4 US Investments for Dalian Wanda Owner Wang Jianlin

Billionaire real estate developer Wang Jianlin dominated the headlines last week as he was named China’s richest man by Forbes, and announced his intention to invest US$5 billion per year outside of China for the next five years.

“Every year we should have around a few billion U.S. dollars,” said Wang, while attending the World Economic Forum in Dalian, northern China.

The owner of China’s Dalian Wanda group has already made a few high profile investments this year by snatching up yacht maker Sunseeker for US$510 million, and buying hotels in New York and London for a reported US$1 billion each.

Wanda also said earlier this year that it plans to open Wanda hotels in eight to 10 cities around the world over the next decade, and just this month indicated that it was in the market for an international hotel management firm.

And Wang is no Jianlin come lately to outbound investment. During 2012, he bought  US theater chain AMC for US$2.6 billion in one of the highest profile Chinese acquisitions of an overseas company to date.

Now the outspoken mogul apparently plans to invest some of the wealth he has amassed by running one of China’s largest real estate developers to purchase more assets outside of China.

Since a man of Wang’s many interests and myriad responsibilities does not always have time to do his own deal hunting, I have taken upon myself to help out the busy billionaire by recommending four great investments for him to spend his first US$5 billion on.

The Mall of America

Wang is a man who likes his malls – he currently has 49 Wanda Plaza shopping centres across China – so what better prize than owning the third largest mall in the US, and one that has “America” right there in the name?

The Mall of America, is located in Bloomington, Minnesota, has a gross area of 452,000 m2, with 230,000 m2 available as retail space.  The mall includes the Camp Snoopy amusement park located  inside the mall complete with roller coaster.

Mall of America is the most visited shopping mall in the world with more than 40 million visitors annually so the potential to increase investment yield is right there for a developer who knows how to foster the right tenant mix.

A plan is in the works right now to double the size of the mall, but the project has been held up by a lack of financing. So the current owners could be in the mood for a Chinese billionaire bailout. The expansion cost is estimated at US$1.5 billion, so let’s say Wang puts down the $1.5 billion as a down payment and pays off the rest of the deal on the installment plan.

The San Francisco 49ers

In addition to owning Dalian Wanda, Wang is also well known in China for his Dalian Shide football club, so he is clearly a man who likes his sport.

However, if you want to make a splash in the US markets, especially the sports markets, then nothing beats owning your own NFL team.  With San Francisco’s position as a favorite destination for Chinese tourists and investors, the 49ers with their winning record and Super Bowl history are clearly the team to buy.

NFL teams have had a great ROI in the last couple of decades, so this is not just a vanity deal. When Texas billionaire Red McCombs sold the Minnesota Vikings in 2005 he reportedly made a $350 million profit on the $250 million he invested in 1998.

Better still, buying the 49ers would completely upstage the San Francisco investments made by rival developer Vanke, and the red and gold team uniforms would only need a bit of tweaking to look like Chinese flags.

Forbes recently valued the 9ers at a mere $990 million, so Wang will still have more than $2.5 billion left to spend.

Pebble Beach Golf Course

As anyone who has done business in Asia can testify, golf is an integral part of business culture, and golf course developments are popular investments among Asia’s high net worth individuals.

What better deal then, than to purchase America’s most famous golf course from its team of celebrity owners, including Arnold Palmer, Richard Ferris, Peter Ueberroth and Clint Eastwood.

Golf legends Tiger Woods and Jack Nicklaus have both won major tournaments on the course, and since the current owners purchased the club in 1999 for US$820 million, it’s safe to guess that it might be snatched up now for about double that price at US$1.6 billion.

That still leaves Wang US$1 billion to spend. Cash goes fast when you think about it.

MGM Grand Resort & Casino

For Wang’s final 2013-2014 investment, it’s hard to resist a good casino.

The MGM Grand was built in 1993, which makes it elderly by Las Vegas’ standards, and as it has gradually been eclipsed by the more spectacular newer properties such as The Sands and The Bellagio, it may be ripe for a takeover.

Given Wang’s ambition to build a global hotel chain, he definitely needs a property in Vegas, and despite its age, the MGM Grand has some major selling points.

Consider that the MGM Grand is the world’s largest hotel with more than 5000 rooms, and features more than 29,000 square metres of meeting and exhibit space. That could accommodate a lot of Chinese package tourists.

Since the hotel was built for US$1 billion in 1993 it has probably gone up a bit in value since then, but let’s say that Wang puts down his final 2013-2014 billion as a down payment and pays off the rest next year.

Have your own ideas on what Wang Jianlin should buy? Then feel free to add your suggestions in the comments section.