Dalian Wanda, headed by billionaire Wang Jianlin, has acquired the right to lease and manage a commercial plaza in Shenzhen, marking its first foray into the city. Located at the intersection of Guangming Avenue and Guanguang Road in the eastern Guangming District, Yuefu Square has a gross floor area of 375,1000 sqm and comprises two office towers, two residential towers and a five-floor retail podium.
Although Wanda has already built a presence in Guangzhou, Dongguan, Foshan, Jiangmen and Zhaoqing, it has so far not managed to obtain a spot in Shenzhen. This has been largely due to scarcity of land. Wanda’s development model of acquiring low-priced land for large scale development doesn’t fit with Shenzhen’s reality.
Wanda has been adopting a light-asset model since its attempt to shed over US$9 billion worth of assets over the past year following an overseas acquisition binge. The once high-flying company was singled out for high debt levels in the country’s deleveraging campaign. This means it focuses on site selection, design, construction, leasing and management, collaborating with capital partners, with whom Wanda shares rental revenue.
One of Wanda’s criteria for choosing the right development site is that it must locate in an area with a GDP over RMB50 billion and per capita disposable income at RMB26,000. The city center must have more than half a million permanent residents and 200,000 residents within a 3km radius.
The Yuefu Squarecomplex is well located, adjacent to the upcoming metro Line 6 of the Sightseeing Station (观光站) and the Guangming City station, which is also the first stop of the Guangzhou-Shenzhen-Hongkong hi-speed railway’s Shenzhen section.
The lease term of this project is 9 years and 5 months and the listed rental price is RMB48 per square meter per month, increasing by 5% every two years. It also has a rental-free period of 12 months but the property will be delivered in August 2022.