On December 23, the Alibaba Asset Platform disclosed a transfer announcement for non-performing loans of a Suzhou-based property company. Everbright Trust, as the sole mortgagee, is seeking to sell the non-performing loans tied to the Suzhou Zhongnan Center project.
As of March 31, 2024, the total principal and interest of the non-performing loans amount to approximately 1.27 billion yuan (1.2 billion yuan in principal and 71.37 million yuan in interest).
The collateral includes the 499.15-meter-tall under-construction Suzhou Zhongnan Center (formerly known as Zhongnan Center) in Jinji Lake West CBD, Suzhou Industrial Park, along with 16,600 square meters of land. The above-ground gross floor area is 364,300 square meters. The project has undergone multiple rounds of seizures, with this loan being a secondary lien. Additionally, the loan has secured 53 properties in Hangzhou Zhongjing Feiniaoke Business Center. The project loans began maturing on December 11, 2022, and legal proceedings have been initiated by creditors.
Currently, the main structure has reached a certain height before construction halted, leaving the project in a mortgaged state.
In terms of loan guarantees: - The guarantors are Zhongnan Holding Group Co., Ltd. and its chairman, Chen Jinshi. - Pledges include 1% equity of the Suzhou property company and 70% equity of a Shanghai-based management company. - The deficiency payment providers are a Zhongnan construction investment company, a Shanghai cultural tourism development company, and a Hangzhou property company.
Located at No. 68 Suxiu Road in Suzhou Industrial Park, adjacent to the west bank of Jinji Lake, the Suzhou Zhongnan Center was originally planned to stand 499.15 meters tall with 103 above-ground floors and 6 underground floors.
Initially intended to be Suzhou’s tallest building and Jiangsu’s second-tallest, the project had a planned construction period of five years. Construction began on January 3, 2014, but largely stalled after April 2015, experiencing multiple delays, prolonged halts, rumors of resumption, and eventual equity transfers.
On September 29, 2019, Jiangsu Zhongnan Construction Group Co., Ltd. (ST中南, 000961.SZ) announced the sale of the project company developing the landmark Suzhou Zhongnan Center to its controlling shareholder, Zhongnan Holding Group Co., Ltd., for approximately 441 million yuan. The latter’s actual controller is Chen Jinshi, chairman of ST中南.
In June 2012, ST中南 acquired the land use rights for Plot F in Jinji Lake West CBD for 66.3 million yuan. The project spans 16,600 square meters with a planned total construction area of 365,000 square meters. The project company, Suzhou Zhongnan Center Investment and Construction Co., Ltd., was established in September 2012.
Originally, the Suzhou Industrial Park Planning and Construction Bureau envisioned the Zhongnan Center as a 729-meter landmark, with 137 above-ground floors and 5 underground floors, aiming to be "China’s tallest under-construction building." The mixed-use skyscraper was slated for completion in 2021, featuring high-altitude sightseeing, clubs, a seven-star hotel, apartments, and offices.
ST中南 stated that the 500-meter super-tall complex was not a conventional real estate project, with government planning yet to be finalized. Due to its lengthy development cycle and high capital demands, Zhongnan Holding’s acquisition of the project company aimed to mitigate uncertainties.
However, in the revised plan released by Suzhou Industrial Park on April 24, 2020, the building’s height was reduced from 729 meters to 499.15 meters.
The project officially resumed construction on June 28, 2020. By June 3, 2021, the foundation slab was completed, followed by the core tube reaching ground level on September 30, 2021.
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