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KKR and AEW look to sell China commercial property holdings
The firms are marketing assets expected to generate proceeds sufficient to repay bank loans, implying valuations around 50% to 60% of original purchase prices.
KKR and AEW Capital Management are seeking exits from commercial property holdings in China as global investors pull back amid the country’s prolonged real estate downturn, ConnectCRE reported, citing Bloomberg News.
ConnectCRE said KKR is marketing nine properties across China, including a high-end apartment complex in suburban Beijing and a hotel on Shanghai’s historic Bund, while AEW is looking to sell several Beijing office assets and the Shanghai Pudong Development Bank building.
The outlet reported that sources told Bloomberg the companies expect any sales to generate enough money to repay bank loans, a structure that implies valuations of roughly 50% to 60% of the original purchase prices.
ConnectCRE added that overseas investors had put nearly $140 billion into Chinese commercial real estate over the past 15 years, but have largely become net sellers amid an economic slowdown and oversupply, along with weak leasing demand.