Dalian Wanda, a Hong Kong-listed developer and one of four firms active in real estate under pressure from the Chinese authorities over major overseas investments, has walked away from its planned €532 mln acquisition of Nine Elms Square development site in southwest London.
Instead, the prime 4-hectare development site with permission for 1,900 apartments has been purchased by R&F Properties and CC Land Holdings, two other Chinese property groups listed in Hong Kong.
UK-based regeneration specialist St Modwen Properties announced in June that its joint venture with Vinci was selling Nine Elms Square to Wanda Commercial Properties.
St Modwen issued a follow-up statement on Monday 21 August to say a transaction had completed, finalising the JV's divestment of its New Covent Garden Market regeneration project. The name of the buyer was not included in the press release.
Wanda revealed on Tuesday that it had not followed through on the acquisition. No reason was given for the decision.
A short time later R&F and CC Land announced they were the buyers of the site. Both companies are mainly focused on real estate in China, though they have been expanding in London recently.
CC Land completed the acquisition of the 224 metre-high Leadenhall Building, aka the Cheesegrater, for €1.4 bn in May.
R&F Properties, which is based in Guangzhou in Southern China, has completed two residential-led investments in London this year.
Dalian Wanda
Founded in 1988 by Wang Jianlin, one of the richest people in China, Dalian Wanda is the world's largest private property developer and owner. The conglomerate is also the world's biggest cinema operator due to its US holdings.
Before bidding for the Nine Elms Square site Wanda already inked a deal to undertake the development of adjacent hotel and residential scheme One Nine Elms.
Nine Elms on the South Bank is one of London's key areas for new mixed-use development.
The group's failure to close the Nine Elms Square transaction comes amid moves by the Chinese government to limit domestic companies' overseas investments in the wake of several high profile deals.
The concern is that some firms are taking on excessive debt, according to China's state council. Groups including Wanda, Fosun, HNA and Anbang are said to be in the firing line. All four are active investors in UK or European real estate.
Media reports have suggested that the Chinese cabinet has already attempted to restrict Wanda's access to capital, although the Hong Kong-based player has since agreed to divest around €8 bn of hotel and tourism schemes to its Asian peers to generate equity.
According to CBRE, Asian investors were the largest London buyers in H1 2017, having invested a total of £3.2 bn into the capital so far this year of which 90% – £2.9 bn – was accounted for by Hong Kong and Chinese investors.
