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E-commerce giants buying into Dalian Wanda malls

Three Chinese e-commerce giants led by Tencent are buying into shopping centres as part of an alliance that will help fund property magnate Wang Jianlin’s HK$30 billion (US$3.8 billion) plan to take his Dalian Wanda Group private.

Jianlin describes it as the world’s biggest single alliance between the new economy and bricks-and-mortar businesses as he vows to turn his flagship commercial property unit into an online-to-offline service provider.

After shedding properties in Australia, China and the UK to help reduce debt, he is now selling off nearly 14 per cent of Dalian Wanda Commercial Properties to some of the mainland’s biggest internet and retail players.

An investor group led by Tencent, along with e-commerce heavyweight, electronics retailer Suning and Wanda partner Sunac China Holdings, the stake is being sold for RMB34 billion (US$4.36 billion).

On its website, Wanda presents the share sale as part of a transformation of the company from a real-estate developer with nearly 240 shopping centres across China into a commercial management company focused on integrating online and offline consumption.

As part of the deal, Dalian Wanda Commercial Properties will be renamed Wanda Commercial Management Group.

However, the new partners may lead the financing of new malls, reports Mingtiandi, with the website statement noting “Tencent, Suning and other investors will use their financial prowess to continuously support Wanda Commercial to speed up its growth, helping the company to achieve its goal of 1000 Wanda Plazas in China as early as possible”.

Wanda says the partners are keen to relist the commercial real-estate unit, still privately held after a 2016 buyout led by Wang, “at the earliest opportunity”.

Also, the new group will use the online resources of Tencent, Suning and as well as its own offline commercial assets to “carry out various collaborations, jointly building a new consumption model in China that will integrate both online and offline services”.

Wanda Commercial’s total debt at the end of June was RMB279 billion, according to ratings agency S&P.

Tencent’s investment of RMB10 billion gives it a 4.12 per cent stake, while Suning and Sunac’s twin outlays of RMB9.5 billion will them a 3.91 per cent stake each, and’s RMB5 billion yields a 2 per cent stake.

Meanwhile, WeChat owner Tencent last week said it might buy into French retailer Carrefour’s China business, along with local retailer Yonghui Superstores. This follows Amazon’s acquisition of Whole Foods for US$13.7 billion.

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