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Dalian Wanda bows to China pressure and exits Nine Elms deal

No deal: China's Dalian Wanda has walked away from a London land purchase: Jeremy Selwyn
No deal: China's Dalian Wanda has walked away from a London land purchase: Jeremy Selwyn

Chinese property giant Dalian Wanda was on Tuesday labelled the first “casualty” of mounting pressure from Beijing to cut back on big overseas investments, after it ditched plans to spend £470 million in Nine Elms.

The decision to exit the purchase of a 10-acre Nine Elms Square site, where there is scope for 1800 homes, comes as Chinese companies face increasing scrutiny from the Communist Party on capital outflows to protect the yuan from weakening further.

Mike Prew, an analyst at Jefferies, told the Evening Standard: “Last Friday the authorities in Beijing announced a shutdown of Chinese investment pipeline into overseas assets including property. The first casualty seems to be Wanda Group, scrapping plans to buy the New Covent Garden Market site for £470 million as the Chinese government’s scrutiny of overseas investments intensifies.”

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There was confusion in the London property market as the news emerged just a day after the Nine Elms Square seller — a joint venture featuring St Modwen Properties — said it had completed a sale after it was announced on June 21 that contracts had been exchanged with Wanda Commercial Properties (Hong Kong).

It is now understood that the purchaser is a newly formed UK company, with some reports saying it is a division of Hong Kong-listed R&F Properties, which is not linked to Wanda.

Fergus Keane, international partner at property agent Cushman & Wakefield, said the Chinese situation was “only a reconfirmation of existing regulations ahead of party elections”.