Evergrande exits as coal tycoons take over, Shanghai North Bund project sees revival
At the end of 2023, the debt-ridden Evergrande transferred its 30% stake in the Shanghai North Bund project to Everbright Trust. Since then, Everbright Trust has fully owned the project. However, the transfer of the project did not end there.
Shortly after Everbright Trust took over, the Shanghai North Bund project welcomed a "coal boss"—Inner Mongolia Yitai Group. Thanks to Yitai's entry, the long-stalled development process of the project finally restarted. The latest news is that the project will commence construction in the third quarter.
Yitai, the "coal boss" who boldly ventured into Shanghai, has increasingly piqued market curiosity.
History of the North Bund Project Transfer
Rewinding to 2022, Evergrande was still a large real estate company with a scale of 700 billion yuan, at its peak.
To ensure sustained rapid growth, Evergrande needed to continuously seek more project opportunities. At the same time, Evergrande was constantly adjusting its investment strategy, further increasing the proportion of projects in first- and second-tier cities to enhance profitability and better withstand market volatility.
Even today, Shanghai remains one of the core cities where real estate companies focus their 布局. In the still-thriving real estate market at the time, its strategic significance was even greater. Evergrande was equally unwilling to miss any investment opportunities in Shanghai, especially in the core downtown areas.
In September of that year, Evergrande defeated Poly and acquired the Shanghai North Bund project for 2.295 billion yuan, with a premium rate of 10.87%, equivalent to a floor price of 51,000 yuan per square meter. The project was highly regarded by the market even before its launch. It was reported that the estimated market price for the salable residential floor area was 114,700 yuan per square meter.
The project is located in Block 63 of North Bund Street, Hongkou District, Shanghai, and consists of two plots numbered HK286A-03a and HK286A-03c, with a total area of 12,545 square meters and a planned total area of 45,000 square meters. This includes 20,000 square meters of residential construction area, 25,000 square meters of commercial and office construction area, and approximately 5,600 square meters of preserved historical buildings.
To reduce capital 沉淀， Evergrande quickly introduced trust funds after acquiring the land, transferring 70% of the project's equity to a subsidiary 99.94% owned by Everbright Trust. Since then, Evergrande held 30% of the project's equity, while Everbright Trust held 70%.
However, the injection of new funds did not accelerate the project's development. By the time Evergrande exited, the project had not yet started construction and faced risks of penalties and 回收 due to long-term idleness. According to market sources, the only progress made in the three years since acquiring the land was partial restoration of the old buildings on the site.
Later, as Evergrande 陷入 debt 困境， the development of the Shanghai North Bund project was 搁置. For Evergrande, however, the project remained a 优质 asset, and the company could still 减轻部分债务 by transferring it.
In December 2023, Evergrande transferred all its 30% stake to Everbright Xinglong Trust for a total consideration of approximately 663 million yuan. After the transaction, the project was fully owned by Everbright Trust.
The equity transaction for the Shanghai North Bund project did not end there.
The 30% stake did not remain with Everbright Xinglong Trust for long. Within less than 15 days after the transaction, Everbright Xinglong Trust transferred it to Yitai Real Estate (Shanghai) Co., Ltd. According to Tianyancha, Yitai Real Estate (Shanghai) Co., Ltd. is a subsidiary of Inner Mongolia Yitai Group Co., Ltd.
Since then, the Shanghai North Bund project has finally 迎来生机， and Yitai has officially entered Shanghai's core real estate market.
Who is Yitai?
Although the name "Yitai" may be somewhat unfamiliar in the real estate industry, it is quite notable in the coal sector.
Information shows that Inner Mongolia Yitai Group Co., Ltd. was established in March 1988. It is a large clean energy enterprise based on coal production, transportation, and sales, integrating railways and coal chemical industries, with real estate development and modern agriculture as complementary businesses.
As of now, Yitai Group has 74 direct and indirect 控股 subsidiaries, with total assets exceeding 100 billion yuan and over 6,300 employees. Its business has extended to more than 20 domestic provinces and cities, including Beijing, Shanghai, Guangdong, Jiangsu, Zhejiang, Xinjiang, Hainan, and Sichuan, as well as countries like Russia and Australia.
Yitai Real Estate is the platform under Yitai Group responsible for real estate development. Its business is mainly 布局 in the Hohhot-Baotou-Ordos urban agglomeration and has expanded to cities such as Haikou, Chengdu, and Qinhuangdao, with total assets of nearly 20 billion yuan.
According to its official website, Yitai Real Estate has developed over 2.55 million square meters, with 14 累计开发 projects. It currently has 14 completed projects, including Huafu Lingxiu and Renhe New City; 8 拟建 projects, such as CEO International Center Phase II and Caofeidian Yitai Plaza Phase II; 5 转让 projects, including Dalu Zhongkeyuan and Hohhot Huimin District; and 3 land reserve projects, such as Hangjin Banner Pharmaceutical Factory Plot and Kangbashi Solar Energy Plot.
Based on publicly available information, the Shanghai North Bund project will be Yitai's first project in Shanghai.
From related information, it appears that Yitai has long had the intention to invest in Shanghai's real estate. According to Qichacha, the entity acquiring the Shanghai North Bund equity, Yitai Real Estate (Shanghai) Co., Ltd., was established on September 29, 2019, with registered capital of 30 million yuan.
However, as of now, Yitai 似乎 has not found suitable project investment opportunities in Shanghai. To date，包括 Yitai Real Estate (Shanghai) Co., Ltd., none of its Shanghai real estate companies have 实体 projects. In the past, Yitai only indirectly 涉足 Shanghai's real estate market by investing in Shanghai Zhongcheng Alliance Investment Management Co., Ltd.
Currently, as the real estate market enters a deep 盘整 phase with cooling property prices, Yitai is also 找准 the right time to 抄底 and 正式 launch a 强攻 on Shanghai's real estate market.
New Buyers in the Property Market
Yitai is not the only "coal boss"淘金 in the property market recently. Over the past two years, with the 煤炭 industry's 景气提升 and gradually 释放的政策利好， cash-rich coal bosses have begun 重返 the property market, targeting 黄金地段物业 in core cities.
Similarly 来自 Inner Mongolia, Yongpeng Industrial acquired the last three apartment buildings of Zhongliang Haijing Yihao for a total consideration of 4.142 billion yuan at the end of 2023. The project is located in Shanghai's Lujiazui financial core area, adjacent to 汤品一臣， with 一线江景， and is a 顶级豪宅 on the Huangpu River.
Business 资料显示， Yongpeng Industrial is 70% owned by Yu Hongze and 30% by Liu Yancao. Yu Hongze serves as executive director of Inner Mongolia Mingman Energy Co., Ltd., which is controlled by Liu Manshi, founder of Manshi Group. Liu Yancao is the legal representative of several companies, including Ordos Huifeng Coal Energy Co., Ltd. and Ordos Derun Tianze Equity Investment Co., Ltd. Manshi Group also holds equity in Derun Tianze.
In addition, other "coal bosses" from Inner Mongolia, Shaanxi, or Shanxi have 相继 acquired core assets such as China Jinmao Beijing Westin Hotel, Gemdale Beijing Real Estate, Shanghai Joy City Center, and Shanghai Suhewan Center office buildings.
"Coal bosses" have always been important buyers in the real estate market. Moreover, some 煤炭企业 have chosen to directly acquire land for development. In October 2023, Shanxi Jinhui Energy Group's subsidiary Shanxi Jinhai won the bid for plots in Fangshan District, Beijing's Gongchen Street FS00-0111-0006, etc., for 1.51 billion yuan, with a 溢价率 of 10.22%. Shanxi Jinhai's intention to 加码 the real estate business is very clear. Prior to this, it had also participated in the 竞拍 of Shunyi New Town Plot 19-69 in Beijing.
Before this，来自 Shanxi's Taiyuan Cuifeng acquired a plot in Chengdu's Longquanyi Shiling 板块 for 2.253 billion yuan, with a 溢价率 of 15%. The company had also participated in the 竞标 of two plots in Beijing's Haidian Shuangxincun and a residential plot in Shenzhen's Baoan.
Apart from the 煤炭业， traditional 实业资本 from industries like cement and liquor, as well as 金融机构， have 纷纷 joined this property market 淘金赛. The market 判断 that with the real estate market 回暖， more 实业资本 may become new buyers in China's real estate market in the future.
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