Posted Mar 31, 2022, 4:55 AM
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Registered User
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Join Date: Feb 2002
Posts: 6,710
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Quote:
Originally Posted by nmkef
Per the actual Oceanwide filing.
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I thought these were the sections most relevant to their proj on Fig St....
Quote:
In addition, the related interests and expenses have not been capitalized due to the fact that the work of the Los Angeles Project (the “LA Project”) and other projects have not yet been resumed, resulting a significant loss suffered by the Group during the Year.
The impairments in the real estate development segment were due to the following factors: (1) the LA Project has been suspended in October 2020 due to its funding issues. It was originally planned to restart constructions during the first half of 2021, but the relevant work progress did not match the expected schedule, thus the cash collection cycle in relation to the project has been extended (the project was originally expected to be completed by 2023 in 2020 and was delayed to be completed in 2025), resulting in a decrease in the discounted present value of the project’ s cashflow forecast model, thereby incurring an impairment of US$177.5 million
As at 31 December 2021, the Group has a total of five real estate development projects as follows: LA Project The real estate development project in Los Angeles, the U.S. of the Group is located in the core of Los Angeles, near landmark buildings such as Crypto.com Arena (formerly known as Staples Center) (home to the Lakers and the Clippers), Microsoft Theater, Los Angeles Convention Center and The Ritz Carlton.
With considerable flow of people and customers, it is an excellent site for the development of a commercial complex. The project covers a total land area of approximately 18,662 square meters (“sqm”) with a gross floor area of approximately 138,249 sqm. It is planned to be developed into a large scale mixed use urban commercial complex with three upscale condominiums, a luxury five-star hotel under the “Park Hyatt” brand, which is the topnotch hotel brand under the Hyatt Group, a shopping mall with a gross floor area of approximately 15,476 sqm, and the largest LED signage panel on the west coast of the U.S..
The construction of the project commenced in the second half of 2014. In 2018, construction works of the project for all main structures and curtain wall installation works for the main structures were completed. Over 85% of electrical and mechanical work was completed so far; and over 60% of interior drywalls in buildings 2 and 3 were installed. However, the construction of such project has been suspended since October 2020 due to the significant impact of global pandemic, changes in macro-economic environment in 2020 as well as the arbitration between the Group and the main construction contractor who decided to terminate the construction contract.
As the Company has liquidity issues, the construction of LA Project has still remained suspended to date. The Group is now actively negotiating with potential investors on project financing or joint development plans, with goals to resume construction, to complete financing for the project and to pay off all current debts to the creditors for the project. According to the development plan, the project will take around two years of development from restart to completion.
Part of the completed apartment blocks will be for sale while the LED advertisement panel, shopping mall and hotel will be for rent so as to earn recurring rental income. The LA Project was originally scheduled to resume construction in the first half of 2021.
However, the work progress did not reach the expected schedule due to funding issues. Thus the project’s cash collection cycle has been extended (the project was originally expected to be completed by 2023 in 2020 and was delayed to be completed in 2025), resulting in a decrease in the discounted present value of the project’s cashflow forecast model, thereby incurring an impairment of U S$177.5 million (2020: HK$280.5 million), and the provision was made and recorded in the income statement accordingly.
As at 31 December 2021, total funds invested in the project were approximately US$1,190.5 million.
As the Group has designated the LA Project as its core development project, majority of the capital resources has been used in such project. Other projects such as New York Project and Hawaii Projects were initially planned to be developed at a later stage or when there is sufficient capital. As the detailed design has not been finalized, there is no estimated construction time nor completion date.
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^ the proj's retail, even in the best of times, would be increasingly iffy. Brick and mortar may do well in a Grove or americana type lifestyle center. Or disneyland or samo 2nd St type setting. But the Oceanwide proj doesn't appear to be like that....it appears to be more of a conventional shopping mall.
Warning, warning! Caution!!
Same thing with the Grand Ave proj across from Disney Hall.
The economy is entering a brave new world.
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