R&F, CC Land scoop London site as Wanda retreats

Two Hong Kong-listed Chinese developers take on $606 million deal originally struck by Wanda – before Wang Jianlin's empire hit turbulence.

China's R&F Properties and CC Land have snapped up a prime site in central London, and R&F spokesman confirmed to FinanceAsia on Thursday night – hours after Wang Jianlin’s Dalian Wanda said it was calling off the purchase.

Wanda’s International Real Estate Centre confirmed it did not complete the purchase of the Nine Elms Square site, but did not explain why it had pulled the acquisition. That came after the vendor, St Modwen Properties, confirmed in a statement on Monday that the £470 million ($606 million) sale of the site had gone through – without naming the buyer.

“Wanda has ended the plan to acquire the 10 acre [four hectare] Nine Elms Square in London,” a spokesman told FinanceAsia.

Reports in the UK said the site had been sold to the Hong Kong-listed unit of R&F Properties. A spokesman for R&F confirmed the reports and said its partner in the deal was CC Land, a Hong Kong-listed group founded by Chongqing developer Cheung Chung-kiu which made a splash earlier this year with the $1.4 billion purchase of the Leadenhall Building in the City of London.

The involvement of the two Chinese developers underscores that this is not a case of China's regulators ruling out overseas dealmaking but rather another symptom of the pressures that have seen Wanda's meteoric rise abruptly reverse.

St Modwen first announced the sale of the site to Wanda Commercial Property Hong Kong in June. But since then little has gone right for the Chinese property behemoth, whose founder Wang once had ambitious plans to go head to head with Disney as a theme park operator and become an international player in the movie industry.

On July 10, Wanda struck a deal with property developers Sunac China and Guangzhou R&F Properties, selling most of its hotels and theme parks for $9.5 billion.

A week later, media reports said the Chinese government had ordered lenders to cut funding to six of Wanda's overseas acquisitions as they violated Chinese rules.

Days later, Wang told Chinese publication Caixin Wanda would focus on investments in China, in a response to the country’s policy agenda.

Following the asset disposal, its Hong Kong-listed unit, Wanda Hotel Development, in early August said it will sell most of its property assets, including those in London, Chicago and Sydney, to its unlisted affiliate, for an undisclosed amount. In exchange, the Hong Kong-listed unit will purchase a theme park design and construction company for Rmb6.3 billion.

Wanda Commerical Properties, the flagship of Wang's business empire, is looking for a Shanghai listing after the commerical property unit completed a $4.4 billion take-private deal in August last year. Wanda listed its property arm in December 2014, when it raised $3.7 billion, the largest Hong Kong IPO of that year.

The move comes after the State Council, China's cabinet, set out clear rules reflecting its stance on overseas investment in areas including hotels, sports clubs, entertainment ventures and real estate  – all of which Wanda had been an enthusiastic purchaser of.

But the fact another Chinese developer is a potential beneficiary in this case underscores the fact China's rules may not be black and white.

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