Landmark becomes idle: Gome's Nanjing flagship store drops to 156 million and fails to sell at auction

On the afternoon of March 22, at the intersection of Hongwu Road and Huaihai Road in Qinhuai District, Nanjing, the springtime Xinjiekou commercial area was bustling with people. However, at No. 137 Hongwu Road (commonly known as Nanjing Gome Electric Building), adjacent to the south extension of the pedestrian street, the door was tightly closed, the glass curtain wall covered in thick dust, and the sign at the entrance had been removed long ago. The “GOME” sign on the facade still stood out, but the logo was now faded and mottled.

This building was once a landmark of Nanjing’s commercial scene and the first Gome store in Nanjing. Now, it has repeatedly failed to sell at judicial auctions. On March 18, the property was auctioned again on Alibaba’s asset platform with a starting price of 156 million yuan. Before the auction, over 4,000 people watched, but no bids were placed during the entire process, and it was ultimately unsold.

On March 24, a reporter from Daily Economic News noticed that the auction listing had been removed from Alibaba’s platform. When asked about the property, the mortgage holder, Chongqing Rural Commercial Bank Co., Ltd. Shapingba Branch (hereafter Chongqing Rural Bank Shapingba Branch), said they would relist it for auction. “We have a new appraisal value and are preparing to raise the price before relisting. It’s still under internal approval,” they said. When asked how much the price might be increased, they replied that they could send an expression of interest for a quote.

Main entrance locked, store closed

The scope of the property includes floors 1 through 5 and the mezzanine, with a total construction area of 16,474.49 square meters. On March 22, the Daily Economic News reporter visited the site and saw that the large advertising screen on the facade was already black. Only a few street-facing shops on the first floor were still operating normally. The main entrance’s glass doors were tightly locked, and the entire retail area was completely sealed off. No staff were present at the entrance, and remnants of old “GOME” and other electronics brand stickers could still be seen on the door.

Looking inside through the glass display windows, the interior still retained the layout of a former appliance store, with shelves, escalators, and other fixtures still in place. The floor was littered with cardboard boxes, plastic bottles, and other debris. Some corners had unopened mobile phone boxes, and cabinets and ladders were casually placed aside. Broken stones and paper scraps were scattered on the ground.

A December 2023 asset valuation report shows that the building was completed in 1996, making it 30 years old. The land use rights will expire in September 2043, leaving less than 20 years of remaining land use.

Since its first listing for judicial auction in March 2024, the property has been repeatedly auctioned without success. The starting price has dropped from 267 million yuan in the first auction to 156 million yuan, a total reduction of over 110 million yuan, but no bidders have appeared.

The platform information shows that the latest auction started on March 18, with a starting price of 156 million yuan and a deposit of 16 million yuan. The court used a one-time bid auction rule, but the property was again unsold with zero registrations and zero bids.

This commercial asset in the core business district of Xinjiekou’s south extension has become a “stalled sale” in the auction market.

Asset shortcomings, who will take over?

The judicial disposal of Nanjing Gome Electric Building is directly linked to the debt troubles of the Gome group. Business registration information shows that the rights holder of the building is Nanjing Pengze Investment Co., Ltd. (hereafter Nanjing Pengze).

The company’s address is at No. 137 Hongwu Road. At the entrance, two intricately carved stone elephants stand on either side of the steps. The glass doors are fully locked, and a metal rolling shutter covers the interior. A row of “GOME” stickers is pasted on the door. On the left wall, a gold plaque reads “Nanjing Pengze Investment Co., Ltd.,” indicating this was once their office.

Through the corporate ownership structure, it is clear that Nanjing Pengze is 100% owned by Gome Electrical Appliances Co., Ltd., making it the core commercial asset entity of Gome’s operations in Nanjing. The auction of this property is part of Gome’s debt repayment process. Currently, Gome Electrical Appliances is entangled in numerous legal cases and has been listed as a dishonest person subject to enforcement.

From the notice posted on the building’s exterior wall, titled “(2023) Yu 87 Zhi 2039,” issued by the Chongqing Financial Court, the main creditor for this auction is Chongqing Rural Commercial Bank Shapingba Branch. In October 2023, the bank, along with Chongqing Gome Electrical Appliances Co., Ltd., and Nanjing Pengze, was involved in a loan dispute. The Chongqing court preserved and sealed the property as collateral before the case was filed.

According to an appraisal report by Chongqing Jinhai Asset Appraisal Co., Ltd., the market value of the building in December 2023 was estimated at 382 million yuan. This means the latest auction price was only about 40% of the initial valuation.

In addition to debt and tax costs, the asset’s operational shortcomings are also significant obstacles. The appraisal report notes that the interior layout is typical of a traditional appliance store, which is incompatible with the current commercial complex operation needs of Xinjiekou. Renovation and tenant recruitment costs will be necessary.

The report also mentions that the property has a self-owned garage and a few outdoor parking spaces, but the number of parking spots is limited, and parking convenience is poor. On-site, the parking garage appears old and unable to meet modern commercial needs. Coupled with the ongoing transformation of Xinjiekou’s retail landscape, with declining foot traffic and rising rents, revitalizing this aging commercial asset will require comprehensive renovation efforts.

On March 22, the reporter inquired with the property management center of Pacific (601099) Building, which manages the property, and was told that the property fees are paid on time. Due to long-term idleness, water and electricity costs are not involved.

According to China’s judicial auction rules, creditors can choose to settle debts with assets, and banks holding the property can activate it through self-management, leasing, or transfer agreements. They can also lower the starting bid and relist for auction or introduce third-party professional asset management firms to reduce operational risks.

On March 25, the reporter contacted the auction platform that previously listed the property. They stated that after last year’s failed auction, the property was transferred to the bank as debt settlement. They also revealed that some investors in Nanjing had offered higher than 156 million yuan, but the deal fell through due to various issues.

If the price is raised and relisted for auction in the future, who will acquire No. 137 Hongwu Road? In the context of accelerating physical retail upgrades, how to revitalize such high-quality but aging and complex commercial assets remains a pressing issue for Xinjiekou and other traditional commercial districts.

(Edited by: Zhang Yang HN080)

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