Dalian Wanda Commercial Properties, the real estate developer controlled by Asia’s richest man, has repeatedly surprised markets with its willingness to take on billion dollar investments across multiple continents since its December IPO.
Now Wang Jianlin’s Hong Kong-listed firm has more news for investors, after announcing on Friday that it will launch a mainland-based share sale valued at more than RMB 12 billion ($1.9 billion).
The offering is being undertaken to help fund the expansion of Wang’s mainland commercial property empire, and comes despite Chinese stock indices having lost nearly 30 percent of their value in the last 30 days, and in the face of record amounts of new shopping malls being constructed in China.
Wang Continues Expansion Binge
The share sale may have originally have been targetted at catching the surge in share values on the mainland – where the Shanghai composite index rose more than 150 percent from mid-June 2014 until the middle of last month, but it is also aimed at fuelling Wang’s rapid expansion of his mainland property holdings.
According to the company’s announcement to the Hong Kong stock exchange, Wanda Commercial intends to use the proceeds of its offering to fund RMB 1.2 billion in new malls in locations including Nanjing, Chengdu, Jinan (in Shandong province), Hefei (in Anhui) and Xuzhou (in Jiangsu).
Many analysts have singled out Chengdu as one of China’s most oversupplied cities in terms of shopping centres, as developers on the mainland are continuing to build an estimated 60 percent of the world’s pipeline of malls under construction.
The five projects listed on Wanda’s share sale announcement are just a thumbnail of Wang’s planned expansion. In April the former military man announced that Wanda would add 900 more malls to its portfolio over the next decade, and in May Wanda announced plans to spend RMB150 billion on 28 new malls and a resort in Chongqing.
Wang and Wanda have also been actively pursuing high profile ventures globally, including taking a stake in Spanish football club Atletico Madrid and buying the family sports marketing firm of now-disgraced FIFA head Sepp Blatter.
Also on Friday, Wanda announced that it would invest RMB 3.58 billion to acquire an undisclosed stake in online ticketing firm LY.com, to support its plans for a mainland theme park empire.
Wanda Gets Creative About Fund-Raising
Wanda’s bold expansion plans appear to be matched by its fund-raising strategy.
Wanda Commercial’s $3.7 billion December IPO already was the biggest new listing of 2014 in Hong Kong and the largest ever for a real estate company globally. However, the company’s cash appetite appears to still be far from sated.
In June Wanda went online to raise $800 million from both retail and institutional investors on the mainland through its own crowdfunding platform, and the Wang’s movie theatre chain, Wanda Cinema Line also raised RMB1.26 billion ($203 million) through a mainland IPO in January.
The mainland share sale remains in the early stages with the company indicating that it will happen within the next 12 months. Following the sale, 47.3 percent of Wanda Commercial’s stock will have been floated publicly.