China Evergrande Group has returned 11 plots of state land back to city authorities in Wuhan, capital of Hubei province, after allowing them to lie fallow, in a sign of a festering cash crunch for the world’s most indebted property developer. The land parcels, measuring a combined 1.5 million square meters were surrendered to the authorities without compensation. The land, zoned for leisure and tourism and originally named Badeng New City, was bought for CNY5.6 billion in August 2017 from China Calxon Group, and renamed Evergrande Technology Tourism City, according to a filing by Calxon.
“The government of Xiajiang district made the decision to retrieve the land-use right of the 11 undeveloped parcels at the Evergrande Technology Tourism City on November 16, with no refund,” the Wuhan government announced. It is one among dozens of property projects across China that the Guangzhou-based developer – with more than USD300 billion of liabilities – failed to complete and deliver to buyers. In September 2021, the Anqing government in Anhui province canceled Evergrande’s rights to use state land to build its Evergrande Central Park project after it failed to pay the land price. Evergrande also had to return two sites totaling 350,000 sq m in the Sichuan provincial capital of Chengdu last December after leaving them idle for more than 10 years. Eight parcels of land were taken back by authorities in the Hainan provincial capital of Haikou last December. Both actions were taken with zero refund for Evergrande.
The developer returned the land-use rights on four parcels of land to the Guangzhou municipal government in August, getting a refund of CNY5.52 billion from the authorities. The land rights, for which Evergrande paid CNY6.813 billion in April 2020, were to build a football stadium as the home ground for the team owned by Evergrande’s Founder and Chairman Hui Ka-yan. Evergrande has been trying to offload its assets, collecting as much money as possible and formulating restructuring plans with its creditors after it officially defaulted last year. It failed to pay the interest on USD645 million and USD590 million of junk bonds last December, even after a grace period, triggering a cross-default on its other borrowings, the South China Morning Post reports.
