No sales in project since February

IN a 30th-floor office of Wanda Commercial Properties in central Hong Kong, a vote to sell the Gold Coast’s Jewel development, and its sister project in Sydney, was passed unanimously.

There were 3,333,589,142 shareholder votes in favour and zero against the $1.13 billion “very substantial disposal” to AWH Investment Group Pty Ltd, an associate of property and investment group Yuhu Group.

Wanda Commercial had earlier tendered to the Hong Kong Stock Exchange documents that revealed the financial strain the project had placed on its finances and those of its parent group as the Chinese Government put the squeeze on foreign financing.

According to the documents presented to shareholders, just 40 per cent of Jewel’s luxury apartments had sold by the end of last December after more than two years of campaigning.

The situation not improved in the months since, with not a single unit sold since February, when staff were stood down and apartment sales were suspended after revelations the company did not hold a Queensland real estate licence. Yuhu confirmed sales were still suspended until the acquisition from Wanda was finalised.

The submission ahead of the March 12 shareholder vote said the buyers had valued their 55 per cent stake in the Gold Coast project at $317 million.

Documents tendered to the HKEX said Wanda’s operations on the Gold Coast and in Sydney project had banked more than $80.5 million in net pre-tax losses from July 2015 to September 2017, due mainly to finance costs and changes in valuation for the Sydney project.

The documents said the company expected a further $7.8 million net loss for the period from January to March 2018 and that it had spent $54.9 million on the Gold Coast project between September and December 2017.

Wanda Commercial told shareholders it would cost about $503 million to complete Jewel and another $859 million to finish the Sydney project, for which pre-sales have not commenced.

The company told shareholders disposing of the projects would “minimise its exposure to the uncertainty of the Australia property market”.

Wanda is yet to formally announce completion of the sale.

Yuhu Group in February settled its purchase of the 45 per cent of Jewel owned by Riyu Li’s company Ridong, which departed with the project’s real estate licence.

Ridong left the site as clear winners after buying the site from receiver of failed investment company City Pacific for $81 million in August 2009 and sold a 55 per cent share to Wanda for more than they’d paid for the entire site, clearing 100 per cent of their debt while retaining 45 per cent interest in the upside.