China's Wanda raises nearly $6bln for commercial property management unit - sources

The fundraising underscores investors' confidence in the Chinese commercial property market

  
An employee counts U.S. dollar bills at a money exchange office in central Cairo, Egypt, March 20, 2019. Image for illustrative purposes.

An employee counts U.S. dollar bills at a money exchange office in central Cairo, Egypt, March 20, 2019. Image for illustrative purposes.

REUTERS/Mohamed Abd El Ghany

HONG KONG - Chinese conglomerate Dalian Wanda Group has raised nearly $6 billion for its commercial property management business ahead of its Hong Kong IPO, in one of China's biggest such fundraising this year, four people with direct knowledge told Reuters.

Hong Kong-based private equity firm PAG led the fundraising, with $2.8 billion for the unit - Wanda Light Asset Commercial Management Co, said three of the sources.

PAG's investment includes a $1.9 billion equity portion and $933 million from a syndicated loan facility, two of them added.

Other investors include developer Country Garden , private equity firm CITIC Capital and tech giants Tencent Holdings and billionaire Jack Ma's Ant Group, said the two sources.

The fundraising underscores investors' confidence in the Chinese commercial property market even as Beijing unveiled new measures over the past year as part of its efforts to clamp down on irregularities and cool the debt-laden real estate sector.

Embattled developer China Evergrande Group has become the highest-profile casualty of the crackdown. 

Wanda Light Asset is valued at $28 billion in the pre-IPO fundraising, slightly below its earlier target of 200 billion yuan ($31 billion), said three of the people. The amount raised, however, doubled from its target of $3 billion.

Wanda, owned by billionaire Wang Jianlin - once China's richest person, and all the investors did not immediately respond to a request for comment.

The sources declined to be identified as the information is confidential.

Commercial property management business is still considered separate and safe from the real estate crackdown in the world's second-largest economy, said the sources.

Twelve such companies have raised a total of $1.4 billion from Hong Kong IPOs in 2021, Refinitiv data showed. Evergrande, Sunac China Holdings and Shimao Group Holdings all floated property management units last year.

Wanda was aiming to file for an IPO in September, Reuters reported in April, but one of the sources said the listing may not happen until early 2022, given the fundraising was signed in the last couple of weeks.

The unit, tasked with managing 368 Wanda Plazas plus 155 under construction, secured 3 billion yuan of investment from the government of the southern city of Zhuhai in March.

(Reporting by Kane Wu; Editing by Sumeet Chatterjee and Louise Heavens) ((kane.wu@thomsonreuters.com; +85228436590; Reuters Messaging: kane.wu.thomsonreuters.com@reuters.net))


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