KKR, AEW look to sell China properties at steep losses

KKR ↗ 0.63% and AEW Capital Management are seeking to sell commercial real estate holdings across China at prices that would barely cover their outstanding bank debt, marking the latest retreat by global investors from the country's prolonged property downturn, Bloomberg reported on Sunday.bloomberg+1

The Assets on the Block

KKR is marketing nine properties in mainland China, including an upscale multi-family apartment complex in suburban Beijing and a mid-market hotel along Shanghai's historic Bund waterfront, according to people familiar with the matter cited by Bloomberg. AEW, the Boston-based real estate arm of Natixis Investment Managers, is looking for buyers for the HeXa International Plaza office tower and the mixed-use Jing IN International Center in Beijing, as well as the Shanghai Pudong Development Bank building in the Lujiazui business district.theedgemalaysia+2

Both firms anticipate that proceeds from any sales would raise only enough to cover the bank loans used to acquire the properties, which represent between 50% and 60% of the original purchase prices, the people said. That implies equity invested above the loan amounts — roughly 40% to 50% of the original valuations — would be largely wiped out.theedgemarkets+1

A Broader Exodus

The planned disposals reflect a wider pullback by foreign capital from Chinese real estate. Global buyers invested close to $140 billion in office towers, warehouses, shopping malls, and data centers in China over the past 15 years, according to data from MSCI Real Capital Analytics. But many have shifted into selling mode as an economic slowdown and an unprecedented supply glut push rents and property values lower.theedgemalaysia

New-home prices across 70 major Chinese cities had fallen year-over-year for 31 consecutive months as of January 2026, according to Reuters, citing property research firm China Index Academy. The downturn has been especially painful for investors who entered near the 2019 peak, when estimated office asset values were at a historic high.reuters+1

KKR's Broader China Presence

Despite the property exit, KKR remains active in Chinese private equity, with more than a dozen investments including stakes in ByteDance, mushroom producer Jiangsu Yuguan, and private hospital operator Kareway Health. The firm last year launched its first yuan-denominated fund, raising capital from onshore investors including Ping An Capital. Representatives for KKR declined to comment on the property sales, while AEW did not respond to a request for comment.theedgemarkets+1