This article is from the Australian Property Journal archive
DALIAN Wanda, headed by Chinese billionaire and property tycoon Wang Jianlin, is believed to be close to an agreement to sell its $2 billion plus luxury projects in Sydney and on the Gold Coast, as the group reduces its offshore investments to only 7% of the total portfolio.
A Chinese interest is expected to become the new owner of the two assets, possibly within days, after months of speculation that a deal was close.
Following a crackdown by Beijing on offshore property investment, Wanda moved to sell off its $1 billion dual-tower One Circular Quay apartment and hotel project in Sydney and $1 billion Jewel development on the Gold Coast.
It appeared last year that the assets would be sold as part of a $5 billion package to a single buyer, also including the One Nine Elms luxury hotel and residential project on the River Thames in London, Chicago’s Vista Tower and One Beverly Hills in Los Angeles.
Wanda denied the $5 billion package was up for grabs. Wang Jianlin had acquired a 60% stake in the Australian projects in August through another of his companies, amidst the immediate fall-out of orders from the Chinese government and within days of refuting reports the group was seeking a purchaser for the pair.
The sale would conclude Wanda’s short lived relationship in Australia. The company made a big splash down under in August 2014, with an initial $290 million investment in the $1 billion Jewel project and in December, it snapped up Gold Fields House in Sydney from Blackstone for $425 million.
Wanda revealed on the weekend that the value of its assets in 2017 have topped RMB 700 billion (approximately AU$136.80 billion) with domestic assets comprising 93% of the portfolio and foreign assets only 7%.
Wanda’s portfolio is 11.5% lower than a year and in 2017 Wanda Group’s operating revenue reached RMB 227.37 billion, down 10.8% y/y, mainly due to the sale of assets.
According to a Hong Kong filing last week, the group’s hotel unit sold its interest in the London hotel project One Nine Elms, on the River Thames, last week. The buyer is believed to be major Chinese developer Guangzhou R&F Properties Co., with the price tag coming in at around £59 million.
Wanda backed away from a £470 million land deal at Nine Elms Square in August as it scrambled to reassess its capital allocations, which Guangzhou R&F Properties took on alongside C C Land Holdings. R&F had stepped in to enable Wanda’s sale of 77 hotels in July Sunac China Holdings, after pressure from banks concerned about credit risk.
Chinese companies were officially put on notice earlier last year over “irrational” spending overseas, with property and hotels put on a newly created restriction list.
“There are profound changes taking place in China and abroad that offer good opportunities for Chinese firms to undertake overseas investment but also carry many risks and challenges,” China’s State Council said.
China’s National Development and Reform Commission also said companies investing in overseas real estate could be harming the country’s financial stability.
Australian Property Journal
