HONG KONG, Nov 8 (Reuters) – Nearly 40 residential buildings in China Evergrande Group’s (3333.HK) mega resort project on Hainan Island seized by the local government will be completed for rental housing, serviced apartments and commercial activities.

In December, the Danzhou city government ordered the demolition of 39 towers in the Ocean Flower Island development, containing around 3,900 of the project’s 65,000 homes, due to environmental and construction violations.

Ocean Flower Island is the largest man-made resort island in the world and was developed by Evergrande for nearly $13 billion.

In April, local media reported that local authorities had changed the status of the towers to “confiscation” from “demolition”.

According to the latest project document, released by the city government in late October, authorities have approved the transformation of 16 of the unfinished buildings into rental housing, four into service apartments and the remaining 19 into hotels, offices and commercial spaces.

The seizure of part of the 800-hectare (2,000-acre) flower-shaped project has added to the woes of what was once China’s best-selling developer, which is reeling from more than $300 billion in debts and has trouble repaying its creditors.

Evergrande declined to comment.

Reporting by Clare Jim; Editing by Bradley Perrett

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