Connect with us

World

China’s Evergrande Group agrees to demolish 39 apartment blocks on Hainan Island

Tim Newton

Published

 on 

China’s Evergrande property mess just became a whole lot worse. Now shares in the indebted property group have been suspended after the developer was told to demolish 39 buildings in Hainan, the island off the southern coast of China in the South China Sea.

To be clear, that is a demolition order for 39 under-construction buildings that have been built over the past 8 years at a huge resort-style development at the Ocean Flower Island project. The project was being constructed on the largest man-made island in the world, eclipsing anything being built in the Middle East, including the Palm Islands off Dubai.

Evergrande confirmed late on Monday, China time, that the property developer had received an order from Danzhou city authorities at the end of December to demolish the 39 condo towers.

Chinese media reports that building permits for the luxury development had been “illegally obtained”. The buildings cover 435,000 square metres.

Last November it was reported that authorities in Danzhou city had refused Evergrande’s plan to partially repay ongoing debts with contractors and suppliers for the project by offering them properties in the development.

The Evergrande Group is struggling to repay more than US$300 billion in liabilities, including nearly US$20 billion of international market bonds after it missed a series of payment deadlines in the second half of last year. The almost certain collapse of the group, in the largest property market in the world, could reverberate in world financial markets for years to come.

Evergrande, just one of many debt-stressed Chinese property developers, missed new coupon payments valued atUS $255 million which fell due last Tuesday (although there is a 30 day grace period for this payment). The Group has made no official statement about the matter.

The deepening liquidity squeeze saw the property developer shed 89% of its value during 2021. Nad the parent company’s electric vehicle division, China Evergrande New Energy Vehicle Group and their ‘Hengchi’ brand, dropped another 10% in early trading yesterday as contagion from the developer ricocheted around local markets.

Other developers at risk of default include Kaisa, which has lost 75% in value in the past year. A stress test of the Chinese property market rated by Fitch Ratings indicates potential liquidity strain for up to a third of the country’s real estate portfolio which could see a 30% decline in residential home sales revenue this year. The ratings agency also expects a knock-on effect for related industries, including construction, engineering and commodities.

Shares in Sunac China Holdings and Shimao Group Holdings plunged more than 10% following the news in yesterday’s trading. Fitch Ratings also estimates that a third of Chinese property developers could face a liquidity crunch during 2022.

Today the Evergrande Group announced that it will abide by the orders to tear down 39 structures on its flagship property project on Hainan Island.

Evergrande is not the only Chinese property developer engulfed by a liquidity crisis. Altogether the sector owes $19.8bn in US dollar-denominated offshore debt in the first three months of 2022, analysts at Nomura said last month. In the second quarter of this year, they must find another $18.5bn, while also meeting billions of repayments in local yuan debt.

Other developers at risk of default include Kaisa, which missed a huge repayment in December and which has twice suspended its shares in recent months. Its stock has lost 75% in value in the past year.

Analysts at S&P have estimated that one-third of Chinese developers could face a liquidity crunch in the next 12 months.

According to the SCMP, the Shenzhen-based developer will tear down 39 buildings on Island #2 of its Ocean Flower project in the Yangpu Bay according to a statement to the Hong Kong stock exchange.

SOURCES: Reuters | SCMP | Bloomberg

 

Get more from The Thaiger

Looking for your next home in Thailand? Let us match you with a local expert in minutes!

Thank you for your interest!

One of our agents will
reach out to you soon.

I want to:
  • Thailand (ไทย)+66
  • United States+1
  • United Kingdom+44
  • Australia+61
  • Afghanistan (‫افغانستان‬‎)+93
  • Albania (Shqipëri)+355
  • Algeria (‫الجزائر‬‎)+213
  • American Samoa+1684
  • Andorra+376
  • Angola+244
  • Anguilla+1264
  • Antigua and Barbuda+1268
  • Argentina+54
  • Armenia (Հայաստան)+374
  • Aruba+297
  • Australia+61
  • Austria (Österreich)+43
  • Azerbaijan (Azərbaycan)+994
  • Bahamas+1242
  • Bahrain (‫البحرين‬‎)+973
  • Bangladesh (বাংলাদেশ)+880
  • Barbados+1246
  • Belarus (Беларусь)+375
  • Belgium (België)+32
  • Belize+501
  • Benin (Bénin)+229
  • Bermuda+1441
  • Bhutan (འབྲུག)+975
  • Bolivia+591
  • Bosnia and Herzegovina (Босна и Херцеговина)+387
  • Botswana+267
  • Brazil (Brasil)+55
  • British Indian Ocean Territory+246
  • British Virgin Islands+1284
  • Brunei+673
  • Bulgaria (България)+359
  • Burkina Faso+226
  • Burundi (Uburundi)+257
  • Cambodia (កម្ពុជា)+855
  • Cameroon (Cameroun)+237
  • Canada+1
  • Cape Verde (Kabu Verdi)+238
  • Caribbean Netherlands+599
  • Cayman Islands+1345
  • Central African Republic (République centrafricaine)+236
  • Chad (Tchad)+235
  • Chile+56
  • China (中国)+86
  • Christmas Island+61
  • Cocos (Keeling) Islands+61
  • Colombia+57
  • Comoros (‫جزر القمر‬‎)+269
  • Congo (DRC) (Jamhuri ya Kidemokrasia ya Kongo)+243
  • Congo (Republic) (Congo-Brazzaville)+242
  • Cook Islands+682
  • Costa Rica+506
  • Côte d’Ivoire+225
  • Croatia (Hrvatska)+385
  • Cuba+53
  • Curaçao+599
  • Cyprus (Κύπρος)+357
  • Czech Republic (Česká republika)+420
  • Denmark (Danmark)+45
  • Djibouti+253
  • Dominica+1767
  • Dominican Republic (República Dominicana)+1
  • Ecuador+593
  • Egypt (‫مصر‬‎)+20
  • El Salvador+503
  • Equatorial Guinea (Guinea Ecuatorial)+240
  • Eritrea+291
  • Estonia (Eesti)+372
  • Ethiopia+251
  • Falkland Islands (Islas Malvinas)+500
  • Faroe Islands (Føroyar)+298
  • Fiji+679
  • Finland (Suomi)+358
  • France+33
  • French Guiana (Guyane française)+594
  • French Polynesia (Polynésie française)+689
  • Gabon+241
  • Gambia+220
  • Georgia (საქართველო)+995
  • Germany (Deutschland)+49
  • Ghana (Gaana)+233
  • Gibraltar+350
  • Greece (Ελλάδα)+30
  • Greenland (Kalaallit Nunaat)+299
  • Grenada+1473
  • Guadeloupe+590
  • Guam+1671
  • Guatemala+502
  • Guernsey+44
  • Guinea (Guinée)+224
  • Guinea-Bissau (Guiné Bissau)+245
  • Guyana+592
  • Haiti+509
  • Honduras+504
  • Hong Kong (香港)+852
  • Hungary (Magyarország)+36
  • Iceland (Ísland)+354
  • India (भारत)+91
  • Indonesia+62
  • Iran (‫ایران‬‎)+98
  • Iraq (‫العراق‬‎)+964
  • Ireland+353
  • Isle of Man+44
  • Israel (‫ישראל‬‎)+972
  • Italy (Italia)+39
  • Jamaica+1
  • Japan (日本)+81
  • Jersey+44
  • Jordan (‫الأردن‬‎)+962
  • Kazakhstan (Казахстан)+7
  • Kenya+254
  • Kiribati+686
  • Kosovo+383
  • Kuwait (‫الكويت‬‎)+965
  • Kyrgyzstan (Кыргызстан)+996
  • Laos (ລາວ)+856
  • Latvia (Latvija)+371
  • Lebanon (‫لبنان‬‎)+961
  • Lesotho+266
  • Liberia+231
  • Libya (‫ليبيا‬‎)+218
  • Liechtenstein+423
  • Lithuania (Lietuva)+370
  • Luxembourg+352
  • Macau (澳門)+853
  • Macedonia (FYROM) (Македонија)+389
  • Madagascar (Madagasikara)+261
  • Malawi+265
  • Malaysia+60
  • Maldives+960
  • Mali+223
  • Malta+356
  • Marshall Islands+692
  • Martinique+596
  • Mauritania (‫موريتانيا‬‎)+222
  • Mauritius (Moris)+230
  • Mayotte+262
  • Mexico (México)+52
  • Micronesia+691
  • Moldova (Republica Moldova)+373
  • Monaco+377
  • Mongolia (Монгол)+976
  • Montenegro (Crna Gora)+382
  • Montserrat+1664
  • Morocco (‫المغرب‬‎)+212
  • Mozambique (Moçambique)+258
  • Myanmar (Burma) (မြန်မာ)+95
  • Namibia (Namibië)+264
  • Nauru+674
  • Nepal (नेपाल)+977
  • Netherlands (Nederland)+31
  • New Caledonia (Nouvelle-Calédonie)+687
  • New Zealand+64
  • Nicaragua+505
  • Niger (Nijar)+227
  • Nigeria+234
  • Niue+683
  • Norfolk Island+672
  • North Korea (조선 민주주의 인민 공화국)+850
  • Northern Mariana Islands+1670
  • Norway (Norge)+47
  • Oman (‫عُمان‬‎)+968
  • Pakistan (‫پاکستان‬‎)+92
  • Palau+680
  • Palestine (‫فلسطين‬‎)+970
  • Panama (Panamá)+507
  • Papua New Guinea+675
  • Paraguay+595
  • Peru (Perú)+51
  • Philippines+63
  • Poland (Polska)+48
  • Portugal+351
  • Puerto Rico+1
  • Qatar (‫قطر‬‎)+974
  • Réunion (La Réunion)+262
  • Romania (România)+40
  • Russia (Россия)+7
  • Rwanda+250
  • Saint Barthélemy+590
  • Saint Helena+290
  • Saint Kitts and Nevis+1869
  • Saint Lucia+1758
  • Saint Martin (Saint-Martin (partie française))+590
  • Saint Pierre and Miquelon (Saint-Pierre-et-Miquelon)+508
  • Saint Vincent and the Grenadines+1784
  • Samoa+685
  • San Marino+378
  • São Tomé and Príncipe (São Tomé e Príncipe)+239
  • Saudi Arabia (‫المملكة العربية السعودية‬‎)+966
  • Senegal (Sénégal)+221
  • Serbia (Србија)+381
  • Seychelles+248
  • Sierra Leone+232
  • Singapore+65
  • Sint Maarten+1721
  • Slovakia (Slovensko)+421
  • Slovenia (Slovenija)+386
  • Solomon Islands+677
  • Somalia (Soomaaliya)+252
  • South Africa+27
  • South Korea (대한민국)+82
  • South Sudan (‫جنوب السودان‬‎)+211
  • Spain (España)+34
  • Sri Lanka (ශ්‍රී ලංකාව)+94
  • Sudan (‫السودان‬‎)+249
  • Suriname+597
  • Svalbard and Jan Mayen+47
  • Swaziland+268
  • Sweden (Sverige)+46
  • Switzerland (Schweiz)+41
  • Syria (‫سوريا‬‎)+963
  • Taiwan (台灣)+886
  • Tajikistan+992
  • Tanzania+255
  • Thailand (ไทย)+66
  • Timor-Leste+670
  • Togo+228
  • Tokelau+690
  • Tonga+676
  • Trinidad and Tobago+1868
  • Tunisia (‫تونس‬‎)+216
  • Turkey (Türkiye)+90
  • Turkmenistan+993
  • Turks and Caicos Islands+1649
  • Tuvalu+688
  • U.S. Virgin Islands+1340
  • Uganda+256
  • Ukraine (Україна)+380
  • United Arab Emirates (‫الإمارات العربية المتحدة‬‎)+971
  • United Kingdom+44
  • United States+1
  • Uruguay+598
  • Uzbekistan (Oʻzbekiston)+998
  • Vanuatu+678
  • Vatican City (Città del Vaticano)+39
  • Venezuela+58
  • Vietnam (Việt Nam)+84
  • Wallis and Futuna (Wallis-et-Futuna)+681
  • Western Sahara (‫الصحراء الغربية‬‎)+212
  • Yemen (‫اليمن‬‎)+967
  • Zambia+260
  • Zimbabwe+263
  • Åland Islands+358

    image

    Join the conversation and have your say on Thailand news published on The Thaiger.

    Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

    Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

    Tim Newton has lived in Thailand since 2012. An Australian, he has worked in the media, principally radio and TV, for 41 years. He has won the Deutsche Welle Award for best radio talk program (public radio Australia), presented over 11,000 radio news bulletins, 3,900 in Thailand alone, hosted 1050 daily TV news programs and produced 2,100 videos, TV commercials and documentaries. He also reported for CNN, Deutsche Welle TV, CBC, Australia's ABC TV and Australian radio during the 2018 Cave Rescue and other major stories in Thailand. As founder of The Thaiger in 2016, Tim is the current CEO for the company, based in their Bangkok HQ.

      Follow Thaiger by email:

      Myanmar17 seconds ago

      At least 3 killed, 7 injured as Myanmar’s army raid displaced camps in Kayah State

      Vietnam20 mins ago

      Vietnam eases entry procedures for foreign employees and returnees with valid visas

      Thailand26 mins ago

      Chon Buri villagers complain of air pollution from burning crops

      Sponsored1 day ago

      Top 11 Best Influencer Marketing Agencies in Thailand

      image
      Guides27 mins ago

      Innovative hotel trends you could witness in 2022

      Chon Buri32 mins ago

      Pattaya pushes forward with 300 million baht budget for Old Town Nakula project

      Indonesia1 hour ago

      More than a million Covid-19 vaccinations ‘expire’ in Indonesia before distribution to public

      image
      Join the conversation on the Thaiger Talk forums today!
      Thailand1 hour ago

      First meeting of Thailand’s Lower House this year adjourned due to lack of numbers

      Politics1 hour ago

      Thammanat Prompow, 21 MPs booted from Palang Pracharat

      Thailand2 hours ago

      Police suspect dead man found on Phuket beach had been sniffing glue

      Thailand2 hours ago

      Burmese migrants trafficked through Thailand caught by Malaysian border

      Property2 hours ago

      City Guide: Where to live in Bangkok as an expat

      Chon Buri2 hours ago

      One injured during dawn gunfight near Chon Buri’s Bang Saray Beach

      Bangkok2 hours ago

      Health Ministry will not shut down schools unless there’s a cluster

      World2 hours ago

      New Zealand closes its borders to arrivals over fear of Omicron outbreak

      Technology2 hours ago

      Facebook mistakenly banning ok content a growing problem

      Thailand4 months ago

      Morning Top Stories Thailand | Police to end protests, Human Trafficking | September 14

      Thailand11 months ago

      Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

      Tourism11 months ago

      Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

      Phuket11 months ago

      Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

      Tourism11 months ago

      Phuket Thai food treats you need to try | VIDEO

      Thailand11 months ago

      Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

      Tourism11 months ago

      In search of Cat & Dog Cafés in Phuket Town | VIDEO

      Thailand12 months ago

      Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

      Thailand1 year ago

      Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

      Thailand1 year ago

      Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

      Thailand1 year ago

      Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

      Thailand1 year ago

      Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

      Thailand1 year ago

      Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

      Thailand1 year ago

      Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

      Thailand1 year ago

      Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11

      Trending