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P2P lending companies collapse in Shanghai

Reporter: Chen Tong 丨 CCTV.com

04-23-2016 06:00 BJT

There's been an increasing number of peer-to-peer lending companies collapsing recently.  And China's office buildings are increasingly reluctant to lease space to them. Shanghai property agents say some landlords fear their rents will collapse when the companies do.

China has recently seen the collapse of an increasing number of P2P loan companies. Two Shanghai-based lenders, Wealthroll and Rower, are now being investigated by the police for illegal fund raising, and both have had angry investors gathering outside their offices. Even some solvent companies such as Kuailu have been having trouble paying back investors. It all has landlords worried.

"We have some examples ourselves of P2P companies that are no longer able to pay their investors. A lot of investors have come to ask for their money, and that ruins the image of an office block as well as giving the management trouble. A lot of landlords are now being cautious about background checks and and are limiting companies coming into their buildings," said Jushuang Sun, general manager of Centaline Property.

According to property service company Savills China, Beijing now has several hundred thousand square meters of empty office space due to the collapse of P2P companies since the beginning of the year. Sun says Shanghai's situation is not as bad as Beijing's, but it is not good.
"During the past two months -- March and April -- the P2P companies are not cancelling their leases, they are just going bankrupt. A lot of P2P companies have closed in a short time. Most of them rented a whole floor. The situation is not as severe as Beijing, but Shanghai is not looking optimistic," Jushuang Sun said.

 According to lending website Wangdaizhijia, as of the end of March the number of P2P companies had fallen by almost 60 in just the past month. The Banking Regulatory Commission is now so cautious about P2P companies that it has decided to postpone the release of further industry regulations until the industry stabilizes.

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