(Yicai Global) Jan. 30 -- Tencent Holdings Ltd. leads a group of four of China's biggest businesses in the acquisition of 15 percent stake in real estate heavyweight Dalian Wanda Commercial Properties Co., which aims to reduce its presence in the property development sector.
Online retail platform JD.com Inc., property developer Sunac China Holdings Ltd. and Suning Commerce Group Co., an electronics seller backed by Alibaba Group Holdings Ltd., join Tencent in investing a combined CNY34 billion (USD5.37 billion) in the Beijing-based real estate firm, Wanda said in a press briefing yesterday.
The investment represents tech firm Tencent's latest foray into the offline sector. The Shenzhen-based firm, in a similar move to rival Alibaba, aims to ramp up the use of its mobile payment services and data platforms by bridging gaps between online operations and brick-and-mortar industries such as traditional real estate and retail.
Suning Commerce will acquire a 3.91 percent stake in Wanda Commercial for CNY9.5 billion, though the capital contributions and shareholding ratio for the other investors remain unknown.
The deal marks a significant change in direction for Wanda Commercial, the main holder of Dalian Wanda Group's vast land reserves and property. As of the end of 2017, the company held 31.51 million square meters of operating commercial property spaces. Wanda Commercial operates 235 Wanda Plazas in China, which received 3.19 billion visitors last year.
"Starting today, Wanda Commercial will no longer be a property developer, but rather will become a pure commercial management company and will push to list as soon as possible," the company said in a press briefing on 28. Jan.
The company will adopt the name Dalian Wanda Commercial Property Management to reflect the investor make-up and change in strategy as it looks to a more asset-light approach in the face of falling revenues and recent increased regulatory scrutiny over its investments overseas.
The firm will sell off its existing for-sale properties in the next one to two years, and will exit the property development sector, positioning itself as a firm solely focused on commercial management.
Wanda Commercial Management will utilize the vast online resources of its internet-based investors along with its own huge offline commercial assets to carry out various collaborations to nurture new forms of consumer habits in China, the company said.