Wanda Commercial Properties IPO later this month could be the world’s largest property stock listing and the biggest market debut in Hong Kong this year, however, at least one of the company’s owners isn’t waiting for the stock to float before finding ways to spend his windfall.
An offshore firm belonging to Chinese billionaire Sun Xishuang is said by parties knowledegable regarding the transaction to be investing A$900 million ($743 million) to buy Australian theatre chain The Hoyts Group. Hoyts is Australia’s second largest theatre chain.
Wanda Commercial Properties is expected to list on the Hong Kong stock exchange on December 23rd and attracted enough buyers on the first day of order taking earlier this month to sell out the entire offering. The value of the IPO is expected to be in the neighborhood of $3.8 billion, with final pricing to be set on Dcember 16th.
With the movie theatre acquisition, Sun, who is the second largest individual shareholder in Wanda Commercial Properties, seems to be following the lead of his business partner, Wanda chairman Wang Jianlin, who acquired US theatre chain AMC for $2.6 billion in 2012.
Sun Xishuang the Latest China Property Baron to Invest Overseas
Sun, who also serves as chairman of his own real estate development company, Dalian Yifang, owns 6.3 percent in Wanda Commercial Properties, as well as 4.2 percent of Wanda Cinema, according to a report in the Want China Times. Wanda Cinema is set for its own RMB 2 billion ($326 million) IPO sometime later this month.
Even before the IPOs Sun is estimated by Forbes to have a personal net worth of $1.3 billion. The property tycoon is acquiring Hoyts Group from Aussie private equity firm Pacific Equity Partners, according to a report in Reuters.
Chinese Investment in Australia Continues to Expand
While Sun’s theatre buy bears a striking resemblance to Dalian Wanda’s deal for AMC, it is also part of growing Chinese investment wave in Australia.
On the same day that word leaked of the Hoyts sale a unit of state-owned infrastructure building firm China Communications Construction announced that it is buying Australian construction firm John Holland for A$953.1 million ($786 million).
Chinese property developers have also been particularly active down under both in buying mature assets and taking on development projects.
In November, two Chinese companies picked up major properties in downtown Sydney, with Sunshine Insurance buying the city’s Sheraton on the Park for A$463 million (US$401 million). Chinese real estate developer Shimao Property Holdings and its billionaire boss Hui Wing Mau also got involved by purchasing an office tower in the city for a reported A$390 million (US$339 million).
Dalian Wanda Group, the parent company of Wanda Commercial Properties, is also investing in Australia, having committed up to HK$12.5 billion ($1.57 billion) to opportunities there. In August the mainland property firm acquired a beachfront site in Surfer’s Paradise to develop a resort said to be worth $1 billion.
With China’s property market slowing down throughout 2014 and prospects for next year looking gloomy, it looks like the new year strategy of at least one more Chinese property investor is to take the money made in China and invest it in Australian markets in search of higher returns.