Exclusive | Tahoe, Chinese developer at biggest risk of default, tries to offload a dozen projects to ease liquidity stress
- Tahoe Group is seeking to sell 12 development projects it paid at least 40 billion yuan for in the last two years
- Developer’s weak turnover is partly down to its exposure in big cities, where regulatory controls are tight
Chinese developer Tahoe Group is seeking to offload a dozen projects that it bought for at least 40 billion yuan (US$5.97 billion) in the past two years, according to sources familiar with the matter.
It is the latest builder to resort to asset sales to raise cash in the face of mounting debts.
China’s 20th largest developer according to consultancy CRIC, Tahoe is a poster child of the sector’s debt-fueled growth, its expansion and ambition having outstripped most of its peers.
Tahoe emerged as the Chinese developer most at risk of defaulting on its debt in a Bloomberg poll of analysts and portfolio managers in January.
The 12 projects on offer, mainly residential developments with some attached commercial space, are in the cities of Guangzhou, Hangzhou, Shenzhen, Nanchang, Kunshan and Zhongshan. According to descriptions viewed by the South China Morning Post, they are under development, with the earliest batch of homes already on sale. The most recent plot was acquired in December.
Tahoe spent at least 40 billion yuan on the plots in 2017 and 2018, according to the Post’s calculations.
A senior executive with a private equity real estate fund said she had been approached by a third party about the sale of these projects. Declining to be named, she said she was not keen as she thought the projects would be difficult to sell.