KKR, AEW eye deep discounts in China commercial property exit, Bloomberg reports

Private equity giants KKR & Co. and AEW Capital Management are seeking to offload their Chinese commercial real estate assets at steep discounts amid the mainland's ongoing  property slump, Bloomberg reported, citing people familiar with the matter.

The assets being marketed include prime projects, with KKR shopping around nine mainland properties such as a high-end residential complex in suburban Beijing and a Crystal Orange Hotel at Yu Garden near Shanghai's historic Bund.

Meanwhile, AEW plans to divest several office buildings in Beijing and the SPDB Tower in Shanghai's Lujiazui Financial City .

Both firms expect the proceeds from these potential sales will merely be enough to cover their outstanding bank loans, according to the report. 

This implies the current valuations of these commercial properties have plummeted by 40 to 50 percent from their original purchase prices.

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