UPDATE 0845 Chinese conglomerate Dalian Wanda has transferred its interest in the £470m Nine Elms Square, SW8, scheme to Hong Kong-listed R&F Properties and Cheesegrater owner CC Land.
Yesterday St Modwen and Vinci announced that the sale of the former New Covent Garden Market site had completed without stating the party they had sold to. In June the partners announced that they had exchanged contracts with a Wanda subsidiary, Wanda Commercial Properties (Hong Kong) Co. EG confirmed this morning that Wanda had transferred the asset to the Guangzhou-based R&F Properties.
R&F is unconnected to Dalian Wanda and its billionaire founder Wang Jianlin and is growing in the UK. Earlier this year R&F acquired the prime mixed-used development Vauxhall Square, SW8, site for £157.8m from CLS Holdings. The site sits adjacent to Nine Elms Sqaure, meaning the developer controls two large schemes at the Vauxhall end of the approach to Battersea Power Station.
It is CC Land’s third acquisition in the UK and its first in the residential sector and follows on from its £1.15bn purchase of The Leadenhall Building, EC3, commonly known as the Cheesegrater, in May.
Wanda has come under scrutiny from the Chinese government, which is looking to curb investment by Chinese companies into overseas real estate.
In July, the Chinese government blocked domestic banks from lending to Wanda on overseas investments and earlier this month Wang Jianlin restructured swathes of the Wanda empire in order to reduce its debt. He personally bought assets from Wanda including One Nine Elms, the project it owned next to Nine Elms Square.
The Chinese government is concerned about the systemic risk its largest investors pose to the country’s economy and the impact they are having on its foreign reserves.
Last week the Chinese government announced restrictions on investments into real estate, hotels, entertainment and sports clubs that were contrary to “peaceful development, win-win co-operation, and China’s macro control policies” in order to “promote the healthy growth of overseas investment and prevent risks”.
The government did say, however, that it would support eligible domestic enterprises to make overseas investments and to join in the construction of projects in the “Belt and Road Initiative” – its effort to spur development along the former Silk Road land and maritime routes.
Nine Elms Square is a 10.2-acre site with consent for 1,821 flats across three towers of between 32 and 54 storeys. It was originally put up for sale a year ago. A deal with another Chinese conglomerate, Macrolink Group, fell through in March.
Wanda subsequently put the site under offer, although an exclusivity period subsequently expired in May, before exchange was eventually reached the following month.
JLL advised St Modwen and Vinci on the Nine Elms Square sale. CBRE advised R&F on the acquisition of Vauxhall Square, while JLL advised CLS.
Nine Elms – on the ground
Wanda and R&F now have involvement in three sites a stone’s throw from each other in the area. They are a gateway to both Vauxhall to the north and Nine Elms, with Battersea and its iconic power station to the south.
R&F acquired Vauxhall Square from CLS for £157.8m in April. Construction had already started on a forward-funded Kings College London student housing scheme comprising 454 beds. Since then, construction has also started on 126 affordable units. That leaves R&F with 454 private homes, in towers of 50 and 48 storeys, along with 235,000 sq ft of offices and 75,000 sq ft of retail and leisure.
Wanda started construction on One Nine Elms in summer 2015 . However, progress has been slow, with it yet to come out of the ground. Multiplex took over the construction contract in January, after the previous contractor walked away. Here, 487 homes are planned along with 200 hotel bedrooms and 120,000 sq ft of offices, with towers of 42 and 58 storeys.
Nine Elms Square, now in the hands of R&F alongside CC Land, is the biggest scheme of the three, and has planning for 1,867 new homes in towers of up to 54 storeys.
Lambeth Council also has plans to remodel the Vauxhall gyratory and reintroduce a high street with two-way traffic. This should slow traffic and create more of a destination, rather than somewhere which sees people pass through quickly. A linear park going from Vauxhall all the way to Battersea Power Station that will pass all three sites is also planned and part of the design of all three sites.
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