A cartoon figure mascot greets consumers inside a Wanda Plaza in Tianjin.
Commercial property giant Wanda Commercial Properties Co has signed strategic investment agreements with several internet giants to upgrade its retail business, a deal expected to pave the way for its planned initial public offering in August this year.
In a statement released on Tuesday, Dalian Wanda Group－Wanda Commercial's parent company－denied the move signals its exit from China's property market.
"It is a misread that Wanda Group will exit the real estate market in China. Wanda Group will continue to develop Wanda Plaza projects," the company statement said.
The investor group－including tech giant Tencent Holdings Ltd, leading e-commerce players Suning and JD, and property developer Sunac－plans to invest about 34 billion yuan (.37 billion) to buy a 14 percent equity interest in Wanda Commercial, the company said.
The partnership represents one of the world's largest single strategic investments between internet companies and brick-and-mortar commercial giants, according to Dalian Wanda. Wanda Commercial will have an estimated value of 243 billion yuan after this latest investment.
Tencent will invest 10 billion yuan for a 4.12 percent stake, Suning and Sunac will each invest 9.5 billion yuan to acquire 3.91 percent stakes, and JD will invest 5 billion yuan to acquire 2.06 percent of Wanda's shares, according to the agreement.
After the strategic investment, Wanda Commercial will be renamed Wanda Commercial Management Group and will aim to sell off existing for-sale properties within the next two years.
"The Wanda Commercial Management Group will stop engaging in property development and will turn to solely focus on commercial management. The relevant parties will strive to take the company public as soon as possible," the company statement said.
Wanda Commercial Management Group has seen its property rents generate double-digit margins this year. According to Dalian Wanda Group, revenue generated from its service sector represents 63.4 percent of the total, up 8.4 percent year-on-year. Rents bring in revenue of 25.5 billion yuan, a surge of 30.3 percent year-on-year, now accounting for 18 percent of its service revenue.
Ding Daoshi, an independent internet analyst, said: "The agreement among Wanda and Tencent, Suning, JD and Sunac is not only a collaboration in terms of capital, but also in big data and user operations."
The investor group will use its financial prowess to continuously support Wanda Commercial Management Group to speed up its growth, helping the company to achieve its goal of 1,000 Wanda Plazas operating in China, according to the statement.
As of end-2017, Dalian Wanda Group's flagship company held 31.51 million square meters of operating commercial property spaces, with 235 Wanda Plazas operating in China.