Fast-track demo ordered in China

On a timeline likely considered unwelcome by any demolition contractor, financially troubled Hong Kong-based property developer the Evergrande Group has reportedly been instructed by China’s government to tear down 39 apartment buildings within 10 days in the People’s Republic of China province of Hainan.

Australian news service ABC, in an early January report on its website, says China’s government has ordered Evergrande “to demolish 39 luxury apartment buildings on the tropical island of Hainan within 10 days.”

News of the mandated demolition quickly led to a suspension in trading of Evergrande’s stock on the Hong Kong stock exchange, according to ABC.

The online report indicates the targeted buildings are part of a complex called Ocean Flower Island, a collection of towers built on three islands created as reclaimed land. The buildings to be taken down were residential towers, part of the nation’s construction sector widely considered to be significantly overbuilt. At one time, Evergrande had valued the residential towers at $1.7 billion, according to ABC.

Coverage from both ABC and the Hong Kong-based South China Morning Post newspaper indicates the government has accused Evergrande of illegally obtaining permits to construct the 39 buildings, with those permits now having been revoked.

Evergrande’s perceived inability to meet its debt obligations, including a series of bond payments, has been an unfolding story for the past year. There are “more deadlines in January for both overseas and domestic coupons” looming, according to ABC.