Wanda says its US$1.5b Australia projects ‘progressing well’, flatly denying reports they are up for sale
Shares in Hong Kong listed subsidiary Wanda Hotel Development Company surge more than 9pc after denial
Dalian Wanda Group has underlined that two of its US$1.5 billion Australia projects are “progressing well”, denying earlier reports it was in talks with a Hong Kong buyer to sell them both.
Wanda Hotel Development Company, a subsidiary, issued an announcement on the Hong Kong Stock Exchange at noon on Tuesday, saying it understands enquiries about the possible disposal of the group’s Australia assets are “reasonable in the circumstances”, but added it had no plans to sell the buildings at present.
“Having made such enquiries internally as is reasonable in the circumstances, the company wishes to clarify that, as of the date of this announcement, the company does not have any plan to make the said disposals referred to in the media reports, and thus such information is incorrect,” Wanda Hotel Development said in the statement. “Both projects are progressing as planned.”
John Wei, managing director of Wanda One Sydney, also told the South China Morning Post the construction of the two projects is “moving forward smoothly”.
“Wanda has never had any negotiations with any party. The construction of the two projects is moving forward smoothly, and apartment sales remain strong,” said Wei, adding that reports the property giant is fielding offers to sell the two projects in Australia are completely false.
The Chinese conglomerate was previously reported to be in discussion with a Hong Kong buyer to sell its A$1 billion (US$792 million) Circular Quay apartment and hotel tower in Sydney, as well as its A$900 million Jewel resort on the Gold Coast, according to the Australian Financial Review.
That report cited sources saying the Chinese company, which is facing a freeze on bank lending at home, is in talks to sell its two uncompleted projects in Australia.
One of the sources was quoted as saying a Hong Kong-based buyer was the most likely outcome and said any deal would need to allow Wanda to “save face” after its high-profile entry into the Australian market three years ago.
The group, the largest commercial real estate developer in China, had acquired the 1 Alfred Street and Fairfax House buildings in Sydney, dubbed the “No1 Sydney” project because of its prime central location in the heart of the Circular Quay precinct of the city’s central business district, according to its website.
It was the company’s second major property investment after it bought the Jewel project on Australia’s Gold Coast.
Wanda also owns the Hoyts Cinema chain in Australia, through a US$366 million acquisition in 2015.
The company says its other overseas projects are in London, Chicago, Istanbul and Los Angeles.
Bowing to regulatory pressure over how it financed an acquisition spree across the globe, chairman Wang Jianlin on July 21 vowed to shift his investment focus to be “mainly within China”.
That decision followed revelations that Chinese regulators had instructed the country’s largest lenders to cut funding for six of the company’s overseas acquisitions.
Real estate is among five areas, along with hotels, cinema, media and sports club businesses, handpicked by Beijing and put on a “negative list” for outbound investment. Morgan Stanley said in a recent report that suppressed China’s overseas property investment, accounting for 6.3 per cent of outbound direct investment in 2016, would weigh on the pricing of commercial properties in Australia, Hong Kong, UK and the US.
Hong Kong listed Wanda Hotel Development saw its shares surge more than nine per cent, trading at HK$1.09 during the afternoon session after issuing the statement.