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Evergrande: Real estate giant moves from Shenzhen head office to cut costs

Image source, Reuters

Cash-strapped Chinese real estate giant Evergrande has moved out of its Shenzhen headquarters to cut costs.

Evergrande said it had moved to a property that it owns, but that it was still in the same city.

It comes as its rival Shimao Group said on Tuesday it is in talks with potential buyers for some properties as it tries to reduce its debts.

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The firms have come under intense pressure in the last six months after Beijing moved to curb their borrowing.

China’s property crisis is estimated to have wiped more than a trillion dollars off the value of the sector last year.

Evergrande, the world’s most indebted property developer, is struggling to make payments on its more than $300bn (£220bn) of liabilities and has missed payments on its offshore debt.

“In order to save costs, the company has gone through the lease cancellation procedures for Houhai Excellence Center in December 2021 and moved to its own property in Shenzhen,” Evergrande said in a statement on its website.

“The company’s registered place has not changed and is still in Shenzhen,” it added.

In September, the building was the scene of protests by Evergrande investors who crowded its lobby to demand repayment of loans and financial products.

Evergrande’s logo was seen being removed from the skyscraper’s facade on Monday.

However, it kept hopes alive that it could avoid defaulting for the first time on its onshore yuan bonds.

That came as it extended until Thursday a deadline for bondholders to agree to a six-month deferral on a $706m payment.

Evergrande’s Hong Kong-listed shares have lost almost 90% of their value in the last year as investors became increasingly concerned that it could be close to collapse.

Separately on Tuesday, real estate company Shimao denied a media report that it had entered into a preliminary agreement to sell one of its prime properties, the Shanghai Shimao International Plaza.

But the company did say in the statement to the Hong Kong Stock Exchange that it was “in discussions with certain potential purchasers and may consider disposing of certain properties if the terms and conditions are appropriate in order to reduce the indebtedness of the Group”.

Shimao’s shares were trading slightly higher on Tuesday, after surging by almost 20% the previous day.

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