A month ago, Vanke had a joint venture under its name and quietly completed the equity change-
Shanghai Xingxinman Enterprise Management Co., Ltd.
Prior to this, SCPG Group, a commercial real estate platform under Vanke, held a 50% stake in Shanghai Xingxinman.
The other half is held by the Government Investment Corporation of Singapore (GIC).
Shanghai Xingxinman has developed and owned a commercial project - Shanghai Nanxiang Impression City MEGA.
This is one of the core shopping malls under SCPG, and it is said that last year's sales were as high as 4.6 billion.
Among the more than 200 commercial projects developed and operated by Vanke, Shanghai Nanxiang Impression City MEGA ranks second in terms of revenue, second only to Shanghai Qibao Vanke Plaza.
Jointly developed and owned by SCPG and the Government Investment Corporation of Singapore (GIC), the mall is the second project in Chinese mainland by two business giants.
The first commercial project they collaborated on was Shanghai Qibao Vanke Plaza.
In 2020, when Shanghai Nanxiang Impression City MEGA opened, it became the largest single commercial shopping center in Shanghai.
In the Shanghai Nanxiang Impression City MEGA project, SCPG and the Government Investment Corporation of Singapore (GIC) originally held half of the shares.
But last month, SCPG quietly transferred a 48 percent stake in Shanghai Xingxinman to the Singapore Government Investment Corporation (GIC).
As a result, the Singapore Government Investment Corporation (GIC) increased its shareholding to 98 percent, while SCPG retained only 2 percent.
It is said that after the equity transfer, SCPG will continue to participate in the operation and management of Shanghai Nanxiang Impression City MEGA through the mode of small share trading.
In other words, SCPG just wants to take out the project equity it holds in exchange for money, and the financing demand is significantly stronger than the willingness to exit.
As real estate continues to decline, the financial pressure has also been transmitted to Vanke.
In April this year, at the general meeting of shareholders, Yu Liang, chairman of the board of directors of Vanke, made a reflection -
"In the past, Vanke did a lot of transformation and exploration business, and although most of them did well, the company's resources were limited."
"Part of the pressure on Vanke today comes from the company's use of funds from the development business for operating business, and as a result, the company's resources are not so sufficient."
"We have to focus on the core business again, and the company's resources can't take care of all the business, so we have to make trade-offs at this time."
"In addition to the three main businesses of residential development, property management and rental apartments, Vanke will withdraw from other businesses and clean up and transfer financial investments that are not its main businesses."
"Resolutely and vigorously promote commercial and other bulk asset transactions, and plan to complete 20 billion yuan per year."
Yu Liang's implication is that even the most core shopping malls will be put on the shelves.
You are short of money, and even if you empty your family and take out the best things for money, you will not be able to sell them for a high price.
Because everyone else is waiting to fall into the well and pick up the leaks.
In the past 20 years, in every downward cycle of the mainland property market, foreign investors have smelled the opportunity to buy the bottom and increase their positions.
At the beginning of the year, Vanke had sold its core commercial project with the largest revenue contribution, Shanghai Qibao Vanke Plaza.
The mall was also developed by Vanke in partnership with the Government Investment Corporation of Singapore (GIC).
Three years ago, the Government of Singapore Investment Corporation (GIC) sold its half-stake in Shanghai Qibao Vanke Plaza to Link REIT, a real estate investment trust from Hong Kong.
At that time, the market valuation of Shanghai Qibao Vanke Plaza was nearly 6.6 billion, and the Singapore Government Investment Corporation (GIC) gave a discount of less than 3%, leading the exhibition price to nearly 2.8 billion.
After a lapse of three years, Vanke also chose to sell the remaining half of the project's interests to Link REIT.
At this time, the market valuation of Shanghai Qibao Vanke Plaza has exceeded 7 billion.
However, the value of the project agreed between Vanke and Link REIT is only 5.2 billion, which is equivalent to a 7% discount.
In the end, Link REIT acquired the remaining half of the equity interest in Shanghai Qibao Vanke Plaza from Vanke for less than 2.4 billion.
As a result, all the rights and interests of Shanghai Qibao Vanke Plaza belong to Link.
After the acquisition of Link REIT, the mall was soon renamed Link Plaza Shanghai Qibao.
Vanke's traces have been quietly erased.
In just half a year, Vanke's two core shopping malls all fell into the pockets of foreign capital.
Not only Vanke, but another developer, Sino-Ocean Group, is also cutting meat and selling off its most valuable commercial projects.
Last month, at the same time that SCPG sold its 48% stake in Shanghai Nanxiang Impression City to the Government of Singapore Investment Corporation (GIC), Sino-Ocean Group, which had defaulted on its debt, sold its entire stake in INDIGO Phase II in Beijing to Chinese Life and Swire Properties.
Hong Kong-listed Swire Properties originally held a 35% stake in INDIGO Phase II in Beijing.
With this further acquisition of a 15% interest, it has acquired almost half of the interest in the project.
INDIGO Phase II is one of Sino-Ocean Group's most valuable commercial projects.
Although it is still in the development and construction stage and has not yet opened for operation, the market valuation is already as high as 12.2 billion.
Prior to the sale, Sino-Ocean Group was the largest shareholder of INDIGO Phase II in Beijing, holding nearly 65% of the project's interest.
Up to now, the net assets of INDIGO II in Beijing are 8.4 billion.
The equity consideration agreed between Sino-Ocean Group and Chinese Life and Swire Properties is less than 3.9 billion, which is equivalent to a seven-fold discount.
As the largest shareholder, Sino-Ocean Group has invested 6.3 billion yuan in the second phase of the INDIGO project in Beijing.
This withdrawal from the project, it is a loss sale, and it will generate a loss of up to 1.8 billion.
However, due to debt default and financial pressure, Sino-Ocean Group still chose to cut the meat and sell it.
At the end of 2022, it sold half of its interest in Sino-Ocean Taikoo Li Chengdu, another of its core commercial projects, to Swire Properties for more than $5.5 billion.
The editor checked, and the market valuation of Sino-Ocean Taikoo Li Chengdu was as high as 12.3 billion at that time.
It is said that the sales of the entire mall reached 11.5 billion last year, ranking sixth among the top ten shopping malls in the country.
In Chengdu, the bizarre and neon-lit Sino-Ocean Taikoo Li Chengdu is one of the top Internet celebrity check-in places.
In the minds of many people, it is synonymous with expensive, tyrant, and wealthy.
After Swire Properties took over the ownership of the project, it also quietly erased the traces of Sino-Ocean Group, and the mall has since been renamed Taikoo Li Chengdu.
In this round of property market downturn, mainland developers have suffered a heavy setback.
In order to repatriate their cash, they had to sell their most valuable business assets.
It took one or two decades for mainland developers to incubate, nurture and settle many valuable commercial projects, from land acquisition to development to commencement and operation.
Now, you can only choose to sell at a discount or even at a loss.
Sino-Ocean Taikoo Li Chengdu, Qibao Vanke Plaza in Shanghai, Shanghai Nanxiang Impression City MEGA, and INDIGO Phase II in Beijing, the best shopping malls in these big cities have since changed their surnames to foreign capital.
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Source | Gleaning Ground
Author | Eleventh brother
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