China’s largest commercial property company has ditched plans to buy Nine Elms Square in south-west London after a clampdown by regulators in Beijing on overseas investment.
A joint venture between St Modwen Properties and Vinci had exchanged contracts to sell the 10-acre site, previously home to the New Covent Garden flower market, to Dalian Wanda’s Hong Kong division in June. It has now been sold to an unidentified buyer for £470m.
The site, which has planning permission for 1,900 “high-quality” flats, most with river views, forms part of the revamp of the Nine Elms area south of the Thames, where 20,000 mainly luxury homes are being built by a number of developers. It is the capital’s largest residential development site.
Dalian Wanda, whose assets range from property to entertainment, is run by one of China’s richest men, Wang Jianlin. It is one of the companies that have been most affected by the Chinese government’s clampdown on capital outflows to protect the yuan from further weakening.
Beijing issued rules last Friday to limit overseas investment in property, hotels, entertainment, sports clubs and the film industry, and threatened to blacklist firms that violated those rules.
It is the latest setback for Wanda, whose planned $1bn acquisition of the US TV company Dick Clark Productions fell through in March under pressure from Beijing. The conglomerate agreed last month to sell most of its hotels and theme parks for $9.5bn.
The downturn in the London luxury housing market made Nine Elms Square a risky investment for Wanda.
The Malaysian developers of the nearby Battersea power station redevelopment have also been hit by the slump in sales at the top end of the market, and are scaling back plans for luxury homes. Wanda still owns the £700m One Nine Elms twin-tower complex, also near the river.
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