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Evergrande’s bid to sell Yuen Long plot, included in Hong Kong’s proposed Northern Metropolis, draws little interest

  • Evergrande has invested US$1.1 billion on the 2.2 million sq ft plot in the New Territories, which sits within the proposed Northern Metropolis
  • Evergrande, shouldering more than US$300 billion of liabilities, was reportedly willing to sell it for a US$115.6 million loss

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China Evergrande Group’s headquarters in Shenzhen, China. The developer, struggling with debt, is looking to offload assets across the board. Photo: Bloomberg
Lam Ka-sing
Few buyers are likely to step forward to buy China Evergrande Group’s plot in the northern New Territories, which falls under the planned Northern Metropolis, because of the high land cost and lack of a detailed blueprint for the mega project, industry observers say.
Last Wednesday, Chief Executive Carrie Lam Cheng Yuet-ngor proposed a new hub covering an area of 300 sq km, with an innovation and technology corridor serving as its engine. Once the entire Northern Metropolis is fully developed, which includes the Yuen Long and North districts bordering the mainland, it will be home to 2.5 million people in 20 years, she said.

The embattled mainland developer, desperate to trim over US$300 billion of liabilities, has been looking for a buyer for a 2.2 million sq ft plot in Yuen Long on which it has invested a total of nearly HK$8.9 billion (US$1.1 billion), the Sing Tao Daily reported in August. Evergrande bought the farmland, located near the Mai Po Wetlands, from Henderson Land for HK$4.7 billion in 2019 and paid almost HK$4.2 billion this year to convert it to residential use.

Despite Evergrande’s offer to sell it for HK$8 billion, or a loss of HK$900 million, no buyer seems interested, according to market observers.

Evergrande’s application for comprehensive development includes the wetland restoration area at Won Shang Wai, Yuen Long. Photo: Handout
Evergrande’s application for comprehensive development includes the wetland restoration area at Won Shang Wai, Yuen Long. Photo: Handout

Evergrande did not respond to phone and email requests for comment by the South China Morning Post.

Tom Ko, Cushman & Wakefield’s executive director of capital markets in Hong Kong, said prospective buyers could be waiting for a bigger discount as Evergrande could get increasingly desperate to offload the asset as debt payment pressure mounts.

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