Caixin
Mar 30, 2021 07:41 AM
BUSINESS & TECH

Wanda Secures State Investment for New Property Management Unit

The new light asset unit, wholly owned by Dalian Wanda Commercial Management Co., will manage 368 existing Wanda Plazas
The new light asset unit, wholly owned by Dalian Wanda Commercial Management Co., will manage 368 existing Wanda Plazas

Chinese real estate conglomerate Dalian Wanda Group secured a 3 billion yuan ($457.34 million) government investment in its revamped property management business in preparation for a Hong Kong flotation.

The city government of Zhuhai, in southern Guangdong province, agreed to make the strategic investment in Wanda’s newly established light asset commercial management company, the developer said Monday in a statement (link in Chinese).

The new light asset unit, wholly owned by Dalian Wanda Commercial Management Co., will be located in Zhuhai and will manage 368 existing Wanda Plazas and a further 155 under construction. The new unit won’t hold any property assets, according to Wanda.

Business records showed that Wanda Commercial registered two wholly owned asset management units in Zhuhai this month, a move seen as part of a business overhaul.

Wanda Commercial last week withdrew an application for a listing in China, saying it would restructure its assets and consider an overseas offering.

A Wanda Group source close to the matter said Wanda Commercial is likely to seek a Hong Kong flotation after a restructuring.

Wanda Commercial went public in Hong Kong in December 2014, but in 2016 it went private in a HK$34.5 billion share buyback — worth $4.45 billion at the time — on the belief that it was undervalued. The goal was to relist on the mainland.

In January 2018, Wanda Commercial obtained a strategic investment totaling 34 billion yuan ($5.2 billion) from a group of investors — Tencent Holdings Ltd., retail giant Suning Holdings Group, e-commerce retailer JD.com Inc. and real estate developer Sunac China Holdings Ltd. In that deal, Wanda Commercial promised that it would seek a domestic or overseas listing by October 2023.

Wanda Commercial pared back its property development and sales business over the past few years as the parent company sought to offload assets to reduce debt. By the end of June 2020, Wanda Commercial spun off all of its property development-related businesses, according to company filings.

Wanda said the new light asset unit will make strategic investments and acquisitions with the Zhuhai government following its planned offering. The new company will also explore new profit models in addition to its main property management business, Wanda said.

Timmy Shen contributed to this story.

Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com).

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