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China’s former real estate leader, Evergrande, is struggling to alleviate its colossal debt. The company again sold land it owned in Shenzhen, southern China, for a billion dollars.
Strangled by a debt of some 300 billion dollars, Evergrande is now forced to sell land on which the group intended to build. This 10,377 m² plot had been reserved for its headquarters in Shenzhen, a sprawling technological center neighboring Hong Kong. It was sold to a local property developer.
Already at the beginning of November, the company had sold for 637 million dollars a land in the suburbs of Hong Kong where it intended to develop a complex of luxury villas.
Like other property developers in China, Evergrande is struggling to survive. The sector has been in the midst of a crisis since the Chinese authorities decided to tighten access to credit from 2020.
The health measures linked to Covid-19 have penalized activity and have only weakened the sector. Consequences: several real estate companies are now on the verge of bankruptcy. An embarrassing situation for those in power, especially since real estate and construction account for a quarter of Chinese GDP.
To revive activity, the Chinese regime has taken several measures such as credit support for financially healthy groups and access to liquidity to enable them to complete ongoing projects. He also extended deadlines for debt-ridden developers, like Evergrande.
►Also read : Chinese real estate giant Evergrande abandons the construction of a football stadium (August 5, 2022)