Shanghai’s Temple Square mall sells below valuation in auction amid debt crisis

China’s commercial property market set another marker after a bankrupt state-linked developer sold Temple Square, an abandoned shopping complex in Shanghai once owned by US fund manager CarVal Investors, below its market value through a public auction.

An undisclosed buyer paid 1.2 billion yuan (U$164.6 million) for the property measuring 36,100 square metres (388,577 sq ft) near the City God’s Temple, according to the results published on sf.taobao.com on Friday. The asset, valued at 2 billion yuan, has associated debt of 2.8 billion yuan, according to local media reports

The bankruptcy administrator of Shanghai Chenghuangmiao Plaza Real Estate first tried to sell the property in October 2023 with a reserve price of 1.9 billion yuan, without success. It reduced the asking price to 1.4 billion yuan in January last year, before sealing the sale in its third attempt as part of a restructuring process.

Located in Shanghai’s tourist hotspot close to the Yu Garden in the Old City of Huangpu district, the Temple Square is surrounded by several major commercial plazas, pedestrian streets and shopping malls including the Bund Finance Centre. It has been closed since the owner fell into a debt crisis.

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“It’s truly a shame that a project like this is being sold,” said Yan Yuejin, vice-president of Shanghai-based E-House China Real Estate Research Institute. “It reflects poor management” while weak consumer spending also contributed to its failure, he added.