Things were looking rosy for Dalian Wanda Group just a year ago, as the Chinese mega-company expanded its presence overseas.
In recent years, it bought AMC Entertainment, the world’s largest operator of movie theaters; purchased the movie studio Legendary Entertainment; and began to develop, through an L.A.-based subsidiary, a $1.2 billion condo and hotel project in Beverly Hills.
But the Chinese government’s new policies on overseas investment and heavy borrowing have hampered the real estate and entertainment conglomerate, which has relied heavily on loans from state-controlled banks. As a result of new pressures to pay off its debt, the company is rapidly shedding real estate holdings in its home country.
Wang Jianlin, Dalian Wanda’s chairman, sold 13 theme parks in various stages of development to Sunac, a Tianjin-based company, for $6.5 billion in July, The New York Times reported. The company also reached a deal with R &F Properties from Guangzhou in the same month, offloading 77 hotels for merely $3 billion.
Last year, Wanda shuttered its Movie Park in Wuhan, only 19 months after its opening, due to a bleak attendance rate. The company’s supposedly “seven star” luxury hotel in Wuhan now charges as low as $160 a night — and still struggles to find customers.
Wanda is now changing its business strategies from a focus on development to a focus on managing malls and theme parks for others in exchange for 30 percent of investors’ revenue.
Wanda still owns over 180 malls across China. [NYT] – Naiwen Tian