Ambitious Sunac buys its way to the top of China’s property league
The developer’s purchase of most of Wanda’s tourism assets increases its land bank by 70 per cent as it eyes expansion
Sunac China’s US$9.3 billion acquisition of hotels and tourism projects from Dalian Wanda Group will increase the fast-expanding developer’s land bank by about 70 per cent, according to details released on Tuesday.
The purchase of most of tycoon Wang Jianlin’s hotel and tourism assets adds 50 million square metres to the ambitious builder’s existing land reserves of 73 million sq m, bringing its total land bank area to 123 million sq m.
Sunac, currently the seventh-largest Chinese homebuilder, founded by Shanxi tycoon Sun Hongbin, saw its share price jump 14 per cent to close at HK$16.82 in Hong Kong after it resumed trading on Tuesday. On Monday the acquisitive developer agreed to buy 76 hotels and 91 per cent equity in 13 theme parks and projects classified as culture and tourism from Wang’s Wanda Group as the conglomerate was in need of cash to repay debts.
Morgan Stanley estimates the newly added land bank can contribute a total of 770 billion yuan to contracted sales over next 15 years, or 51 billion yuan each year compared to Sunac’s 2017 sales forecast of 250 billion yuan.
Sun will certainly be hoping his purchase – the biggest single property transaction in China’s history – helps him achieve his ambition of making Sunac one of the country’s largest developers.