(Bloomberg) -- Guangzhou R&F Properties Co. agreed to sell a 50%-held London property project at a loss, and proceeds will first be used to pay loans, the developer said in a statement to the Hong Kong stock exchange late Thursday.

Sunac China Holdings Ltd., China’s fourth-largest developer by sales in the first quarter, will be watched as grace periods end for a combined $105 million of coupons involving four dollar bonds. Once seen as a survivor of Beijing’s real estate sector clampdown, it has failed to meet initial deadlines for interest obligations.

The spread of Covid-19 could impede recovery in the nation’s housing market in May and June, Bloomberg Intelligence said. The country’s property sector is set to suffer another steep decline in contracted sales in April, BI said.

Key Developments:

  • China’s Guangdong Moves to Stabilize Housing Market, Economy
  • Sunac Faces Debt Deadlines While Pressure Eases on China Rivals
  • China Vanke 1Q Net Income 1.43B Yuan Vs. 1.29B Yuan Y/y
  • China Property’s 40% Sales Slump in April Could Extend on Covid

Guangdong to Stabilize Housing, Economy (7:47 a.m. HK)

The southern Chinese province vowed to ensure stable development of the property market and boost financial support for small companies hit by Covid, according to a notification Thursday. The local administration has called on banks to set reasonable down-payment ratios and mortgage rates for home buyers.

The local government also encouraged financial institutions to boost support for quality property projects and ensure timely deliveries. The province will push distressed developers to “actively conduct self-rescue and defuse risks.”

China Property Sales Slump Set to Continue (6:09 a.m. HK)

In a research report, BI said new home sales in 43 cities recorded an almost 40% slump in the first three weeks of April. Sales in larger cities are more prone to weakness on lockdown measures, analysts Kristy Hung and Lisa Zhou wrote.

Beijing’s mass testing of residents in most districts following a spike in Covid cases could bode ill for transactions in May, after Guangzhou’s new home sales volume slumped 71% in April on city-wide testing, while Shanghai’s tumbled 93% on lockdown measures, they wrote.

Guangzhou R&F Books Loss on Sale (5:45 a.m. HK)

The company is expected to record a loss of about HK$1.84 billion ($235 million) from the disposal of the London project. It’s agreed to sell the property to Cheung Chung Kiu, chairman of C C Land Holdings -- the project’s joint venture partner -- for HK$2.66 billion including loan. 

The project is currently known as “Thames City,” located south of Nine Elms Lane, London, with a total site area of about 449,000 square feet and a total salable floor area of about 1.7 million square feet. It is a mixed use development comprising 12 residential buildings, a park and other facilities.

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