The Hong Kong villa of a Kaisa Group Holding executive has been offered for sale at a discount by receivers, joining a growing group of mainland Chinese developers who are selling their assets at distressed prices amid the debt crunch and stagnation in China’s property market. House 17 of Bel-Air Rise in Pok Fu Lam, the third phase of the Residence Bel-Air luxury property project on the southwestern corner of Hong Kong Island, was put up for sale this week by a group of receivers, according to CBRE. The receivers include Cosimo Borrelli and Tai Shaw Hoong of New York-headquartered Kroll. The two-storey villa, spread over 3,953 square feet (367 square metres) is valued at between HK$260 million and HK$280 million, or a discount of up to 26 per cent compared with its HK$350 million (US$44.6 million) purchase price in 2017. Kaisa’s vice-chairman and chief executive Mai Fan held the villa through Million Link Development Limited, which previously listed the executive as a director. Million Link was taken over by the receivers appointed in December. Shenzhen-based Kaisa is struggling to raise cash as it faces US$11.4 billion of outstanding bonds and US$200 million of perpetual notes coming due in 2026, according to Bloomberg’s data. A property slump in China is damping the developer’s ability to sell homes, forcing Kaisa to dispose of assets to raise capital. The developer’s founder and chairman Kwok Ying-shing put 18 property projects in Shenzhen worth 81.8 billion yuan (US$12.8 billion) on the auction block late last year to raise cash. Kaisa sells Kai Tak property stake at discount to avoid default Kaisa sold the 38th floor of The Center office tower in Hong Kong in December to offset part of its debt, according to an exchange filing by China Shandong Hi-Speed Financial Group, which bought the space. A month earlier , Kaisa sold a project at Hong Kong’s former Kai Tak airport site to a venture between New World Development and Far East Consortium International for HK$1.9 billion cash and HK$6 billion in assumed debt, a steep discount to its HK$9.8 billion valuation in June. “If [a property] becomes foreclosed, it means [the owner] definitely cannot repay banks or financial institutions,” said Andy Lau, sales director at Midland Shops. “This is the third year with such an economy and situation, so some companies will see problems with their capital.” With the number of Covid-19 infections dropping significantly and restrictions on gatherings being relaxed in Hong Kong, property inspections were expected to return to normal, said Reeves Yan, executive director and head of capital markets at CBRE Hong Kong. He added that House 17 would attract the attention of buyers from areas such as Bel-Air and Pok Fu Lam. “In the past year, despite the pandemic, the extremely low supply of luxury housing and the flood of funds around the world have led to a lot of capital flowing into the luxury housing market”, thus maintaining the robustness of this segment, he said. Kaisa to sell US$12.8 billion in assets after wealth product default More properties are being offered in distressed sales of late, Yan said. An office building at 28 Austin Avenue near Hung Hom was put on the market by receivers for an indicative price of HK$200 million, said Lau of Midland. The original owner, a mainland Chinese investor with the surname Jin, bought it via a company for HK$212 million in 2012. The property has been mortgaged repeatedly over the past few years. “This is often the case – if some property appreciates, owners borrow money from financial institutions to buy other things,” said Lau. Sunac China Holdings was in talks with potential buyers to sell its stake in the world’s largest indoor ice and snow playground currently under development in Shenzhen, mainland media The Paper and Yicai Global reported on Tuesday. Sun Hongbing, the younger brother of mainland Chinese developer Sunac China Holdings’ chairman, sold three luxury flats at The Morgan and Arezzo in West Mid-Levels at a loss of some HK$126 million (US$16.10 million) this year, according to Ming Pao newspaper. Sun sold the 2,343 sq ft flat with a 460 sq ft rooftop at The Morgan for HK$138 million, 27 per cent lower than the HK$189 million paid in October 2018. The overall loss added up to HK$109 million, the biggest loss since coronavirus outbreak two years ago, if the 30 per cent stamp duty is taken into account, the report said.