Wanda’s Gold Coast Jewel Losing Lustre After Year of Slow Sales

China’s Dalian Wanda Group’s 512-apartment Jewel project on Australia’s Gold Coast may be losing its shine after the company revealed that only 25 percent of apartments in the luxury condo complex have sold since the joint venture with fellow Chinese developer Ridong Group launched sales a year ago.

The tepid results for the three tower, high-end condo project in the city of Surfer’s Paradise come as the conglomerate controlled by China’s richest man, Wang Jianlin, grapples with slowing revenues for its mainland operations.

Wanda Takes One Year to Sell 126 Aussie Condos

While nearly all of stage one in the Jewel have sold (126 apartments out of 130 put on the market), that total is only a fraction of the project’s 512 apartments. Shortly after the Jewel’s first stage sales numbers were published last week, the group launched the second stage of 102 apartments in the joint venture development. The Jewel is scheduled for completion in 2019.

The project’s slow sales can be traced to ambitious pricing, sources said — although Wanda Ridong claimed the pace is appropriate for high end luxury homes.

“Sales are in line with what we forecast, and we are currently finalising the details of stage two which will be released to market next week,” Jewel Sales and Marketing Director Lucas Wilson told the Australian Financial Review.

“Jewel is the first absolute beach-front development on the Gold Coast in 30 years. Such an iconic location demanded a development that was highly ambitious in its architecture and fittings.”

Trying for Double the Market Rate

Local agents and sources close to the project were not as confident that the market would bend itself to Wanda Ridong’s expectations. The apartments at Jewel, priced between $1 million to $5 million, are twice as expensive as surrounding apartments, they said.

The industry professionals also said there have been conflicts over the pricing of the apartments, with those with local expertise saying that Gold Coast, a tourist area, is not ready for such highly priced apartments, while Wanda and Ridong representatives remain adamant about maintaining a “standard of luxury.”

Sources also said the mainland developers prioritised having a landmark building to stamp their entry into Australian development over sales of housing.

Long one of China’s most aggressive cross-border investors, Wanda is also developing a luxury residential project on Sydney’s Circular Quay, and has several overseas developments in process in the US, Europe and other locations.

Boosted in part by its pre-sales of apartments in London and Chicago, as well as in Australia, the group’s overseas revenue climbed to RMB17.7 billion ($2.68 billion) in the January-June period this year, up more than 78 percent compared to the same period in 2015.

This offshore revenue will be badly needed as the company’s sales revenue from property sales in China declined to RMB 50.6 billion ($7.5 billion) in the January to June period — down 17.3 percent compared to the first six months of 2015.