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KKR and AEW market China commercial property to repay bank loans
The firms are targeting asset sales that they expect will repay bank loans, with implied valuations of roughly 50% to 60% of original purchase prices.
KKR and AEW Capital Management are seeking to sell commercial property holdings in China as global investors retreat amid the country’s prolonged real estate downturn, ConnectCRE said, citing Bloomberg News.
ConnectCRE reported that KKR is marketing nine properties across China, including a high-end apartment complex in suburban Beijing and a hotel on Shanghai’s Bund, while AEW is seeking to sell several Beijing office assets and the Shanghai Pudong Development Bank building.
According to ConnectCRE, sources told Bloomberg that both firms expect any sales to raise enough to repay bank loans. The expected recovery level implies valuations of roughly 50% to 60% of the original purchase prices.
ConnectCRE also noted the wider backdrop for foreign investors, saying overseas investors put nearly $140 billion into Chinese commercial real estate over the past 15 years, but have largely become net sellers as property values fell and leasing demand remained weak.