Nationwide crackdown takes its toll on China’s P2P and internet finance industry
P2P platforms are dying out as authorities slam on the brakes in the wake of financial scandals involving billions of yuan
China’s peer to peer (P2P) lenders are bailing out from the luxury office buildings they once occupied as part of their high-end image, as the nation’s internet finance industry, once the hottest ticket in China’s financial circles, undergoes turbulent changes brought about by a nationwide crackdown on fraud in the sector.
On the 31st floor of Taiping Finance Tower, a financial landmark at the heart of the central business district (CBD) area in Shenzhen and right next to the new Shenzhen Stock Exchange building, the office formerly leased to the problematic P2P company Ezubao has been transferred to GF Securities, one of the most prominent securities companies in the Chinese market.
Another office formerly occupied by Ezubao in the same building, but on the 41st floor, is still vacant, pending a new tenant.
“Some high-end office buildings do not welcome P2P companies now. They worry that potential fraud from this sector would hurt the image of the building,” said Hu Qiang, a property agent handling office rental clients in the Futian district of Shenzhen.
“More than 30 per cent of the P2P companies closed down in the first quarter, or retreated from the CBD area. The leasing rate has dropped in some buildings, a rare situation for Shenzhen, where high-end office buildings have always been in short demand,” he said.
Some high-end office buildings ... worry that potential fraud from this sector would hurt the image of the building
A report issued by Cushman & Wakefield in late April noted that because of the tighter supervision over P2P platforms “vacancy rates in Grade A office buildings in the Futian and Luohu districts in Shenzhen went up in the first quarter, as a rising number of P2P companies closed up or surrendered their tenancy”.