Dalian Wanda pulls out of £470m deal in Nine Elms
DALIAN WANDA has pulled out of a deal to buy a plot of land in London’s Nine Elms redevelopment area amid increased scrutiny of foreign investment by Chinese companies.
Wang Jianlin’s company was in the process of buying Nine Elms Square for £470m, on the site of the former New Covent Garden Market, from St Modwen and Vinci.
Last week the Chinese government issued guidelines to regulate overseas activity in a change that could signal the end of the country’s frenzied merger and acquisitions activity. Beijing will limit deals in property, hotels, entertainment, sports clubs, and the film industry, stepping up its campaign against what the state planner described as the “irrational” acquisitions of foreign assets.
The 10-acre site sits in an area of London that is being heavily developed, and Wanda is currently building a twin set of skyscrapers in the same area, the £700m One Nine Elms. Analysts at Property Vision have described the area as having “Nine Elms disease”, with a glut of property coming on to the market amid falling prices.
The site has now been sold to Hong Kong-based R&F Properties. In June, Wanda and St Modwen exchanged contracts on the site, but it said it had since transferred the asset. Last month China blocked banks from funding some of Wanda’s foreign investment projects.
Wanda has been under pressure to downsize its assets and has been restructuring to reduce debt. Last month it sold off its theme parks and hotels, and Mr Wang said that the company would change its investment focus to the domestic Chinese market.
It has investments in hundreds of properties globally worth $40bn, according to Real Capital Analytics.