R&F Properties sells majority stake in bay area logistics park for US$1.1 billion as China’s indebted developers look to offload assets

The developer is in breach of all three ‘red lines’ laid down in new government regulations aimed at curbing the build-up of debt

Savills predicts that debt reduction will be one of the major trends in the Chinese property market this year

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Guangzhou International Airport R&F Integrated Logistics Park in Guangzhou. Photo: SCMP Handout

Published: 7:30pm, 20 Jan 2021Updated: 7:44pm, 20 Jan 2021

R&F Properties has raised US$1.1 billion by selling a majority stake in its huge urban logistics park in the Greater Bay Area in a sign that heavily indebted mainland Chinese developers are gearing up to offload assets.

The sale of a 70 per cent stake in Guangzhou International Airport R&F Integrated Logistics Park to Blackstone Real Estate has been completed, according to a statement from Blackstone on Wednesday. The mainland developer still holds the remaining 30 per cent.

Savills predicted that debt reduction would be one of the major trends in the Chinese property market in 2021.

“The renewed focus on debt levels, especially in the real estate market, means challenges for developers, encouraging them to proactively offload noncore assets,” said the global property adviser in its latest report.

Cushman & Wakefield believes the recent introduction of tough new government rules designed to limit the borrowing capacity of developers already laden with debt will force many to raise capital by selling assets.

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