Located at the intersection of The Bund Financial District and the City God Temple Commercial Area in Shanghai, the Yu Garden Wanda Reign Hotel was recently listed on the Alibaba Auction·Judicial Platform with a starting price of 1.006 billion yuan, equivalent to about 35,500 yuan per square meter. Bidding will commence in early September, with the deadline set for September 25th. The news of this auction quickly stirred discussions in the hotel investment circle and real estate market.
According to disclosure on the Alibaba Auction Platform, this property is under court-led mandatory disposal. Several industry insiders pointed out that this is not a complete liquidation of the enterprise but the result of debt disputes entering judicial proceedings. A hotel consultant working in Shanghai told a reporter on August 28th, “In simple terms, it’s a debt issue. The hotel itself is still operating, but if the debt is not resolved, it would lead to an auction like this.”
A lawyer surnamed Dong in Shanghai explained that judicial auction is a court’s enforcement measure, usually seen in cases where debtors fail to repay, collateral breaches, or in the handling of property related to criminal cases. “It is different from liquidation auctions. Liquidation means the entire company entering bankruptcy liquidation, where a liquidator disposes of all assets. Judicial auction only executes a specific asset,” he added.
The Yu Garden Wanda Reign Hotel has been in operation since 2007, operating for nearly 18 years, with around 340 guest rooms, a banquet hall, executive lounges, two restaurants, and a rooftop infinity pool. Public information indicates that the standard room prices are above 1,000 yuan on weekdays. Industry estimates suggest an annual revenue of over 100 million yuan, with a pre-tax operating profit of about 50 million yuan. Based on the starting price, each guest room is valued at around 2.96 million yuan.
Mr. Chen, a hotel asset consultant in Shanghai, mentioned, “Before 2019, their business (Yu Garden Wanda Reign Hotel) was doing quite well, receiving good demand for banquets and foreign guests. However, after the pandemic, the situation took a sharp downturn as business demand decreased and tourism dwindled. Regardless of the prime location, no customers pose a problem.”
This year, there have been several hotel auction cases in various parts of China. The Chengdu Hilton International Hotel was finally sold for around 500 million yuan after multiple rounds of auctions in February 2025; Shaoxing Keqiao Flourishing Hilton Hotel, Wenzhou Wanhe Shangri-La Hotel, and Urumqi Yinxing Grand Hotel were also listed for judicial auction in February 2025; The International Gui Du Hotel in Shanghai officially closed for renovation starting on February 28th. These cases highlight the industry’s overall pressure.
Mr. Jiang, a hotel investor from Hong Kong, analyzed, “The price of 35,500 yuan per square meter seems reasonable in Shanghai’s core area, but the hotel has been operating for over a decade and needs significant refurbishment of at least 150-200 million yuan. Excluding interest costs, the return period would be extended.” He added, “If no one bids in the first round and the price drops to around 800 million yuan in the second auction, then there might be actual buyers.”
Macroeconomic data in mainland China also reflects a sluggish market. According to the official website of China’s Ministry of Commerce on June 20th, the actual use of foreign capital in the country from January to May 2025 was 358.19 billion yuan, a year-on-year decrease of 13.2%; by July, the cumulative decline expanded to 13.4%. At the same time, data from the State Administration of Foreign Exchange estimated that China had a net outflow of 168.4 billion US dollars in foreign direct investment in 2024, a record-high, with only 4.5 billion US dollars flowing in. Not only is there less funding, but foreign service agencies are also contracting. Many U.S. law firms, including Milbank, Sidley Austin, and Weil Gotshal, have closed their offices in Shanghai and Beijing since 2024, as reported by international media last year.
Industry insiders generally believe that the auction result of the Yu Garden Wanda Reign Hotel will serve as a significant signal for observing high-end hotel assets in China’s first-tier cities. Whether there will be bidders, and ultimately a successful transaction, will be seen as an indicator of the capital market’s attitude towards this sector. Many individuals in Shanghai believe that the city is no longer the bustling metropolis it was during the reform and opening-up period, with its business environment reflecting the current economic decline in China.