“Evergrande mansion” rings a bell? Once linked to China Evergrande Group’s chairman, Xu Jiayin, one of these Hong Kong Mansions was seized by receivers. Creditors sought to liquidate assets as the company faced a massive wind-up. It was once China’s largest developer.
This particular Hong Kong Mansion, known as House E at 10 Black’s Link, was managed for tender by Savills. This property brokerage firm made the announcement. Market sources valued the property on Hong Kong Island’s Peak area between HK$500 million and HK$550 million.
Raymond Wan of Savills Hong Kong noted the excellent location. He mentioned its proximity to well-known celebrities and notable families. He emphasized that this specific house had never been publicly available. It made it exceptionally rare. He added that luxury property prices had adjusted. This resulted in a decrease in transaction costs.
House E was part of a trio of luxury homes seized. The seizures followed Evergrande’s default in 2021. Creditors took action after the default. In November, Orix Asia Capital appointed receivers for House E and neighboring House C. At the time, the two properties had a collective value of HK$1.5 billion. Xu had pledged them as collateral for a HK$821 million loan in 2021. By current estimates, their combined value had dropped to HK$1 billion.
China Construction Bank (CCB) Asia seized the third property, House B, in November 2022. It was put up for sale in March 2023 with an asking price of HK$880 million. This house had been pledged to CCB Asia in 2021 for a HK$300 million loan. However, it remained unsold. Regulatory filings indicated that all three properties were held by entities connected to Xu.
House E is a three-story structure. It is located a 15-minute drive from Hong Kong’s Central district. The house has a saleable area of 4,933 square feet. It features an internal elevator, a private garden, and views of Deep Water Bay and Repulse Bay.
The sale of this Hong Kong Mansion was on an “as is” basis. The tender was tentatively set to conclude in April.
In addition to Xu’s personal assets, properties belonging to Evergrande were also seized. China CITIC Bank International took over the company’s Hong Kong headquarters in Wan Chai district in 2022. They later put it on the market for HK$9 billion. This 26-story office tower on Gloucester Road, now called YF Life Centre, also awaits a buyer.
Xu, also known as Hui Ka Yan, was taken into custody by mainland authorities in September 2023. He is suspected of “illegal crimes”.
Despite these events, Hong Kong’s luxury property market showed signs of activity. Prices for super luxury residences had fallen by 25 to 30 percent over the previous 18 months.
Raymond Lee of Savills noted the stability of the luxury property market in 2023. He mentioned the high demand for properties on the Peak and in the Southern District. The luxury property market had already recorded over five transactions exceeding HK$100 million in the first month of 2024.
Around the same time, an entity linked to the wife of Xu Hang acquired a mansion at 25-26 A&B Lugard Road at the Peak for HK$838 million. Xu Hang is the co-founder of Mindray Medical.
The sale of Evergrande mansion reflects adjustments and opportunities. It highlights the resilience and dynamics of Hong Kong’s luxury real estate market.