SYDNEY/HONG KONG, Jan 13 (Reuters) - Dalian Wanda Commercial Management raised $400 million in a U.S. dollar bond, a term sheet seen by Reuters showed, in the first publicly sold dollar bond by a Chinese property-related firm since late 2021 when the sector's debt crisis came to a head.

The company, the property services arm of commercial property developer Dalian Wanda Group, increased the size of the deal due to strong demand from investors during the bookbuild, people familiar with the deal told Reuters.

The transaction marks a breakthrough for China's high-yield bond market, but participants expect only developers with strong balance sheets will be able to tap the dollar debt market after a string of debt defaults and payment extensions since late 2021.

The sector has been hard-hit since liquidity troubles at China Evergrande Group deepened, leaving companies little room to raise fresh funds offshore.

Final pricing for Wanda's 11%, two-year bond was set with a yield of 12.375%, compared to the initial price guidance given to investors of 12.625%, the term sheet showed.

A presentation by Wanda Commercial Management Group seen by Reuters said the book received 3.7 times over-subscription, with $500 million orders from long-only funds, including Blackrock, Fidelity, Pictet AM, Invesco and PAG.

PAG, Blackrock and Invesco declined to comment. Fidelity and Pictet did not respond to requests for comment.

Dalian Wanda Group did not immediately respond to a request for comment, while its commercial management arm could not immediately be reached.

Wanda had planned to raise $200 million, said two sources with direct knowledge of the matter, but the size was increased after strong orders from long-only investors, a third source said.

"This deal reopened the dormant China property and high-yield bond market, and received an active and positive reaction," the company presentation said.

While the deal was a breakthrough for China's high-yield bond market, advisers do not expect a surge in dollar bond issuance from China's property developers, especially those highly exposed to residential real estate.

Instead, some higher-rated companies with stronger balance sheets could consider issuing dollar deals, possibly after this month's Lunar New Year, one source said. Residential developers, the source added, would have to pay yields higher than Dalian Wanda Commercial's 12.375% to attract investor support.

"It's exciting a property firm can even sell any bond at this moment," said a developer who has extended repayments of its offshore bond. "But the dollar bond market will not come back easily. I think Wanda is an exceptional case and not a benchmark - investors are very selective. It's impossible for defaulted developers to issue dollar bonds now."

S&P Global said in a conference call Wanda's issuance represented a good signal to the market, and it was positive for corporates to have multiple financing channels even though the offshore rates could be higher than onshore now.

Unlike many other Chinese developers who focus on residential projects, Dalian Wanda Group relies on rental income and has an asset-light model. Wanda will use the proceeds to refinance existing debt and for general corporate purposes, according to the term sheet.

Moody's assigned a rating of Ba3 to the notes, while Fitch Ratings assigned BB. Both are high-yield grades.

Fitch said Wanda granted a keepwell deed and a deed of equity interest purchase undertaking to ensure the issuer has sufficient assets and liquidity to meet its note obligations. (Reporting by Scott Murdoch in Sydney and Clare Jim in Hong Kong; Editing by Lincoln Feast, Muralikumar Anantharaman and William Mallard)