Wanda scraps 470m British pound purchase of London plot

Billionaire Wang Jianlin's Dalian Wanda Group has scrapped plans to buy a land plot in London for £470 million (S$823 million), amid the Chinese government's intensifying scrutiny of overseas investments.

Guangzhou R&F Properties Co and C C Land Holdings Ltd will buy the 10-acre Nine Elms Square land, Michael Lee, R&F's corporate finance director, said in an interview in Hong Kong Tuesday.

Big Chinese dealmakers such as Wanda, Anbang Insurance Group Co, Fosun International Ltd (復星國際) and HNA Group Co (海航集團) have been under increasing scrutiny this year as the Chinese Communist Party steps up its clampdown of capital outflows to protect the yuan from weakening further. The revamped London property deal came on the heels of the government's clearest-yet directive laying out rules to invest in overseas deals.

The move is the latest sign that Wanda's chairman and chief executive, Mr Wang, who was one of China's most prolific buyers of overseas assets until past year, is downsizing. In July, Sunac China Holdings announced 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 ¥63.2bn ($9.3bn).

Wanda has purchased the 10.2-acre (4.13 hectare) site in the city's Vauxhall area near the Battersea power station from a joint venture of United Kingdom developer St. Modwen Properties and French construction giant Vinci, according to a Monday announcement on the London Stock Exchange by St. Modwen. A representative at C C Land declined to comment. On Friday, China's State Council announced new rules limiting overseas real estate acquisitions by Chinese companies, and Wanda is already being punished by authorities for its "irrational" deals.

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.

Wanda still owns the £700 million One Nine Elms twin-tower complex being developed on the south bank of the River Thames.

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 site is directly adjacent to another Wanda project, the long-delayed One Nine Elms development.