BlackRock is done? Selling the last office building in Shanghai at a 30% discount, preparing to fully exit the Chinese real estate market.

The world's largest asset management company BlackRock ( is selling its last commercial property in Shanghai at two-thirds of the bid price, symbolizing its preparation to fully exit the real estate market in China. Sources reveal that this American company is selling a 27-story office building located on Changshou Road in the Putuo District of Shanghai for approximately $124 million. The estimated selling price is significantly lower, by 34%, than the price BlackRock paid in 2017 when it made the acquisition from Hong Kong Shanghai Alliance Holdings ).

Earlier, BlackRock was seized for defaulting on a loan of 780 million yuan, resulting in the confiscation of two office buildings located in the Shanghai Riverside Plaza commercial area. They are currently being sold to the distressed asset management company DCL Investments for 700 million yuan. According to Bloomberg, this selling price is more than 40% cheaper than the acquisition price in 2018. What does it mean for BlackRock to sell off prime commercial properties in China at such a low price?

Foreign companies are gradually withdrawing from the Chinese real estate market.

The Chinese real estate market continues to be sluggish, and BlackRock is not the only asset management company looking to exit China. MSCI data from 2014 shows that foreign investment institutions have been the largest net sellers in the Chinese real estate market for four consecutive years (Net Seller), selling more than they invested, marking the lowest level in recent years.

Cushman & Wakefield ( data shows that BlackRock has reached an acquisition valued at $23 billion with Li Ka-shing's Hong Kong Cheung Kong Holdings Limited for global port assets of the Panama Canal. Over the past five years, the company has not engaged in any actual asset transactions in China. The head of Northern China at Savills stated that between 2017 and 2018, foreign investment in Chinese commercial real estate, particularly office buildings, was quite vigorous. These assets are currently severely affected by declining rents and a significant drop in occupancy rates, leading to an overall decrease in asset value and poor market performance. Many owners are eager to sell due to various factors such as limited investment horizons and rising refinancing costs.

The Implications of BlackRock's Withdrawal from China

BlackRock sold its business office building in Shanghai at a discount well below the purchase price, and foreign capital withdrew as a net seller, confirming the weakness of the real estate market. BlackRock's withdrawal is not an isolated case, other foreign asset management companies have taken similar actions, foreign investment strategies in China's real estate market have undergone a drastic change, they are looking for more stable investment opportunities, coupled with geopolitical risks and uncertainty about China's future economy, foreign capital has accelerated its withdrawal, and China's real estate boom will not return in a short time.

Is BlackRock pulling out? Selling the last commercial office in Shanghai at a 30% discount, preparing to fully exit the Chinese real estate market. First appeared in Chain News ABMedia.