China’s largest commercial developer, Dalian Wanda Group, is planning to list a real estate business in Singapore, in a deal that could value a portfolio of properties at over $1 billion, according to a Wall Street Journal report.
The potential Singapore-listed entity would be structured as a real estate investment trust (REIT) and offer the Beijing-based developer a chance to once again list its real estate assets on a public exchange after a nearly three year hiatus.
Other media reports indicate that the company founded by tycoon Wang Jianlin has already hired two banks to explore the potential listing, news of which emerged less than two weeks after Wanda filed for a $500 million IPO of its sports marketing assets on the US’ NASDAQ exchange.
REIT Plan Still in Early Stages
Wanda’s plans for a Singapore listing are still in their initial stages, according to the WSJ report, which cites an unnamed source with knowledge of the IPO plans. The structure and size of the listing are still being formulated with Wanda also said to be in the process of deciding what assets could be part of the flotation.
The core of the group’s holdings is a portfolio of nearly 300 shopping malls which helped Wanda rank first among commercial real estate developers in mainland China in 2018 in terms of operating revenue. The group’s operating revenue from office leasing, retail operations and hotel management amounted to RMB 32.74 billion last year, according to real estate information provider CRIC.
During 2019 Wanda has been doubling down on its development of shopping malls and also making a show of launching cultural tourism projects in China’s second and third tier cities.
In May, the commercial developer marked touted a trio of tourism and real estate projects worth a combined RMB 100 billion ($14.46 billion), including an agreement for a new development in the Guangdong city of Chaozhou and similar mixed-use project in the Liaoning provincial capital of Shenyang. In Yan’an, Sha’anxi province, the company held a ground-breaking ceremony for a new tourism attraction glorifying the communist China’s long march, which Wang’s father had joined as a PLA soldier,
Wanda May Be Done Wandering the Desert
Wanda’s plan for a Singapore listing marks the potential end of Wang Jianlin’s own voyage of redemption, which has seen the billionaire who once ranked as China’s richest man suffer a number of commercial and regulatory setbacks since he convinced investors to join him in a $4.4 billion buyout of Dalian Wand Commercial Properties from the Hong Kong exchange in August 2016.
The company’s 2014 IPO on the Hong Kong exchange still ranks as the largest real estate debut ever on that bourse.
Wanda’s de-listing was predicated on Wang’s ability to secure a new and more lucrative listing on a mainland exchange, in a plan which ran afoul of changing regulatory conditions and Wanda’s own growing debt load.
In 2017, Wanda Commercial Properties applied for a listing on the Shanghai Stock Exchange, without ultimately receiving approval from mainland authorities.
The company, which once harboured ambitions of a global hotel, real estate and entertainment empire has been pushed to shed over $9 billion worth of assets over the past two years, after being targetted by government regulators in 2017 as one of the countries most over-leveraged large companies.
In September last year Wanda reportedly agreed to sell off its stakes in a pair of assets in the US which marked the last elements of what was once a $5 billion overseas real estate portfolio.
Dalian Wanda Commercial Management, as the company’s real estate division is currently known, first tested out a return to international capital markets in May when it raised $300 million through a sale of 363-day bonds with a coupon of 6.25 percent.