AusLeisure

China’s ongoing property crisis has seen real estate giant the Evergrande Group cancel a contract to buy land rights for a new football stadium in the city of Guangzhou.

Evergrande, which will raise US$818 million as a result of the cancellation, had bid for the right to use land designated for sports facilities and industrial use in the Xie Village area of Guangzhou, ultimately entering into a contract with the Guangzhou Municipal Planning and Natural Resources Bureau in April 2020.

The debt-ridden firm had planned to develop a stadium with a capacity of at least 80,000 seats for Guangzhou FC of the Chinese Super League into which Evergrande had bought a controlling stake of in 2010.

With construction on the Guangzhou Evergrande Football Stadium having started two years ago, Evergrande had been due to make a total investment of CNY12 billion (US$1.7 billion) bn in the project,

With Evergrande intending toreturn the land use right, the group said it entered into the cancellation agreement with the transferee, Guangzhou Municipal Planning and Natural Resources Bureau, on Wednesday to terminate the original contract.

Evergrande was once renowned as a top property developer owning more than 1300 projects spread across 300 cities, while the company also builds theme parks and electric cars.

However, the company reportedly has more than US$300 billion worth of debt, and since Chinese authorities made it more difficult for real estate companies to borrow money last year, Evergrande has struggled to pay the interest payments on this debt.

The company reportedly owes money to 171 domestic banks and 121 other financial firms.

 In November last year it was reported that the Chinese Government has assumed control of the project.

Images: Concepts for the Guangzhou Stadium.

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