Wanda Hotel Development fell by more than 6%, and its 21 hotel management agreements with Sunac were terminated. What happened?

This matter is mainly about the cooperation between Sunac Group and Wanda Group. Sunac Group has now officially taken back the management rights of the 21 hotels previously managed by Wanda Group.

To some extent, whether it is the current Wanda Group or the Sunac Group, all current real estate companies are having a hard time, because these real estate companies have very high debt ratios and at the same time They need to deal with the pressure of reducing leverage, so they will make strategic adjustments at such a juncture. Regarding the question you asked, I will try to explain it in detail from the following points.

1. What is going on?

Let me first talk about the ins and outs of this matter. When Wanda Group encountered a debt crisis, Sunac Group acquired 21 hotels of Wanda Group around 2017, and at the same time owned the properties of these 21 hotels. management rights. At the time of the acquisition, Sunac Group stated that the management rights of these hotels would remain unchanged and would still be managed by Wanda Group, and a management cycle of approximately 20 years had been formulated. But just three years later, Sunac Group officially took back the management rights of Wanda Group, and will then take the initiative to manage these 21 hotels.

2. Sunac Group needs to further control its assets.

Although these 21 hotels are managed by Wanda, the actual control rights belong to Sunac Group. Sunac Group currently needs to comprehensively manage these projects and actively control its own assets in this way. And reduce your own leverage level. To some extent, it would be better for Sunac Group to hand over these assets to Wanda for management.

3. Sunac may have a new round of strategic adjustments.

As I said above, Wanda Group itself has very rich management experience, and it is a better choice to hand over these hotels to Wanda for management. The reason why Sunac chose to terminate the management agreements of these hotels, I personally guess, may be related to Sunac’s subsequent strategic adjustments. Sunac may enter into a new round of strategic cooperation with other companies in this way, and we can wait and see.