This article is from the Australian Property Journal archive
ON the brink of default, Chinese development giant Country Garden has furthered its Australian asset sell down with the divestment of Melbourne estate Windermere for a reported near-$250 million.
The developer put the undeveloped component of the 366-hectare estate in Wyndham Vale, in Melbourne’s western growth corridor, to the market in the middle of the year with expectations of $250 million. According to the Australian Financial Review, the purchaser, Singapore’s Frasers Property, came close to meeting that figure.
Country Garden acquired the Wyndham Vale site in 2017 in a record $400 million deal, and unveiled plans for a 12,500-resident community a year later.
Windermere will support between 4,500 and 5,000 homes, four schools and a retail centre.
Frasers acquired a 115-hectare site in Wyndham Vale in 2016 that it has developed into its Mambourin estate.
Country Garden is also looking to offload the $2 billion Wilton Greens estate in Wollondilly Shire, south west of Sydney.
Amid China’s property sector crisis, Country Garden posted a US$6.72 billion loss first-half loss and now has $200 billion in liabilities, and in recent days reportedly missed its final deadline for a $15.4 million interest payment on a dollar bond. According to Reuters, two bondholder groups are seeking discussions about a potential debt restructuring package.
Country Garden recently said it expects it will “not be able to meet all of its offshore payment obligations when due or within the relevant grace periods”, its sales were “under remarkable pressure”, and available funds had declined further.
Amid reports of its Yeung Kwok Keung and chairperson Yang Huiyan, his daughter, leaving the country, Country Garden last week stated on its WeChat account that the pair were “at work as usual”.
China’s property sector has been reeling since Evergrande, dubbed the world’s most indebted developer, defaulted on debts two years ago following Beijing’s “three red lines” crackdown on the amount large developers could borrow.
The result has been countless unfinished homes across the country, and people who have purchased their homes off-the-plan refusing to make mortgage payments.
Restructuring of Evergrande, which still has US$327 billion in debts, has begun to falter. Evergrande has said that it cannot issue new debts to restructure its offshore liabilities due to the investigation into its Hengda Real Estate Group. Its billionaire founder and chairman Hui Ya Kan has been detained by Chinese police and put under surveillance, while it was reported that he is being investigated over allegations that he attempted to assets offshore while the company struggled to finish projects.
