Dalian Wanda Group is walking away from its flagship property projects in Australia, in a deal that could exceed $1.5 billion, as the Chinese mall builder downsizes its overseas portfolio.
In an announcement last night, the group’s Hong Kong-listed unit said that a subsidiary of the company had struck an agreement to sell the rights and interests in “certain property projects in Australia” to a third party, which it did not identify.
The statement by Wanda Hotel Development says that an announcement about the disposal is being prepared. Although not identified in the statement, Wanda’s Aussie investments include Sydney’s One Circular Quay project and a resort on the Gold Coast, which the group picked up in 2014 and 2015, respectively.
The news follows reports last week that Wanda was close to reaching an agreement on the sale with a buyer of Chinese origin. According to one media account, Yuhu Group, the Chinese property developer headed by controversial political donor Huang Xiangmo, was understood to be in talks for the pair of projects.
The sell-off comes one week after the Beijing-based conglomerate headed by Wang Jianlin offloaded its flagship London project, One Nine Elms, less than four years after buying the site. The buyer was reported to be Guangzhou-based R&F Properties.
Wanda To Exit Australia 41 Months After Debut
Wanda dove into Australia in August 2014, scooping up a 55 percent stake in the Gold Coast resort project from China’s Ridong Group for A$300 million ($278 million) as part of plans to invest up to $1.57 billion in the land of koalas and kangaroos.
Dubbed Jewel, the integrated resort project is said to be worth A$900 ($726 million) and will yield 512 condo units upon completion. Wanda followed up its acquisition in January 2015 by purchasing a pair of sites near Sydney harbour with plans to build a $1 billion mixed-use complex, One Circular Quay, combining a five-star hotel, a luxury residential skyscraper and commercial space.
Through the Sydney deal, Wanda picked up the Gold Fields House office tower from Blackstone for A$415 million ($329 million) and the adjacent Fairfax House from a pair of Chinese-owned property firms for $A73 million ($57.8 million). Demolition work is underway for the landmark project, which Wanda says is worth A$1 billion ($807 million).
Wanda denied reports last August that it was in talks to sell the Australian assets, amid heightened scrutiny on its overseas deals by Chinese regulators. Later the same week, Wanda Hotel Development announced a provisional plan to transfer the projects to Wanda Commercial Properties, the group’s unlisted development unit, as part of a $1 billion global restructuring effort.
Chinese Developer Chaired by Infamous Donor Could Take Over
If Yuhu Group becomes the new owner of Wanda’s Australian projects, the move would represent a doubling-down on the mainland developer’s activities Down Under. The company, formed in south China’s Guangdong province, is engaged in a A$276 million plan to redevelop the Eastwood shopping centre in southwest Sydney.
Yuhu also bought up a 15-storey office block in North Sydney for A$59 million in 2015, and last year purchased the Bakehouse Quarter retail and commercial site in Sydney’s inner west for A$380 million.
The developer’s billionaire chairman Huang Xiangmo, who spent $12.8 million on a luxury mansion in Sydney in 2012, is reportedly linked to a scandal involving corrupt deals in Jieyang, which brought down the city’s top official in 2014.
The politically connected Chinese businessman has since been at the centre of a donations scandal that engulfed Australia’s Labour Party last year, prompting the resignation of Labour senator Sam Dastyari in December over his alleged connections to Huang.
The Australian immigrant first gained overseas notoriety in early 2016, when he was reported to have donated more than A$1 million through a network of associates to both of Australia’s major parties over a number of years.