Shimao’s founder offers to sell two floors at The Center in Hong Kong as developer digs into his own pockets to pare company’s debt

Shimao’s founder Hui Wing Mau and his daughter Hui Mei-mei are asking for HK$1.6 billion (US$205 million) for levels 31 and 32 of The Center in Hong Kong

The two floors have a combined floor plate of about 50,000 square feet (4,645 square metres), according to a sales kit seen by South China Morning Post

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Exterior view of The Center building in Hong Kong’s Central area on 2 November 2017. Photo: Nora Tam

Published: 5:30pm, 18 Jan 2022Updated: 7:27pm, 18 Jan 2022

Shimao Group’s founder is putting two floors of the world’s priciest office tower on the market for sale, as even one of China’s more restrained real estate developers digs into his own pockets to pare a looming debt load.

Shimao’s founder Hui Wing Mau and his daughter Hui Mei-mei are asking for HK$1.6 billion (US$205 million) for levels 31 and 32 of The Center in Hong Kong, with a combined floor plate of about 50,000 square feet (4,645 square metres), according to a sales kit seen by South China Morning Post.

Hui, also known as Xu Rongmao in mainland China, was among the nine-member consortium that bought the 73-storey tower in early 2018 for HK$40.2 billion. Hui, who paid HK$8 billion for nine of the 73 floors at Hong Kong’s fifth-tallest building, was not available for comment, and spokespeople at Shanghai-based Shimao did not immediately respond to requests for comment.

Shimao is “relying on asset disposals and extending some short-term maturities to improve liquidity,” said Fitch Ratings, which cut the company’s credit rating to B- from BB last week. “Shimao’s ratings reflect decreasing margin of safety in liquidity amid deteriorating market confidence.

Shimao is seen as one of China’s more conservative borrowers, in a property industry where most developers rely on bank loans to finance their land purchases and constructions, amid a tight cap on prices and sales. The company was rated green under the Chinese central bank’s debt criteria when it announced its interim result in August 2021, a sign of compliance with the so-called three red lines of debt limits.

Shimao, China’s eighth-largest real estate developer by sales last year, faces 20 billion yuan (US$3.2 billion) of payments this year from onshore bonds and offshore notes, Fitch said. The company also faces debt obligations such as trust financing and around 10 billion yuan of asset-backed securities, of which 5.6 billion yuan is due this year.

China’s property debts as of March 2021. Sources: Northeast Securities, Tianfeng Securities. SCMP Graphics

Shanghai Shimao Construction Company, one of Shimao’s units, missed a US$101 million project loan guaranteed by the Hong Kong-listed group last week, according to a notice sent to investors by China Credit Trust (CCT), the trustee for the loans. The unit denied defaulting “on any loan in the open market,” and said that its failure to pay what was owed would not trigger demands for redemption.