Two sets of properties in Shanghai’s Central Mansion property were auctioned off, according to the Chinese-language media Da Ji Yuan, on Feb. 8. Eight additional luxury homes will be auctioned off over the next ten days. According to reports, the properties were auctioned to repay the developer’s debts.
The Times Financial on Feb. 8 reported that the auction of ten sets of luxury mansions started at the original price with a 20% discount. However, the beginning price of each set still exceeded $1.57 million.
The Shanghai Zhi Fu Enterprise Development Group (Shanghai Zhi Fu) owns ten luxury homes, and it has $94.32 million in debts.
In an article in Caijing, Yang Fengning, a creditor, filed an application in court in 2020, alleging that Shanghai Zhi Fu, the developer of the Central Mansions, owed him $95 million for construction work and $9.5 million in liquidated damages. He also demanded payment within a specific time.
Shanghai Zhi Fu became a judgment debtor in May after failing to pay its debts on time, and the court confiscated and auctioned all ten suites on the 23rd to 28th floors of Building 10.
With the ten suites being auctioned off in bulk, it’s unlikely that the remaining properties on the 10th level of the Central Mansion will be available for sale.
According to the ruling instrument, the remaining 62 commercial properties on the same floor have become mortgaged. Therefore, Shanghai Zhi Fu must complete the mortgage registration procedures within five working days.
Tianyancha data shows that there are currently 531 legal lawsuits pending against Shanghai Zhi Fu, which involves many disputes over private loans and loan contracts. Shanghai Zhi Fu has become the judgment debtor six times, with a total amount of $433.544 million executed.
According to reports, when Shanghai Zhi Fu purchased the land parcel for the Central Premium Mansion project in 2008, the land parcel’s floor price was only $1,000. However, when the first batch of housing units in Central Premium City was launched in 2011, the unit price reached $5,309 per square meter.