Dalian Wanda has sold its landmark hotel and residential development in Nine Elms which is still under construction as it comes under increasing pressure to cut down its foreign investments.
It has sold One Nine Elms, a development with a twin set of skyscrapers, to Hong Kong-listed Guangzhou R&F Properties. The deal is worth £59m, plus a loan payment of £159m to Wanda Hotel Development, which designs and operates hotels and is a listed subsidiary of Dalian Wanda.
This is the latest piece of real estate that has been bought by R&F from Dalian Wanda as it tries to trim down its foreign investments after the Chinese government issued guidelines to regulate overseas activity in a change that has curbed the country’s frenzied M&A activity in recent years.
Last August R&F bought 77 hotels from Dalian Wanda for $3bn (£2.2bn), and in the same month Wanda pulled out of a deal to buy a plot of land nearby for £470m, on the site of the former New Covent Garden Market. That plot was later snapped up by R&F Properties and China’s CC Land, which owns the Cheesegrater tower, for £470m.
In November, Wanda Hotel Development said it was carrying out a strategic review of its projects, while also announcing it was planning to open 1,000 malls across China with mini theme parks.
Developers of property in Nine Elms have struggled as the area became known for producing a glut of expensive luxury flats as prices were falling. In 2013, Wanda paid £88.8m for the One Nine Elms plot, and it is estimated to be worth £700m when it is built. Construction has since begun on the 56-floor tower and a five-star hotel, which will serve the apartments when completed, even providing a turndown service.
Wanda declined to comment, and R&F Properties could not be reached for comment.