Shimao's 23.9 billion land king may be reclaimed for 6.8 billion, and CITIC Trust's Shenzhen Longgang project may be discounted for redemption

On July 18, SHIMAO GROUP issued an open letter to all investors of the CITIC Trust · Shenzhen Longgang Financing Collective Fund Trust Plan, which included opinions on a compensation and distribution plan for a land reserve of 6.8 billion yuan in Shenzhen Longgang, along with three statements. According to exclusive information from Caixin, investors in the CITIC Longgang project can vote on the aforementioned plan starting from 9:00 AM on July 18, and a beneficiaries' meeting will be held at the end of the month. The core content of this land acquisition risk mitigation plan is that relevant departments in Shenzhen Longgang District will reclaim 12 plots of land won by SHIMAO GROUP in 2017, which were the core assets of the previously high-profile Shenzhen-Hong Kong International Center project, with a land acquisition cost of around 23.9 billion yuan; this recovery compensation pricing is equivalent to a 70% discount. SHIMAO GROUP had planned to build the tallest building in the country, exceeding 600 meters, on this land, but most of the project plans are currently stalled. According to reports, the aforementioned 12 plots of land are involved in two CITIC Trust projects, one of which is the CITIC Longgang project. This recovery pricing will affect the trust plan's payout funds. SHIMAO GROUP also indirectly released information in its statement: the project planning approval is not smooth, and the compensation in the aforementioned plan is insufficient with a long cycle. According to the CITIC Longgang project trust manager and a notice issued by CITIC Trust to investors on July 14 regarding the convening of the first beneficiaries' meeting in 2025, if the aforementioned plan is approved by vote, the project will advance a "discount payout" plan for investors based on this. Some investors received notifications that their cumulative payout ratio will be around 85% of the total principal, but the payout cycle will last until January 2027. According to a previous announcement from CITIC Trust, the voting by investors will continue until the end of July, coinciding with the beneficiaries' meeting. However, some investors told reporters that a communication outcome formed at the investors' meeting on July 17 was that if investors holding more than 10% of the trust shares can form a proposal to suspend this voting, the voting and advancement of this land acquisition risk mitigation plan can be halted