Is the headquarters going to be sold? It is rumored that R&F Properties' super Grade A landmark building is planned to be sold in its entirety, with a unit price of only 15,000 yuan per square meter.
According to media reports, the R&F Center in Zhujiang New Town, Guangzhou is planned to be sold as a whole, with an initial packaged quotation of about 15,000 yuan per square meter. Calculated based on the total construction area of 162,500 square meters of the project, the total transaction price is about 2.4 billion yuan.
As a benchmark of Guangzhou's super Grade-A office buildings, R&F Center is a 243-meter landmark with high recognition on the central axis of Zhujiang New Town. Its design prototype is a jade cong. Completed in 2007, it has a total of 55 floors, of which floors 1 to 4 are for commercial use, floors 5 to 44 are for office lease, and floors 45 to 54 are the headquarters of R&F Properties. The average price on the property information page is about 181 yuan per square meter per month, and the actual quotation on the agency's scattered lease page is about 60-90 yuan per square meter per month.
Relevant information
According to market sources, R&F is in contact with potential buyers. However, no official disposal announcement has been issued by R&F Properties or the exchange so far, and neither the price nor the transaction structure has been confirmed by both parties.
The currently rumored unit price of 15,000 yuan per square meter is a sharply discounted price that has surprised the industry. This year, R&F Yingxin, which is also located on the west side of the central axis of Zhujiang New Town, has undergone two judicial auctions. One was the connected office space of 12 units on the 41st floor, with a construction area of about 1,666 ㎡ and a transaction unit price of about 17,500 yuan/㎡; the other was 3 office units on the 37th floor, with a construction area of 230-327 ㎡ and a transaction unit price of about 18,100-18,800 yuan/㎡. However, R&F Yingxin is a Grade-A office building, while R&F Center is a super Grade-A office building, and the asset quality of the latter is one level higher.
Source of the picture: Internet
The planned sale of Guangzhou R&F Center is directly related to the pressure on the office market and the R&F Group's own financial situation. According to data from Cushman & Wakefield, by the end of the third quarter of this year, the stock of Grade-A office buildings in Guangzhou exceeded 7 million square meters, the vacancy rate rose 0.9% month-on-month to 20.8%, and the average rent fell 2.8% month-on-month to 120 yuan per square meter per month. Among them, the vacancy rate in the Zhujiang New Town area is 19.7%, and the pressure on leasing is relatively high.
However, R&F's own financial situation is gradually deteriorating. According to the company's announcement, in the first three quarters of this year, the total sales revenue was about RMB 9.71 billion, and the sales area reached about 1,404,300 ㎡, less than 10% of the performance during the peak period.
Guangzhou R&F Center is also a witness to the most glorious period of R&F Properties. In 2007, when the project was completed, R&F ranked fourth in the industry with sales of 16.1 billion yuan, and the corresponding net profit of the company reached 5.303 billion yuan. In this year, R&F took 21 plots of land in one go, with the total land price of three "land kings" in Beijing, Tianjin and Guangzhou reaching 11.2 billion yuan, and it carried out radical expansion with nearly 20 billion yuan of debt.
But ten years later, in 2017, R&F took over Wanda's hotels for 19.9 billion yuan, which was regarded by the industry as the turning point for the company to enter a declining stage. In August 2020, the "three red lines" regulatory policy was implemented, and R&F turned to the strategy of "selling assets one after another". Assets including the Huadu Logistics Park, R&F Properties, 50% equity of Thames City in London, Australian plots, and three hotels in Beijing, Fuzhou and Zhenjiang were successively transferred. After struggling for more than a year, R&F failed to repay its maturing domestic debts in March 2022, which marked its first default in the public market, and then entered the stage of debt extension and debt resolution. However, due to the failure to restore sales and the large discount on asset transfers, R&F experienced a second default in 2024.
According to the latest public data, within the scope of the consolidated statements, R&F's current total interest-bearing debts with overdue amounts reaching 10 million yuan amount to 47.1991 billion yuan. The sales cash flow is far from enough to cover the maturing liabilities.
This year, R&F is still selling assets continuously. In May, the equity of IGC Tianhui Plaza and Conrad Hotel was sold to Sun Hung Kai; the asset package of The Ritz-Carlton Chengdu and "R&F Center + Conrad + Hilton" in Dalian was packaged for transfer, but both auctions ended in failure consecutively.
The Guangzhou R&F Center, which is planned to be sold according to the latest rumors, is already one of the most core assets of R&F Group. R&F is used to holding office buildings, hotels and commercial properties. In its Guangzhou base, R&F is a well-deserved "landlord of numerous properties". In addition to R&F Center, it also holds core assets such as R&F Xintiandi Center, R&F Yinglong Square, R&F Yingkai Square, R&F Yingtong Building, R&F Yingtai Square and R&F Yingxin Building. However, the large capital precipitation and slow turnover of these properties are also one of the reasons why R&F fell into crisis.