Chinese property developer Dalian Wanda Group has raised US$807 million via a crowdfunding app which will be used to invest in five new Wanda Plaza shopping malls.
The Wanda crowdfunding app ‘Stable earner No 1’ is the company’s first foray into internet finance. It raised 5 billion RMB in just three days, creating a new global crowdfunding record in the process after its June 12 launch.
Wanda raised RMB500 million in a first wave of investment from individual investors and contributed to the sudden online “seckill” – within the first 50 minutes of the launch the RMB 100 million mark had been broken. Online subscribers included institutional investors who contributed a total of RMB4.5 billion.
Wanda says some people who missed out on the limited quota called Wanda executives urging them to continue the fund raising beyond the limit.
“To date, the normal investment limits set by large scale crowd funded projects around the world reaches into the millions, but a project on this scale is decidedly rare. For a product to launch and sell out so quickly is quite a feat,” said Wanda in a statement.
Wanda launched ‘Stable Earner No. 1’ in partnership with 99Bill, a company it recently acquired that provides online payment platform services. It sold units in 1000 RMB multiples.
Compared to the oversaturated market for financial investment products, the advantage of ‘Stable Earner No. 1’ lies in the fact that capital investment can flow directly into Wanda Commercial’s Wanda Plaza projects, and offers a much higher security than those investing on the stock market, the two companies submit.
“And this is why the product was named Stable Earner. It is not merely a no-lose deal; unpacking it, we can see that only on stable foundations can you stand to gain. Firstly, the project invests in the real economy. There are currently too many products on the market that lean too heavily on virtual assets, and for some products investors don’t even understand the specifics. The Stable Earner No. 1 Wanda Plaza project is in line with the national direction of industry development, and considers the current national economic transformation and the bigger picture of domestic consumption and urbanisation,” the companies stated.
“Secondly, we want to urge transparency. The funds raised from Stable Earner No. 1 will all be used exclusively in construction operations for Wanda Plazas. Investors can obtain all the relevant financial information from Wanda Commercial’s published materials.
“Thirdly, we offer stable returns. Under Wanda Group’s strong brand appeal, the annual occupancy rates and rental collection rates from its commercial real estate business average over 99 per cent. This is enough to ensure that investors can obtain a stable annualised rate of return of six per cent.”
Investors can trade their crowdfunding shares on 99Bill’s platform after three months. Longer term Stable Earner No. 1 can be converted into a REIT or purchased by a third party after three years, all options giving shareholders a return on their capital investment.
Wanda Group retains the right to purchase the entire shares after seven years at 1.5 times the issue price.
