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China Evergrande Group
Business

Evergrande says it will abide by orders to tear down 39 structures on its flagship property project in ‘China’s Hawaii’

  • Evergrande will tear down 39 buildings on Island No. 2 of its Ocean Flower project in Hainan
  • The demolition does not affect the remainder of the development, where 60,567 apartments have been delivered, with 628 units on their way, Evergrande said

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A display showing Evergrande’s China commercial projects in Beijing on December 7, 2021. Photo: AP
Pearl Liu
China Evergrande Group said it would abide by a government instruction to demolish more than three dozen structures on one of its flagship property projects in Hainan for breaching building approval procedures, as the woes pile up for the country’s most indebted developer.
The Shenzhen-based developer will tear down 39 buildings on plot 2-14-1 on Island No. 2 of its Ocean Flower project in the Yangpu Bay on the northwestern fringe of Hainan Island in southern China, according to a statement to the Hong Kong stock exchange. Evergrande did not provide details of what those structures or buildings are.

“The company will proactively communicate and handle the case in accordance with the demolition order from the local government in Hainan,” Evergrande said, adding that the tear down does not affect the remainder of the development, where 60,567 apartments have been delivered to buyers, with 628 units on their way.

Still, the demolition order piles on the financial woes of Evergrande, which is struggling to stay afloat with 1.97 trillion yuan (US$309.3 billion) of liabilities, of which at least US$186.1 million in offshore bond payments are due this month, US$2 billion in March and another US$1.045 billion in April.

Satellite image of China Evergrande Group’s Ocean Flower Island project in Yangpu Bay on the northwestern fringe of southern China’s Hainan Island, captured by the Landsat 8 satellite on May 6, 2020. Photo: Nasa Earth Observatory.
Satellite image of China Evergrande Group’s Ocean Flower Island project in Yangpu Bay on the northwestern fringe of southern China’s Hainan Island, captured by the Landsat 8 satellite on May 6, 2020. Photo: Nasa Earth Observatory.
The Ocean Flower project is a collection of five artificial islands in Yangpu Bay on the northwestern coast of southern China’s Hainan Island, often dubbed “China’s Hawaii” for its tropical climate, sandy beaches and duty-free shopping. The project measures 8 square kilometres, larger than Dubai’s Palm Jumeirah project and making it one of the world’s largest human-made islands.

Evergrande’s building permit was revoked by the Danzhou municipal authorities on December 30 because they were “illegally obtained,” according to the government’s order, adding that the buildings related to the breach had to be taken down in 10 days.

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