December 18, 2017 / 10:55 AM / 7 months ago

China's Fosun sells off Sydney tower amid Beijing's outbound crackdown

HONG KONG (Reuters) - Chinese conglomerate Fosun has sold off its first investment in Sydney’s property market as Beijing’s crackdown on overseas deal-making has forced several Chinese companies to dial back on some ambitions abroad.

FILE PHOTO: A company logo of Fosun International is seen at the Fosun Fair held alongside the annual general meeting of the Chinese conglomerate in Hong Kong, China May 28, 2015. REUTERS/Bobby Yip/File Photo

Fosun, one of China’s most prolific deal-makers, sold its 95 percent stake in a Sydney office tower for A$142.5 million to Australian property investment firm Propertylink Group and Swiss-based investment manager Partners Group, Propertylink said in a statement on Monday.

Fosun in January 2015 bought the North Sydney tower at 73 Miller Street with Propertylink for A$116.5 million ($89 million), according to a statement Propertylink issued at the time.

Fosun described the latest deal as a “successful sale” in a statement emailed to Reuters.

“In key real estate markets such as London and Tokyo, Fosun follows the strategy of both buying and selling, strictly based on commercial and profitable considerations,” it said.

The Chinese government has been stepping up scrutiny of outbound investment, notably in sectors such as property, hotels and entertainment, as well as sports clubs and films.

The powerful state planner on Monday issued new rules for overseas investment by private companies, aiming to stamp out instances of firms violating policies, engaging in unfair competition and poor safety and quality management.

Beijing’s crackdown on showy overseas ventures has this year drawn in several corporations such as Dalian Wanda, HNA Group, Anbang Insurance Group [ANBANG.UL] and Fosun.

Wanda said last month it was open to “business opportunities” related to its portfolio of foreign landmark properties, in response to a media report that it was looking to sell $5 billion of its overseas property assets to a single buyer.

HNA is also negotiating to sell overseas properties, including ones in New York, Sydney and Hong Kong, as part of strategic streamlining, its chief executive Adam Tan told the Chinese publication 21st Century Business Herald this month.

Fosun, headed by billionaire chairman Guo Guangchang, is best known outside China for its portfolio firms including French resort chain Club Med, Canada’s Cirque du Soleil and Portugal’s largest listed bank Millennium bcp.

The company raked in a record net profit of 5.86 billion yuan ($889 million) over the six months to the end of June, compared with 4.39 billion yuan a year ago.

Its net gearing ratio, a long-time concern among investors and analysts, fell to 47.4 percent from 60.3 percent at end-2016.

“Fosun will conduct outbound investments in a steady and disciplinary manner under the guidance of relevant government regulations,” Fosun said in the statement.

Reporting by Julie Zhu; Editing by Robert Birsel

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