Was the 1,400 home Nine Elms Square site too big of a bite for Wanda?
Wang Jianlin’s Dalian Wanda has let a lock-out period expire on talks to acquire a second site in south-central London next to its One Nine Elms project, according to an account in the Estates Gazette.
The developer has been among mainland China’s most aggressive overseas investors in recent years, having taken on billion dollar deals on nearly half the world’s continents and across industries as varied as property development, sports marketing and movie production. Now Wanda has failed to reach agreement to purchase the 10.2 acre (4.13 hectare) Nine Elms Square project, after exclusive talks to acquire the residential site expired without a deal, according to the account in the UK property industry journal.
Wanda’s failure to reach agreement on the 1,821 unit project comes after the Beijing-based developer blamed government officials for the failure of its would-be $1.1 billion acquisition of Hollywood TV studio Dick Clark Productions earlier this year. Wanda already owns the One Nine Elms mixed-use project directly adjacent to Nine Elms Square, but has struggled to make progress on construction on that project, while slackening demand for homes in the neighborhood has led to a decline in prices in the area.
Two Mainland Developer Balk at London Mega-Project
Wang Jianlin decided to walk away from this London deal
Wanda let talks on the purchase of Nine Elms Square from the current owner, a joint venture between UK developers St. Modwen Properties and Vinci expire after Beijing’s Macrolink Properties had walked away from the project in March, according to the local media account. The two parties said that talks are ongoing, but that the current owners would begin to look for alternative buyers.
Wang called One Nine Elms a $1.1 billion project when Wanda acquired the site in 2013, having paid £88.8 million for the planned development. That combination residential and hotel property has had its own challenges, after two previous contractors walked away from the project. Construction is said to be ongoing now, after Wanda hired its third general contractor in January of this year.
Nine Elms and Wanda on the Slide
Wanda’s decision to pass on the project comes as both the developer and its favorite London neighborhood are facing challenges. Research by international property consultancy JLL shows that prices for new homes in south-central London, where Nine Elms is located, slid by 6.8 percent in 2016.
Meanwhile, overall sales for Wang’s empire dropped by 13.9 percent last year. Revenues from the company’s flagship commercial properties division led the way down, sinking by 25 percent to RMB 143 billion ($20.73 billion), according to a statement by the company.
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