By South China Morning Post | Created at 2025-03-27 23:34:38 | Updated at 2025-03-31 01:01:39
3 days ago
The world’s largest asset manager BlackRock is selling its last major asset in Shanghai for two-thirds of what it paid, as it beats a retreat from the country’s battered property market.
The US firm is selling Trinity Place, a 27-storey office tower on Changshou Road in Shanghai’s Putuo District for 900 million yuan (US$124 million), according to sources familiar with the matter. The asking price is 34 per cent lower than what it paid in 2017 to acquire what was then called Central Park from Hong Kong Shanghai Alliance Holdings, according to the Post’s calculation based on a stock exchange filing.
Earlier, BlackRock forfeited two office towers in Shanghai’s Waterfront Place business zone after defaulting on a 780 million yuan syndicated loan. The office complex is now being offloaded to DCL Investments, a distressed-assets specialist, for 700 million yuan. This represents a discount of more than 40 per cent from the acquisition price in 2018, according to reports from Bloomberg.
As the nationwide property slump continues to weigh on returns, BlackRock is not the only investor dialling back its presence in China. Foreign investors were net sellers in the country’s real estate market for a fourth straight year in 2024, buying just US$5.9 billion worth of office, hotel, industrial and retail assets, the lowest level since 2014, according to MSCI.
BlackRock, which recently struck a US$23 billion deal to buy global port assets from Hong Kong’s CK Hutchison Holdings, made no real asset transactions in China over the past five years, according to Cushman & Wakefield data.
“In 2017 and 2018, foreign investments in China’s commercial properties, particularly office buildings, were quite popular,” said Ted Li, senior director and head of capital markets for northern China at Savills. “These assets are now most severely impacted by declining rents and a significant drop in occupancy rates. There is also a decline in the overall value of the assets.”
Many owners are in a rush to sell due to a combination of factors, including the limited investment horizon and rising refinancing costs, even when the overall market is underperforming, he said.
