(Source: South China Morning Post)
An iconic Beijing office tower in the shape of a dragon’s head has been sold for a discount during an online auction, as bankers and creditors succeeded on their third attempt to dispose of the asset to recover some of the 3 billion yuan (US$425 million) owed by billionaire fugitive Guo Wengui. Pangu Plaza Tower 5, which houses IBM China’s office, was sold for 5.187 billion yuan during a 24-hour auction on Taobao, the country’s largest e-commerce platform.
The building, seized from Guo in 2014 after he fled China for the United States to escape a corruption investigation, was put on the auction block for a starting bid of 5.182 billion yuan and valued by Taobao at 7.92 billion yuan, about half the average price of comparable Grade A office blocks in the neighbourhood.
According to Taobao, the buyer is Beijing YuCheng Zhiye, a Beijing-based property development and management company. The sale of Tower 5 is a coup for Bank of Shanghai, which is leading a group of creditors seeking to recover the debt owed by Guo, who remains at large in the US even with an Interpol red notice out for his arrest.
Bank of Shanghai had tried at least twice to sell the tower. An August 2018 auction of 49 residential units and 19 offices valued at a combined 8 billion yuan failed to find any buyer, while a second auction, with a 20% discount across the entire portfolio, was scrapped in February for lack of interest. Proceeds from the auction will go toward repaying more than 3 billion yuan of debt owed to the Bank of Shanghai and a Shanghai investor.
The auction on Taobao was a highly anticipated affair, with 144,403 people registering to follow the proceedings. Yet only two people put down the minimum 1 billion yuan deposit required to take part in bidding. The two bidders made their offers in the last 20 minutes before the 24-hour auction closed. The winning bid was only 5 million yuan higher than the reserve price.
The Pangu project, designed by Taiwanese architect CY Lee, is located next to the Bird’s Nest Olympic Stadium in Beijing, and consists of four office buildings, with a uniquely shaped taller fifth structure as the dragon’s head. Plaza 5 – the dragon’s head, which can be glimpsed in one of 2014’s blockbuster movies, Transformers: Age of Extinction – is where the Pangu Seven Star hotel sits and faces south, with the four office towers to its north making up the dragon’s body. It was previously known as the Morgan Centre, developed by Beijing Capital Land. The project was taken over by Guo after Beijing Capital’s former chairman Liu Xiaoguang was befallen by a sex scandal.