China’s Biggest Mall Manager Plans Hong Kong Listing

SINGAPORE—Chinese conglomerate Dalian Wanda Group Co. said it would list its commercial property service unit in Hong Kong, testing investor appetite for real-estate stocks during a Chinese housing market slump.

The unit, Zhuhai Wanda Commercial Management Group Co., which manages almost 400 malls across China, counts real-estate tycoon Wang Jianlin as its largest shareholder. This unit is part of its parent company’s efforts to shift its business away from capital-intensive real-estate development.

The company didn’t disclose how much stock it plans to sell or its targeted market valuation. The firm raised about $6 billion in July and August at a valuation of $28 billion, according to a preliminary listing document posted on the website of Hong Kong’s stock exchange late Thursday.

Mr. Wang was once China’s richest man, and has amassed billions of dollars of investments in property and entertainment assets. But the 66-year-old has kept a low profile since 2017, after his large acquisitions abroad received scrutiny from Chinese regulators eager to stem capital outflows.

The planned listing also comes as rising debt defaults at Chinese residential developers have cast a pall over China’s housing market. In late September, residential property giant China Evergrande Group missed some interest payments to dollar bondholders, and smaller rival Fantasia Holdings Group Co. defaulted on debt shortly after.

Zhuhai Wanda traces its history to 2002, but was incorporated in its current legal form in March of this year. It manages Wanda Plazas for its parent company as well as malls for third-party clients.

Wanda Plazas are supersized commercial complexes with all-in-one shopping malls that house cinemas, restaurants, clothing shops, smartphone and car retailers and other business outlets, as well as office space and hotels.

Of the 398 malls under its management, 70% are owned by its parent, the company said.

Dalian Wanda, the parent of Zhuhai Wanda, was the biggest Chinese mall operator in 2020, ahead of Seazen Holdings Co. and Century Golden Resources Services Group Co., which operated 100 malls and 85 malls respectively, according to the China Chain Store & Franchise Association. The subsidiary’s prospectus cited third-party research saying Zhuhai Wanda was the largest mall manager in China by gross floor area at the end of last year.

More than 40% of Zhuhai Wanda’s $1.66 billion in revenue in the first half came from managing the commercial properties, such as providing security services, cleaning and mall maintenance.

Evergrande, China’s most indebted property developer, has kept global markets on edge and sparked protests at home as it struggles to survive. WSJ explains why the company’s crisis is raising questions about the state of the world’s second-largest economy. Photo: Alex Plavevski/Shutterstock

Zhuhai Wanda counts Hong Kong-based private equity group PAG, Tencent Holdings Ltd. , and property developer Country Garden Holdings Co. among its investors, Thursday’s filing showed. Wanda Group said the proceeds from this IPO will be used to expand the number of malls it manages, and improve its existing facilities and data-processing capabilities.

The mall service provider is the latest unit to go public under Mr. Wang’s Wanda empire. Wanda Film Holding Co., whose shares are traded in Shenzhen, mainly operates cinemas as well as distributes films. Wanda Hotel Development Co. , listed in Hong Kong, develops and runs hotels, and has more than 100 hotels and resorts in China and overseas, according to its website.

Mr. Wang delisted his flagship commercial property development unit from the Hong Kong exchange in 2016, via a $4.4 billion buyout. But a plan to relist the business onshore in mainland China was never completed.

In 2017, Mr. Wang was one of a handful of Chinese billionaires, including Anbang Insurance Group Co. Chairman Wu Xiaohui and HNA Group Co. co-founder Chen Feng, whose companies’ borrowings to fund overseas projects were investigated by banking regulators.

Wanda’s overseas buying spree has included $3.5 billion for film-production company Legendary Entertainment and $2.6 billion for AMC Entertainment Holdings Inc., the world’s largest movie-theater operator. It has since sold most of its shares in AMC.

HNA’s Mr. Chen was detained by local authorities this September for suspected crimes, while Anbang’s Mr. Wu was sentenced to 18 years in prison in 2018.

Write to Anniek Bao at [email protected]