Grade A office building for sale" was also hung on the external wall of the project. Since it was not open to the public, all the doors of the street shops were closed, and from the glass windows, it was a mess, and none of them had been renovated, and there were notes on the doors for rent or resale.
There is some desolation inside the project, and every reporter Chen Li photographed
The reporter visited and found that the project is located in the inner side of the second ring road, adjacent to Chenghua Avenue Xinhong Road, which is convenient for travel and has a strong surrounding living atmosphere. Across the second ring road is its B-area project, which has hotels, shopping malls and so on.
However, the reporter learned from the property side that the current office building settlement in Area B is not ideal, "not more than half".
2 Sustained losses are severe
In fact, the sale of the two assets was due to the dispute over the financial loan contract between the bank and Zhongdi Hebang, and the relevant bank applied for compulsory enforcement. It should be noted that since 2018, Zhongdi Hebang has begun to suffer serious losses.
"In fact, many of the projects of Zhongdi Hebang were not taken by it on its own initiative, but in order to repay the loans of other financial institutions and undertake non-performing assets, including the Zhongdi Genesis project." An informed source told reporters that although the Zhongdi Hebang East Railway Station project took land very early, its transfer conditions are more stringent than those of surrounding projects. Under the same land transfer conditions, the Jia Nian Hua Plaza next to the project can all be sold, but only 30% of the Zhongdi Hebang project can be sold to the outside world, and the other 70% needs to be self-operated.
This also led to a liquidity crisis in 2020 in Zhongdi Hebang, which was not originally "rich". In February of that year, a screenshot of the Zhongdi Hebang company group showed that "due to the company's current financial difficulties and the impact of the epidemic, it is unable to pay its january and February 2020 wages"; at the same time, the Di Center (located next to the East Railway Station) in which it played the slogan "Rebuild Pancheng Steel" also came to a standstill.
According to insiders, Zhongdi Hebang is currently focusing on the treatment of existing assets, and it is not expected that there will be new assets in the future.
At the same time, the profitability of Zhongdi Investment (*ST Zhongdi, 000609.SZ) of Zhongdi Hebang Founder Li Qin Holdings has also been declining in recent years. In November 2020, *ST Zhongdi issued an announcement that in order to recover funds as soon as possible and prevent the loss of real estate projects from having a greater impact on the overall operation of the company, the company decided to comprehensively dispose of the existing real estate investment projects in stages and steps, and no longer acquire new real estate development projects and withdraw from the existing real estate secondary development field.
To make matters worse, in February 2021, Li Qin was investigated and taken compulsory measures by the Public Security Bureau of Anyue County, Ziyang City, Sichuan Province, for suspected violations of the law.
In the first three quarters of 2021, the company achieved operating income of 53,103,657.66 yuan, a year-on-year decrease of 43.07%, and net profit attributable to shareholders of listed companies was -117,266,669.97 yuan.
Written | Chen Li
Edit the | Chen Mengyu
Cover image source: Per reporter Chen Li photo