Chinese developer Agile’s chairman Chen Zhuolin sells Hong Kong flat at 54% loss

The 1,239 sq ft three-bedroom flat in Hamburg Villa at 8-10 Eastbourne Road, Kowloon Tong, fetched HK$14.3 million (US$1.83 million), compared with HK$31 million in 2018 when the city’s property market was still soaring, according to Ronald Yue, a Centaline property agent, who closed the deal.

The price per square foot of HK$11,525 was about 15 per cent lower than the prevailing market rate, Yue said.

The property was acquired in 2018 by Joint Smart Development, whose director is Chen Zhuolin, the chairman of Agile, according to the Companies Registry.

Agile has acquired one-third of the 33 units in Hamburg Villa, Yue said, adding that the developer had expressed a desire to acquire the entire building. In 2018, Agile bought five flats in Hamburg Villa for HK$73 million.

Last year, Agile paid HK$966 million for the 44-unit Dragon Court at 6 Eastbourne Road, Beacon Hill, Kowloon Tong in a compulsory en-bloc sale for the redevelopment of the building next to Hamburg Villa.

With the developer suddenly selling a flat in Hamburg Villa at a steep loss, market observers are speculating Agile may suspend the acquisition of the remaining units in the building.

The sale came after the cash-trapped Guangzhou-based developer failed to pay interest on a US$483 million bond maturing in 2025 within the grace period in May. Agile said in a filing to the Hong Kong stock exchange that it “will not be able to fulfil all payment obligations under its offshore debts” in light of the liquidity pressure.

Meanwhile, individuals with links to Agile have borrowed against more than one Hong Kong property.

Luk Sin-fong, Agile’s former vice-chairwoman and wife of Chen, had taken a loan of an undisclosed amount by using her 39 South Bay Road multi-storey luxury residential building in Repulse Bay as collateral, a source said in February.

Luk had been shopping for a HK$500 million facility, the source said.

Agile also took out a two-year, HK$894 million loan in June 2022 at an interest rate of 20 per cent per annum as part of a plan to trim a debt load that amounted to 59.49 billion yuan (US$8.3 billion) at the time.

It was seeking to refinance its HK$894 million facility, for which residential projects on Mount Parker Road and King’s Road in the Quarry Bay area serve as collateral, the sources said.

Agile’s total borrowings, including bank loans, senior notes and mainland corporate bonds, had fallen to 53.55 billion yuan at the end of December 2023. The company reported a loss of 13.8 billion yuan in 2023.