Rise and default

15 December 2020 By Pete Sweeney Follow @petesweeneypro

New York-listed Danke is the latest property middleman to implode, embarrassing Beijing in more ways than one. It’s a problem for President Xi Jinping’s affordable housing push, and yet another good business idea warped by price wars, financial engineering and vague regulation.

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An investment arm of Beijing's city government said on Dec. 3 it would not fund property rental firm Danke Apartment after Reuters reported earlier that it was holding talks with its cash-strapped parent, Phoenix Tree Holdings, citing sources.

New York-listed Phoenix Tree on June 3 reported a net loss of 1.2 billion yuan ($183 million) in the first three months of 2020. The company has not disclosed financial results beyond the first quarter.

From early November, some landlords, who said they had failed to receive rents from Danke in time, started to evict tenants Danke had placed in their units. Many of the tenants had borrowed from Tencent-backed WeBank to pay off the rents for 12 months.

WeBank said on Dec. 2 that it would waive interest payments and extend loans for clients affected by the dispute until the end of 2023.

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WeBank said on Dec. 2 that it would waive interest payments and extend loans for clients affected by the dispute until the end of 2023.

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