Chinese companies under pressure from Beijing not to buy properties abroad
August 29, 2017 Category China News Round-up, Weekly
Conglomerate Dalian Wanda has abandoned plans to buy the GBP470 million four-hectare Nine Elms Square site in London. Britain’s St. Modwen Properties and its French partner Vinci sold the site to another buyer. The Chinese government issued new rules to restrict foreign investments in sports clubs, real estate and entertainment.
Beijing had encouraged such foreign ventures in previous years but the government now worries about growing debt loads that could endanger the economy. In July Sunac China Holdings said it would buy 76 hotels and a 91% stake in 13 other “cultural and tourism projects” from Dalian Wanda Group in a huge deal valued at CNY63.2 billion. But in a joint statement a week later, the companies said another firm, R&F Properties, would instead buy 77 hotels for CNY19.9 billion.
Sunac will now only buy a majority stake in the 13 cultural assets, and for a price of CNY43.8 billion. It was reported in July that authorities plan to squeeze Wanda by cutting off new loans and regulatory approvals for deals, in a punishment for breaching curbs on overseas investments.
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