(Yicai) April 1 -- An investor group led by private equity firm PAG has agreed to pay CNY60 billion (USD8.3 billion) for a majority stake in Dalian Wanda Group’s shopping mall unit. It is the biggest single investment by Chinese PE in nearly five years and will ease the financial strain on the real estate giant.

The investor group, which also includes Citic Capital, Ares Management, and sovereign wealth funds the Abu Dhabi Investment Authority and Mubadala Investment, inked a deal on March 30 to buy 60 percent of Newland Commercial Management, the holding company of Zhuhai Wanda Commercial Management Group, Wanda said recently. Wanda retains the other 40 percent.

The stake purchase illustrates the group’s faith in the property manager after it failed to go public in Hong Kong last year. In December, PAG took the lead and promised to re-invest in Zhuhai Wanda even though a valuation adjustment mechanism deal, also known as a bet-on agreement, put in place before the planned listing stated that Dalian-based Wanda would buy back their equity if the unit did not float by 2023. 

The latest deal does not include a bet-on clause or one requiring Zhuhai Wanda to go public at any specific time. Newland will develop independently and representatives of the investors will join its board.

The bet-on agreement was made in 2021 when 22 investors, including Country Garden Holdings, Citic Capital, Ant Group, and Tencent Holdings invested about CNY38 billion in Zhuhai Wanda. After the last of four listing attempts was deemed unsuccessful on Dec. 28, the deal would have provided them with an exit and given Wanda a headache, as it would have needed to buy back their stakes and pay additional compensation amid a downturn in the property market.

Since last year, Wanda has sold 14 commercial complexes, including Wanda Plazas in the cities of Shanghai, Guangzhou, Tianjin, and Haikou. After entering 2024, the pace of divestment has not let up, reflecting the builder’s need to ease liquidity pressures.

Zhuhai Wanda has nine domestic bonds worth a total of CNY6.9 billion (USD950 million), and those that mature within a year amount to CNY1.9 billion, according to public information. It also has three dollar-denominated bonds of USD1.2 billion.

Editor: Emmi Laine