Wang Jianlin was so upset by One Nine Elms’ latest setback that a trip to Disneyland was the only thing that could cheer him up
When Dalian Wanda acquired the $1.1 billion One Nine Elms project from the UK’s Green Property in 2013, it was supposed to be a launchpad for Wang Jianlin’s international ambitions. Unfortunately the London luxury real estate complex has been more black hole than shooting star for Wang’s fast-growing conglomerate.
The latest setback came last week when Wanda One UK, the mall developer’s UK arm, and Balfour Beatty failed to agree to terms on the main build contract for the KPF-designed project. According to CoStar, the two firms were unable to reach an agreement on price.
“We can confirm that Balfour Beatty’s Pre-Construction Services Agreement with Wanda One for the main contract for the One Nine Elms development comes to a close in ten days’ time,” the pair revealed in a statement. “Wanda One and Balfour Beatty will not be proceeding to a full contract award for the development.”
Wanda tabbed Balfour Beatty in July to build what was suppose to be its first project outside of China after a joint venture between UK construction firm Interserve and state-owned builder China State Construction Engineering Corporation bailed on One Nine Elms at the start of the year.
Ping An Loan Not Enough To Kick Start Project
If the project does ever manage to get built, One Nine Elms would boast a 42- and a 58-storey tower that will contain more than 400 units as well as the first Wanda Vista hotel outside of China. When Balfour Beatty signed a preliminary agreement to build the landmark mixed-use development in July, it came at the same time Wanda secured a $659 million loan from Ping An Bank to help jump-start the stalled project.
The financing from one of China’s biggest financial groups was intended to see construction of the 200-metre tower through to its planned completion in 2019. However, Wang’s conglomerate was never able to finalize terms with the UK-based firm and must now find a third potential builder willing to take on the project.
Wanda No Longer The Only Developer In Nine Elms
Dalian Wanda is dealing with another setback at One Nine Elms after a second builder bailed
When Wanda purchased the site in 2013, it was seen as a fresh start for a London neighborhood that wasn’t exactly en vogue at the time. The area near Nine Elms includes the Battersea Power Station along with surrounding land. The Battersea project had already been a famous failure for the now defunct Treasury Holdings, and has frustrated a series of developers before Wang decided that the site was right for Wanda.
Three years later and it’s a whole new ballgame in Nine Elms. Wanda and its 18 competitors are currently building more than 20,000 homes in the former industrial area south of the Thames River, driving fears of a housing glut. UK property firm St. Modwen wrote down £21 million ($27.5 million), or ten percent on the value, on its 57-acre project in Nine Elms in July citing sluggish home sales in the area.
Meanwhile, figures from JLL showed that home sales in the area peaked in 2013 and have fallen each year since, even as developers have brought more projects on line.
Greenland Also Has Trouble With Builders Overseas
While Greenland Group’s £800 million ($996.9 million) The Spire project in London became the butt of everyone’s jokes for its questionable design, the mainland developer’s other London development, The Ram Quarter, has faced contractor struggles that closely resemble Wanda’s stumbles in One Nine Elms.
UK-based contractor Kier walked away from the Ram Quarter project after being unable to reach a price with Greenland. Sources told the Construction Enquirer that the mainland firm asked Kier to source as much of the project as possible from China including kitchens and bathrooms.
And it is not just London where Greenland chairman Zhang Yuliang has had issues with builders. In May, Greenland parted ways with Brookfield Multiplex after hiring the firm to construct the A$700 million ($501 million) Greenland Centre Sydney in Australia.
According to media reports, the Australian outfit found Greenland “difficult to deal with” and was also concerned about the feasibility of finishing the 235-metre tower on time after work had already fallen behind schedule.
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