China Evergrande’s Hong Kong headquarters remains on auction block as Jack Ma-linked entity gets naming rights
- Speculation of a sale after nine months arose after Yunfeng Financial announced a name change for the 27-storey tower in Wan Chai
- Sole agent says no buyer has been found for the building, which Evergrande paid US$1.6 billion for in 2015
China Evergrande Group’s Hong Kong headquarters building – once a US$1.6 billion jewel in the developer’s crown – remains without a buyer after nine months on the auction block, despite speculation that a sale was imminent after an exchange filing revealed a name change for the tower.
Rumours of a sale flared up after Yunfeng Financial notified the Hong Kong stock exchange on June 23 that the 27-storey building, on Gloucester Road in Wan Chai, would change names from China Evergrande Centre to YF Life Centre.
YF Life Insurance International is a member of publicly listed Yunfeng Financial Group, whose major shareholders include Yunfeng Financial Holdings and Massachusetts Mutual Life Insurance Company. Yunfeng is backed by Jack Ma, the co-founder of Alibaba Group Holding, which owns the Post.
The building has not been sold, Savills, the property agent appointed by the property’s receivers as the sole agent for the sale, said when contacted by the Post on Monday.
It was “just simply changing the building name to the anchor tenant”, said Godfrey Cheng, deputy senior director at Savills Hong Kong. No money was involved in the name change, he added.
YF Life leases about 70,000 square feet in the building, which has a gross floor area of about 345,423 sq ft, including a lobby, shops and office floors with a typical size of 12,000 to 14,000 sq ft, as well as 55 parking spaces.
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Savills was appointed as the sole agent by the receivers from Alvarez and Marsal for the tender, but failed to garner any bids that met the requirements by the time the tender closed in late October.
YF Life, Yunfeng Financial and China Evergrande Group did not immediately respond to the Post’s requests for comments.
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On the legal front, Evergrande is also facing 1,426 unresolved lawsuits involving a total of 349.6 billion yuan as of April, according to the filing.
The developer was named a dishonest debtor in six cases in April by courts around the country for failing to “fulfil the obligations determined by effective legal documents despite its capability”. It was also ordered to pay out 2.92 billion yuan in 130 new enforcement notices.
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By 2025, about 1.83 million sq ft of new office space will enter the Hong Kong office market, primarily in Central and Wan Chai. With the vacancy rate in Central still at a high level and ample supply over the next 18 months, there is downward pressure on rents, Knight Frank said.
The consultancy added that in the short term, some landlords might reduce rents to attract tenants, but the reduction is likely to be less than during the pandemic. It expected office demand to remain subdued in 2023, with overall rents on Hong Kong Island to fall by 3 to 5 per cent for the whole year.
