Country Garden, a leading Chinese property developer, is advancing its global asset sales, including a £450 million ($570 million) residential project in East London. This move comes as the company grapples with the repercussions of defaulting on its offshore debt.
Knight Frank, a real estate agency, has been tasked by Risland UK, a subsidiary of Country Garden, to oversee the sale of the Calico Wharf development. This project, proposed to house 1,000 homes, is located in the Poplar area of London and is yet to commence construction.
As China’s leading private property developer, Country Garden has been significantly impacted by the real estate crisis that hit China in mid-2021. This downturn followed governmental efforts to curb escalating debt levels in the sector.
Facing challenges, the developer defaulted on offshore bonds totalling $11 billion in October and is currently navigating offshore debt restructuring. This situation has also led to an extension of its domestic note repayments.
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The real estate market is closely monitoring Country Garden’s restructuring, especially in the context of the recent developments with China Evergrande Group. Evergrande, known as the world’s most indebted property developer, faced a court-ordered liquidation in Hong Kong this week after failing to reach an agreement with creditors.
The London-based Calico Wharf project has already received planning consent for several structures, including a 23-story tower. It will feature both residential spaces and commercial areas, as per Knight Frank’s announcement.
In addition to this UK venture, Country Garden is also looking to divest assets in Guangzhou, China, aiming to raise 3.8 billion yuan ($530 million). Furthermore, the company plans to sell its share in its final Australian project, marking a significant step in its broader asset liquidation strategy.