Foreign Property News | Posted by Aye Myat Thu
Developer China Oceanwide Holdings has halted construction on a $1 billion mixed-use project in Los Angeles that was previously scheduled to be completed this year, according to an account in the Los Angeles Times, citing a statement by the Beijing-based developer.
The delay in work on Oceanwide Plaza, which is designed to include 504 homes, 184 hotel rooms and 153,000 square feet (14,214 square metres) of retail space, was said by the developer to be driven by a need to recapitalise the project, and raises doubts at a time when Chinese investors are selling off billions of dollars in overseas real estate assets.
China Oceanwide, which last week announced the sale of a pair of projects in Shanghai and Beijing for a combined $1.85 billion, has said that construction on Oceanwide Plaza should recommence in the middle of February. However, the project is one of several Los Angeles investments by Chinese developers that could be influenced by an ongoing corruption probe.
“In an effort to prioritize construction activity, and while we restructure capital for the project, interior construction at Oceanwide Plaza is temporarily on hold,” Oceanwide said in a statement cited by the LA Times.
The company went on to say that it had already invested $1 billion in equity into the development, and together with contractor Lendlease, would recommence construction in the middle of next month, after the company has upped its investment, with the project to be completed in 2020.
Under the terms of its sale of the Beijing and Shanghai projects to Sunac China announced last week, Oceanwide is set to receive the first two instalments of the $1.85 in proceeds from the disposal sale during February, a timeline which could coincide with it recapitalising Oceanwide Plaza.
Oceanwide had topped out the project in April of last year, and the company said at the time that the property would be completed in 2019. Sales of homes in Oceanwide Plaza’s residential component are also planned to start this year.
In a separate account, the Associated Press reported that executives at Lendlease had notified the Los Angeles Department of Building and Safety that work was stopping on Oceanwide Plaza, a three tower project that reaches as high as 55 storeys.
The delay in construction for Oceanwide Plaza was reported less than two weeks after news accounts revealed that Oceanwide had been linked to a corruption scandal involving Chinese developers and Los Angeles city officials.
China Oceanwide Holdings, along with Shanghai’s Greenland Group, Shenzhen Hazens, and Shenzhen New World Group were all named in a search warrant filed by the FBI and approved in US federal court last November, seeking access to email accounts belonging to Ray Chan, the former head of the Los Angeles Department of Building and Safety under Mayor Eric Garcetti.
Ref: Property Report
