Guangzhou R&F Sells Shanghai Office Block to Jinko Solar for $99M

Guangzhou R&F Properties took another step toward selling down its portfolio of assets, with solar panel manufacturer Jinko Solar Co Ltd on Tuesday having purchased a business park property in western Shanghai from the troubled mainland developer. 

Tower 3, which was purchased en bloc, is among a cluster of office blocks in the Hongqiao R&F Center about three kilometres (1.9 miles) west of Hongqiao Airport, and is valued at RMB 707 million ($99.2 million), according to a report by the news outlet of real estate e-commerce service Leju Holdings. Market sources who spoke with Mingtiandi have confirmed the deal. 

This transaction will provide Jinko Solar with a second office building in the business park, with the new addition sharing the same lobby with a headquarters building it purchased in 2018 for RMB 1.3 billion, a source said. 

With Tower 3 spanning about 16,200 square meters of currently vacant gross floor area, the solar panel manufacturer is buying the tower at the equivalent of RMB 43,640 per square metre, which is similar to the price Jinko paid to purchase its first piece of the park four years ago, another source said.

Yangtze Delta Headquarters Cluster

Located in the Hongqiao business hub in western Shanghai’s Minhang district, Hongqiao R&F Center includes eight grade A office buildings, four corporate mansions, retail spaces, and luxury residential buildings spanning a total of 410,000 square metres of total floor area, according to public information.

With each office building about nine floors tall, the aggregate office area in the project, which was completed in 2017, is about 180,000 square metres.

Jinko Solar moved to its new headquarters building in the park in May last year, with the nine-storey tower capable of housing 1,100 employees, according to an article published by the solar panel maker.

Other tenants in the business park include furniture retailer Red Star Macalline, drug maker Zhejiang Cheng Yi Pharmaceutical, automotive fine chemical manufacturer Delian Group, and Shanghai Rural Commercial Bank.

Jinko Solar was the world’s largest solar photovoltaic module maker by shipment in 2018 and 2019, but its ranking dropped to fourth in 2021, according to GlobalData. 

Asset Fire Sale

One of China’s most-indebted developers, Guangzhou R&F swung to a net loss of RMB 6.9 billion in the first half of 2022 from the RMB 3.2 billion net profit it booked in the same period a year ago. The developer recorded RMB 35.2 billion of contracted sales for the first ten months of this year, which marked a 66 percent plunge from the year-earlier period.

In an effort to avert default, the company has conducted urgent asset sales to free up cash.

In September, it sold its Wanda Realm Beijing hotel to a unit of Beijing Pengrui Real Estate for RMB 550 million, booking a loss of RMB 6.54 million for the disposal. In the same month, a serviced apartment joint venture belonging to R&F and KWG Group in Shanghai’s Yangpu district was sold to Brookfield for RMB 1.26 billion.

Guangzhou R&F received a reprieve in July as holders of 10 sets of offshore bonds totaling $5.1 billion granted the mainland developer additional time to pay off the notes. 

Earlier this month, the developer received approval from onshore bondholders to push out the maturities of eight notes totalling RMB 13.5 billion by about three years on average, further easing its liquidity crunch.