Dalian Wanda confirmed today that the Chinese property developer has acquired a pair of properties near Sydney harbour, as part of a plan to build a $1 billion mixed-use complex in the Australian city.
The Beijing-based real estate company bought the Gold Fields House office block along the city’s Circular Quay from Blackstone for A$415 million ($329 million), as well as the adjacent Fairfax House. Wanda said it plans to merge the two sites to create an 85,000 square metre (914,935 square foot) development that will include a five-star hotel, apartments, and commercial space.
The acquisition is Wanda’s second major investment in Australia in the last six months and was announced just over one month after its $3.7 billion IPO became the biggest new listing on Hong Kong’s stock exchange in 2014.
Creating No.1 Sydney
Wanda Hotel Development, the company’s hotel subsidiary, and sister company Dalian Wanda Commercial Properties purchased Gold Fields House from Blackstone through a newly formed joint venture, Wanda One.
The JV also paid $A73 million ($57.8 million) to a pair of Chinese-owned property firms, AXF and Ever Bright, to buy the adjacent Fairfax house. Wanda said in its statement that it plans to merge the two sites to create a new 3602 square metre (38,771 square foot) property where it will create a new complex to be known as No.1 Sydney.
Planning approvals have already been secured to convert Gold Fields House into a residential development, which would enjoy views of Sydney’s Harbour Bridge and the Opera House. While the office tower is 90 percent occupied, all current leases have an escape clause for the landlord that becomes exercisable in 2017.
In a statement Wanda said that it expected to begin redevelopment of the property in 2017. The agreement between Blackstone and Wanda One is expected to close in March of this year, and both JLL and CBRE advised on the transaction.
Wanda On a Spending Streak
The Sydney project is Wanda’s second deal in Australia after the developer belonging to billionaire Wang Jianlin took over a resort site in Surfer’s Paradise in August.
Wanda is said to plan a $1 billion beach hotel at the location along the country’s Gold Coast, and said at the time that it was committing up to $1.57 billion to the Australian market.
Since its IPO last month the developer has been busy making headlines by spending €45 million ($52 million) to take a 20 percent stake in La Liga club Atletico Madrid last week, and at the end of December it spent an amount estimated at RMB 2 billion ($322.55 million) to acquire a Chinese online payment platform.
Where Will Sydney-Siders Work?
Wanda’s acquisition of the two vintage office towers are just the latest in a string of deals by Chinese developers hoping to convert downtown Sydney spaces from workplaces into residences.
In mid-November, mainland-born billionaire Hui Wing Mao, together with his Hong Kong-listed development firm Shimao Property, bought an office block at 175 Liverpool Street near Sydney Harbour for $324 million, with sources close to the deal saying that the developer planned to convert that building for residential use.
Just one week before Shimao’s transaction, Vision Investment Group, an Australian company owned by a mainland Chinese investors, acquired an office block at 233 Castlereagh Street in Sydney for $102 million. Vision Investment Group is also said to have plans to convert its property for residential use.
And, just in case Sydney residents have difficulty finding a place to work downtown, China top-three developer Poly Real Estate should be ready to help out after it acquired a suburban Sydney office park from Goodman Group for $89 million in December.