A Chinese developer behind the flagship Nine Elms regeneration has sold its 50pc stake in one of the biggest projects in the area for a massive loss following disappointing demand from residents.
R&F Properties, which was developing Thames City with fellow Chinese developer CC Land, has sold its stake to its partner for HK2.66bn (£270m) including a loan after the pair paid £470m for the site in 2017.
The company said it is expected to record a loss of about £187m from the disposal after costs and investment in the project were taken into account.
Thames City comprises 12 buildings including three skyscrapers, and is a central part of the regeneration of Vauxhall and Battersea. R&F and CC Land changed the plans in recent years as they struggled to attract residents, cutting the number of flats planned and racking up loans totalling £430m from the Chinese state lender Citic and Lloyds Banking Group to complete the first phase of building work.
The Telegraph previously reported that fewer than 90 flats were sold in 2020, with more than half sold to related parties such as employees or friends of the developers, according to company filings in Hong Kong.
R&F has been one of the worst hit by Chinese president Xi Jinping’s “three red lines” policy, which forced housing developers to reduce debt following a surge in liabilities in the sector.
The company also recently offloaded the nearby Vauxhall Square site, which has planning permission for two office buildings and twin 42 and 58-storey towers that will have a total of 578 according to planning permissions.
R&F sold Vauxhall Square for a nominal £1, transferring £95.7m of debt to Hong Kong rival Far East, according to the terms of the agreement. The sum was 42pc lower than the project’s market value.
The developer’s huge loss on the sale of the Nine Elms stake was labelled “one of the biggest losses [on a sale] I’ve ever heard” by Knight Frank agent Martin Wong.
Boris Johnson approved the regeneration of Nine Elms when he was Mayor of London, describing it “the final piece of the jigsaw” for central London.
The scheme has grown increasingly controversial locally, over concerns from residents that speculative building of luxury property was dominating local building.
R&F declined to comment on the deal.