By WANG Tingting
State-owned property developer Overseas Chinese Town Enterprises Asia (OCT Asia) has sold 51 percent of Shanghai Bulgari Residences to gaming company Century Huatong for 612 million yuan (US$89 million).
OCT Asia is a HKEX-listed subsidiary of Shenzhen Overseas Chinese Town Co., Ltd. (OCT Corp).
Bulgari Residences went on sale in September last year. OCT Asia, like many of China’s biggest property developers, is under severe financial pressure. Last year, its revenue dropped for the first time since it went public in 2005. Income fell by a quarter to 77 billion yuan and OCT Asia reported a net loss of 11 billion yuan.
Bulgari Residences is not exactly the jewel in the property empire’s crown. In fact, it’s a massive liability. Over the past three years, OCT has lost more than 140 million yuan on the project.
Bulgari Residences Shanghai, inside the 40-story Bulgari Hotel, opened in 2017. The super-luxurious complex beside Suzhou Creek, an urban redevelopment project overseen by architects Foster+Partners, is compromised of 243 opulent apartments spread over 27 floors with access to all facilities of the Bulgari Hotel on the upper eight floors.
The minimum cost of “Bulgari’s iconic style in every detail” is 62,000 yuan a month – a mere US$9,000 – for the smallest apartment of 145 square meters. Occupancy in the first six months of 2022 was only 57 percent.
The buyer, on the other hand, is not doing much better.
Established in 2005, Zhejiang Century Huatong is a group of companies that specialize in internet games, along with the production and sales of automotive parts. A secondary supplier of auto parts, Century Huatong was mainly engaged in research and development when it transformed almost completely into a gaming company in 2014.
Since then, the firm has acquired Diandian Interactive, creators of Family Farm, and leading online game developer Shengqu with 2.2 billion registered users. Shenqu was the owner of over 70 games, including Legend of Mir2, The World of Legend and Final Fantasy XIV. These new assets made Century Huatong into the largest mainland-listed company focused solely on games.
The company is expecting to record a loss of as much as 8 billion yuan in 2022, more than the profits of the previous three years combined.
Century Huatong moved its headquarters to Shanghai from Neighboring Zhejiang Province on March 14. The group’s biggest shareholder is Tencent’s industrial investment fund.
