Jurong, the Chinese city in which “no one lives”

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Posted today at 01:03, updated at 18:25

Sitting around small round tables, Evergrande’s real estate agents pass the time: some are talking, cigarettes in their mouths, while others are leaning over their smartphones. Behind its facade of fake half-timbered houses, fairytale style, the large exhibition hall of the world’s most indebted real estate developer does have a few clients, but they have come to resolve administrative problems.

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Hu Cui, in his thirties, in a blue suit, hands a series of contracts to a slightly older woman in round glasses. The client, who came to sign, looks grimly: a year ago, she paid for her entire apartment a little over 9,000 yuan (around 1,212 euros) per square meter. Now, Evergrande is selling off some apartments in the same complex at 6,000 yuan per square meter … “But, even at that price, nobody wants it”, specifies the real estate agent. This client’s apartment was due for delivery in May. But workers have deserted the dozens of buildings under construction adjoining a gigantic amusement park project in Jurong, a small town east of Nanjing, in Jiangsu.

In Jurong Desert Theme Park (China), October 19, 2021.

Strangled by a debt equivalent to 260 billion euros, the promoter Evergrande has been at bay for two months. Friday, October 22, the group narrowly avoided the formal default by paying in extremis 83.5 million dollars (about 71.2 million euros) to foreign investors, after missing a deadline a month earlier.

This respite does not solve the basic problems of the company, which has already missed several other installments on its debts, and must also reimburse unpaid suppliers, complete apartments that its customers have paid in advance, often in full. In recent weeks, other over-indebted promoters, such as Sinic, Fantasia, or Modern Land, have also defaulted on important maturities.

On the edge of the abyss

The gigantic “Cultural and tourist town of Evergrande”, in Jurong, shows the reasons that brought the developer – and part of the Chinese real estate sector – to the brink. In 2017, as stone prices saw another spectacular rise in China, Evergrande launched fifteen projects combining amusement parks and residential real estate across China.

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In Jurong, Evergrande acquires 134 hectares of land. Half will be used to build the amusement park, the other half to build 56 buildings. From the park, only a few dozen houses, like cartoon outings, have been completed: they house the sales center and a few restaurants, all closed. A mini-market will definitely lower the curtain at the end of the month. “No one is coming, there is no more money. I am going to go back to my house “, testifies the only saleswoman, in her fifties, from Anhui, a poor province west of Jiangsu.

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