HK developers take over London site from Wanda

Hong Kong

TWO Hong Kong-listed developers, including the owner of London's Cheesegrater tower, agreed to buy a £470 million (S$819.9 million) land plot in London that Dalian Wanda Group Co relinquished after coming under Chinese government scrutiny.

Guangzhou R&F Properties Co and C C Land Holdings Ltd will buy the four ha Nine Elms Square land, Michael Lee, R&F's corporate finance director, said in an interview in Hong Kong on Tuesday.

Wanda, along with aggressive Chinese dealmakers such as Anbang Insurance Group Co, Fosun International Ltd and HNA Group Co, have come under government scrutiny over outbound investments in recent years.

The revamped London property deal came on the heels of the government's clearest-yet directive laying out rules to invest in overseas deals.

Under the new rules set by the state council, China's cabinet, investments in the gambling and sex industries are banned, while those in property, hotel, film, entertainment and sports are restricted.

By contrast, investments to support the nation's ambitious "Belt and Road" initiative backed by President Xi Jinping are encouraged.

It is the second time in five weeks that R&F, one of China's top 20 developers and listed in Hong Kong, has stepped in at the last minute as a buyer in a Wanda-linked deal.

Last month, R&F agreed to buy 77 hotels from Wanda for about 19.9 billion yuan (S$4 billion) in a surprise twist to a previously announced deal where Sunac China Holdings Ltd was to have been the sole acquirer of US$9.3 billion of Wanda assets.

The seller of the Nine Elms land, a joint venture between St Modwen Properties plc and Vinci plc, said on Monday that the transaction had been completed, without identifying the buyers. A representative at C C Land declined to comment.

Hong Kong real estate investor C C Land earlier this year paid £1.15 billion to buy the Leadenhall Building, as the Cheesegrater is formally known.

Mr Lee, who said that the buyers have already paid the seller, added that R&F owns a site adjacent to the Nine Elms land, making it an appropriate investment for the developer.

R&F too is no stranger to the UK capital, where demand for new homes has been buffeted by uncertainty caused by the "Brexit" vote and successive tax increases that penalise investors.

The company earlier this year bought Nestle Tower and surrounding land in the Croydon district from Minerva, Property Week magazine reported.

In June, Dalian Wanda Commercial Properties Co, the property arm of the Chinese conglomerate founded by billionaire Wang Jianlin, agreed to buy the Nine Elms land, and the deal was expected to be completed in the summer.

Wanda originally was going to develop the London site, near Battersea Power Station, into 1,900 homes as well as stores and leisure units.

The developers are discussing whether Wanda will be involved in the operation of the project, R&F's Mr Lee said. BLOOMBERG