R&F Properties continues to see its core assets placed on the auction block. According to JD Law Auction, the R&F Wanda Hotel, located in the urban area of Quanzhou, Fujian, will be auctioned off in its entirety on November 3, with a starting price of approximately 331 million yuan—about 30% below the market reference price of 473 million yuan. This 24-story building, spanning 183,400 square meters with a construction area of 47,800 square meters, has been a benchmark for high-end hotels in Quanzhou. However, it has now become a target for disposal amid the mounting debts faced by R&F Properties. Eight years ago, R&F Properties acquired 73 Wanda hotels for 18.955 billion yuan, enjoying a moment of glory. Yet, in the intervening years, the narrative has drastically changed. R&F Properties’ 2024 annual report shows that it now only has 22 hotel assets remaining. With recent auctions of Wanda hotels in Quanzhou and Langfang, R&F's hotel portfolio is poised to dip below 20.
Bai Wenxi, Vice Chairman of the China Enterprise Capital Alliance, stated that it is common for distressed property firms, such as R&F Properties, to dispose of core assets. While this approach allows for rapid capital recovery through auctions, it is merely a drop in the bucket compared to their massive debts. The primary value of these asset disposals lies in avoiding cross-defaults and maintaining public market credit, rather than providing a comprehensive solution to the debt crisis.
The 'century deal' that rocked the industry in 2017 saw R&F Properties acquire 73 Wanda hotels, elevating its luxury hotel holdings to 89 and establishing it as the largest luxury hotel owner globally. At that time, R&F’s Chairman Li Silian optimistically projected that these hotels would generate annual revenues of 7 billion yuan and 1.5 billion yuan in net profits, serving as stable profit engines for the company. However, what seemed like a flawless transaction has since become one of the company’s burdens.
Since 2022, R&F Properties has been adopting a 'sell hotels for survival' strategy. In June 2022, the Beijing Wanda Realm Hotel was sold for 550 million yuan, incurring a loss of 6.53 million yuan against its acquisition cost, marking the beginning of R&F’s hotel divestiture. In December of the same year, the Fuzhou Westin Hotel sold for 430 million yuan, down 30% from its appraised value. In 2024, R&F sold the London ONE project for GBP 1.6 billion, reflecting a 46% depreciation from its purchase price in 2017.
The auction wave continues into 2025. On September 9, the Changsha R&F Wanda Hotel was sold for approximately 513 million yuan; on September 23, the Langfang R&F Wanda Realm Hotel failed to sell at its first auction despite a starting price of 194 million yuan, 70% of its appraised value, due to a lack of bidders; and on October 23, the Ningde R&F Wanda Realm Hotel will undergo its second auction at a starting price of approximately 278 million yuan. As previously mentioned, the Quanzhou R&F Wanda Hotel is set for a complete auction on November 3.
The reasons behind these asset disposals, as stated in an announcement by R&F Properties in September 2024, include the failure to repay a $614 million offshore debt, leading to the takeover of 68 hotels and an office building by creditors, which significantly reduced their hotel count. By the end of 2024, R&F disclosed that it had 22 hotel assets remaining.
As R&F Properties loses hotel assets in regions like Changsha (already sold), Ningde (up for auction), and Quanzhou (up for auction), the number of its hotel holdings is about to drop below 20. Financial data raises questions about whether R&F Properties’ remaining assets can support its survival. In the first half of 2025, R&F’s revenue dropped 59.43% year-on-year to 5.765 billion yuan, with a net loss attributable to shareholders of 4.046 billion yuan. It held cash and cash equivalents (including restricted funds) amounting to 3.508 billion yuan, while its current liabilities surged to 248.1 billion yuan, of which 97.59 billion yuan is short-term debt due within a year.
Having entered the high-end hotel sector in 2004, R&F Properties has previously earned the title of “Best Owner in China’s Hotel Industry” six times, and it remains the largest owner of the Ritz-Carlton brand in the Asia-Pacific, with projects like the Guangzhou Park Hyatt and Beijing R&F Renaissance being industry benchmarks. Between 2011 and 2016, R&F’s hotel business accounted for over 55% of its investment property operating income. Even during the years of losses from 2018 to 2024, its hotel revenue still ranked among the top in the domestic real estate hotel sector.
From an industry perspective, R&F’s predicament is not an isolated case. Data from JLL shows that by the end of 2024, the total investment transaction amount for hotels in mainland China was 17.87 billion yuan, with 68% of sellers being developers. In the context of a sluggish real estate market and financing difficulties, 'selling hotels to recover costs' has become a common strategy for many distressed property firms. Furthermore, the high-end hotel market itself is facing challenges. According to STR, a global hotel data service provider, the Chinese hotel market is still in a slow recovery phase, with the overall RevPAR dropping 5% year-on-year in the first half of 2025, alongside declines in both occupancy rates and average daily rates.
Bai Wenxi believes that the asset 'sell-off' is just the beginning, predicting that the legal auction of commercial assets by distressed enterprises will unfold in three stages: 'supply surge—price bottoming—operational differentiation.' For institutions, the real opportunity will emerge at the end of the second phase, when the legal auction discounts become sufficiently deep, property rights policies are clarified, and operational teams are in place, allowing core-location distressed commercial assets to shift from 'hot potatoes' to 'valuable gold mines.'