Nestlé Tower’s fate could lie with Hong Kong liquidation case

CROYDON IN CRISIS: A case brought in the Hong Kong High Court this week could end any hope of the resumption of works on a £500m town centre development. By STEVEN DOWNES

Money pit: China’s Evergrande’s $300bn debts make it the world’s most indebted company

The property speculation and development blight that has led to the drastic decline of the town centre since the turn of the century could be about to get a good deal worse, with the fate of one of Croydon’s “iconic” tower blocks potentially resting on the outcome of a winding up order for the world’s most indebted company in a Hong Kong court.

There has been no construction work carried out on the Nestlé Tower since early 2020, as contractors downed tools for the covid lockdown, never to return. The property’s owners, R&F Properties, were among several large Chinese developers squeezed by a Beijing government covid credit crunch.

R&F had acquired the Nestlé Tower, St George’s Walk beneath it and the neighbouring Grade II-listed Segas House for £60million in March 2017.

Then, the office block – formally known as St George’s House, and one of Croydon’s first 1960s skyscrapers – had already been sitting vacant for five years, ever since Nestlé stomped out of their home for 50 years after a row with the Tory-controlled council over planning.

Work began in 2019 on R&F’s ambitious £500million Queen’s Square, with the repurposing of the 22-storey Tower office block into 288 private flats.

Development blight: the shutters came down on R&F’s Queen’s Square ‘marketing suite’ three years ago. They’ve never reopened

But the covid shockwaves hit what had previously been the rapidly expanding Chinese property sector harder than most, leaving many property companies, including R&F, burdened with massive debt.

“China’s property sector accounts for about a quarter of the activity in the world’s second-largest economy,” news agency Reuters reported today.

“Its woes have rattled global markets and prompted a slew of measures by Beijing to reassure investors and homeowners.”

In July this year, a court case was brought against R&F over its unpaid debts. R&F has debts of £32.24billion, although their assets – mostly property and development sites, including Croydon – exceeds that amount.

The latest pinch-point is a court action brought against Evergrande, which at the end of June listed total assets of $240billion. But by late 2021, Evergrande’s borrowing had topped $300billion, making it the world’s most indebted developer.

Pretty vacant: Nestlé Tower, one of Croydon’s best-known buildings – it features in current ITV telly ‘idents’ every night – has been empty for 11 years

The fear is that, if Evergrande goes, then other Chinese property firms may follow. The company’s liquidation, according to the global news agency Reuters, “would send further shockwaves through already fragile capital markets”.

The Hong Kong High Court sat yesterday and agreed a five-week adjournment to give Evergrande a further opportunity to cobble together some sort of deal which would allow it to settle its massive debts. Justice Linda Chan said the next hearing would be the last before a decision is made on liquidating the company.

“The company has been given a very clear message by the court that this is the last chance to propose a viable restructuring plan that is acceptable to the creditors,” according to a senior representative of one of the companies looking to get their money back from Evergrande.

Reuters described Evergrande as “the poster child of a debt crisis that has since engulfed China’s property sector”. The firm’s billionaire founder, Hui Ka Yan, has been subject of an investigation for suspected criminal activities.

And Evergrande’s options have been severely limited because of restrictions placed on the sector by the China Securities Regulatory Commission.

“The wider real estate sector has also been shaken this month by a default by the developer Country Garden, adding to dozens of missed payments by its peers,” the Financial Times reported at the weekend. As well as Evergrande’s liquidation order, another Chinese development dragon, Logan, is also facing a possible winding up in the Hong Kong court this week.

“The prospect of an Evergrande liquidation, with its hundreds of projects across the mainland, gives added urgency to Beijing’s effort to address the problems of the country’s paralysed real estate sector,” according to the FT.

And with it lies the fate of one of Croydon’s most famous buildings.

Read more: Courtroom moves in China to wind-up owners of Nestlé Tower
Read more: Hong Kong finance crisis could hit £500m Nestlé Tower scheme


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About insidecroydon

News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email
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4 Responses to Nestlé Tower’s fate could lie with Hong Kong liquidation case

  1. Brilliant work IC! But also depressing ….

    • Meanwhile, Part-time Perry, the guttering salesman, is telling anyone gullible enough to believe him that he will get R&F to resume works…

      • Fair point, but, you know, Perry and everyone at the Town Hall don’t seem to realise that Croydon is not at the centre of the universe. We don’t even figure as an amoeba in the world of global finance.

  2. derekthrower says:

    This companies assets apparently exceed it’s liabilities, but the example of Trump and one of his numerous legal proceedings is about the inflating of property valuation to increase leverage. These property speculators are facing liquidation because everyone knows they can’t realise their asset values anytime in any near future. The kicking of cans down the road always come to an end eventually.

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