Wanda Gold Coast Jewelry Resort Project effect Chart. (photo by Australian Financial Review)
According to the Australian Financial Review, Dalian Wanda Group is considering the sale of two large-scale development projects in Australia, which may be the first step for a large number of mainland enterprises to withdraw from Australia, or for real estate. The prices of infrastructure and agricultural assets are putting downward pressure on them.
Sources told the Australian Financial Review that Wanda is preparing to sell a $1 billion apartment and hotel building at the Sydney roundabout terminal (Circular Quay) and a $900m "jewelry (Jewel)" resort in Gold Coast, Kunzhou. Discussions are under way in Hong Kong. The final value of the two development projects is close to A $2 billion.
One source said a Hong Kong buyer was most likely to bid for the project. Evans (Roland Evans), a (Knight Frank) broker at Knight Frank International, a property consultancy, appeared in Hong Kong this week, but declined to comment on the deal.
Since Wanda entered Australia three years ago, any deal would need to "preserve face", the source said.
In January 2015, Wanda made a high-profile foray into the Sydney property market, spending A $415 million to buy Goldfields House. at the ring wharf Wanda plans to demolish the building and build new 5-star hotels, shops and luxury apartments.
"the operation of Wanda`s two major projects in Australia is still well under way," a Wanda spokesman said. Wanda also owns the Australian cinema chain Hoyts.
China`s outbound investment agreements totaled an all-time high of US $219 billion (A $ two hundred and seventy six billion six hundred and nineteen million nine hundred and ninety nine thousand nine hundred and ninety nine) in 2016, according to information company Diroki (Dealogic), according to the report. In the first half of this year, China`s outbound investment shrank by nearly half to just US $64.2 billion (A $81.1 billion).
"in the short term, these deals will be blocked," said Haugh (Fraser Howie), an independent financial analyst. Howie co-authored Red Capital (Red Capitalism), which explores the rise of China.
"at least for now, you can`t expect the Chinese to come and invest a lot of money," he said. However, Howie believes that in the long run, Chinese buyers will return. "China has too much money and there are not enough opportunities," he said. There will also be transactions, just finer, smaller, more centralized, and no longer random. "
Data released on August 7 showed China`s foreign exchange reserves rose for the sixth consecutive month, rising $24 billion (A $30 billion) in July to $3.08 trillion. It was China`s longest increase in foreign exchange reserves since 2014, when China`s reserves reached an all-time high of nearly $4 trillion.
Analysts pointed out that China`s foreign exchange assets held in the euro and other currencies would grow in value in dollar terms due to the weakness of the dollar, fuelling the data. Had it not been for a weak dollar, China`s foreign exchange reserves would have fallen by nearly $10 billion.
China`s capital outflows have also dwindled as Chinese investors` fears of a devaluation of the renminbi abated. The yuan rose about 3 percent against the dollar this year, after slumping 6.5 percent in 2016.
