SHANGHAI (BLOOMBERG, REUTERS) - Billionaire Wang Jianlin's Dalian Wanda Group scrapped plans to buy a land plot in London for £470 million (S$825 million) amid the Chinese government's intensifying scrutiny of overseas investments.
Wanda's International Real Estate Center is no longer in pursuit of the 4ha Nine Elms Square land, the Chinese company said in a statement to Bloomberg on Tuesday (Aug 22). On Monday, St Modwen Properties said its venture with Vinci Plc sold the site, though it did not identify the buyer.
China's Cabinet on Friday (Aug 18) reiterated it would limit overseas investment in property, hotels, entertainment, sports clubs and the film industry, and planned to maintain a blacklist of domestic firms that violated overseas investment rules. Chinese banks have been told to stop providing funding for several of Wanda's overseas acquisitions to curb its appetite for offshore deals, according to sources familiar with the matter.
China launched a clampdown on capital outflows and overseas direct investment last year and Wanda, a property-to-entertainment giant run by one of China's richest men, Mr Wang, has been one of the companies most affected.
In March, Wanda's proposed US$1 billion purchase of American TV production company Dick Clark Productions collapsed under heightened pressure from Beijing on outbound deals. Squeezed for finance, Wanda in July agreed to sell 77 hotels to Chinese developer Guangzhou R&F Properties for 19.9 billion yuan (S$4.1 billion) and 91 per cent equity in 13 tourism projects to Sunac China for 43.8 billion yuan.
Wanda still owns the £700 million One Nine Elms twin-tower complex being developed on the south bank of the River Thames. Wanda, which had been diversifying away from its property roots and into entertainment in recent years, has interests in hundreds of real estate properties in 65 markets, with an estimated property value of about US$40 billion (S$54.4 billion), according to Real Capital Analytics.
Apart from selling assets, Mr Wang is also overhauling his business empire. Hong Kong-listed Wanda Hotel Development said earlier this month that it will sell property assets to its real estate affiliate, while shares of the group's Wanda Film Holding unit have been suspended from trading since early July, pending a restructuring of the company.
In the face of mounting scrutiny, Mr Wang told Caixin magazine in July that the group will change its business strategy and will switch its investment focus to domestic markets. Wanda plans to invest in a tourism project in the north-western Chinese city of Lanzhou, Gansu Province, Gansu Daily reported in August.