Dalian Wanda Group continues to scale back its overseas empire, selling its flagship billion-dollar London project for £59 million ($81.5 million) just under four years after buying the site in south London’s Vauxhall area for £88.8 million.
Two units of the flailing conglomerate chaired by Wang Jianlin are offloading a combined 100 percent interest in a company that owns the still unstarted One Nine Elms project on the south bank of the London’s River Thames, according to a statement.
The buyer, although officially undisclosed, is reported to be Guangzhou’s R&F Properties, which last August purchased the adjacent Nine Elms Square site from Wanda in partnership with Chongqing-based CC Land. The move comes two months after Beijing-based Wanda was said to be putting its $5 billion overseas property portfolio up for sale.
Wanda Steps Back from Troubled London Site
Wanda paid £88.8 million (then approximately $142 million or RMB 858 million) for the One Nine Elms plot in 2013, announcing that the completed mega-project would be worth £700 million ($1.1 billion). The mixed-use development was slated to include 103,000 square metres of residential, office and retail space within a pair of 45 and 60 storey towers. The complex would also provide a five-star hotel, along with 436 private homes.
Since acquiring the project from the UK’s Green Property, the mainland mall builder with interests in everything from cinema chains to yachts has faced an uphill battle to get the complex off the ground. The site has apparently been cleared, but little progress has been made on the landmark project, which is already on its third contractor after the first two builders walked away.
R&F Rescues Wanda Again
Through the just-announced deal, Hong Kong-listed Wanda Hotel Development Co Ltd will dispose of a 60 percent stake in the project, while the group’s unlisted core subsidiary, Wanda Commercial Properties, will shed its 40 percent stake. The buyer will also repay £159.5 million in debt, according to the filing.
R&F Properties, which sources told Bloomberg is Wanda’s partner in the deal, rode to Wang’s rescue last July by scooping up a portfolio of 77 Wanda hotels for RMB 19.9 billion ($2.9 billion). The following month, Wanda flipped the £470 million Nine Elms Square site in London to R&F and CC Land immediately after buying the 1,821-unit residential project from a British-French joint venture.
Another Overseas Dream Bites the Dust
Wanda has been stumbling elsewhere, amid pressure from Chinese regulators to reduce debt after an offshore buying binge. The acquisitive company’s Hollywood dreams took a body blow last October when its US partner, Athens Group, bailed out on the One Beverly Hills luxury condo-and-hotel complex, just before apartment sales were set to begin.
Not all acquisitive Chinese developers are stepping back from their offshore investments, however. This week, the US subsidiary of state-owned Greenland Holdings revealed that it was upping its stake in a portion of Pacific Park Brooklyn, a $5 billion New York City mega-project, from 70 to 95 percent.