DreamWorks Has New Plans for Delayed $2.4B Shanghai Entertainment District

US film studio DreamWorks Animation, together with two partners, last week celebrated plans for a RMB 15 billion ($2.4 billion) entertainment district in Shanghai that the group says will rival New York’s Broadway.

DreamWorks is teaming with an investment fund belonging to a local government media company, as well as Hong Kong-based bar and restaurant developer Lan Kwai Fong Group, to develop the property project along the west bank of Shanghai’s Huangpu River.

The Dream Center complex is planned to include 463,000 square meters (based on GFA) of offices, theatres, bars and restaurants.

However, the project which was originally slated to open in 2016, has now been pushed back into 2017 or 2018, while details remain undecided.

At a news conference held on the 15-hectare (40-acre) site once used for Shanghai’s 2010 Expo, DreamWorks Animation CEO Jeffrey Katzenberg told the press that, “This will become the world’s third great urban center of entertainment and arts alongside New York’s Broadway and London’s West End.”

DreamWorks, whose animated films “Kung Fu Panda” and “Shrek” have competed in the theatres with animated films from Disney and its Pixar subsidiary, appears to be squaring off against its better known rival in the entertainment destination market as well. Shanghai Disneyland, the first Disney park on the Chinese mainland is scheduled to open in the city’s Pudong district at the end of next year.

Where’s the Developer?

Dream Center will be jointly developed by China Media Capital – an investment fund belonging to Shanghai Media Group, Hong Kong-based developer Lan Kwai Fong Group, and DreamWorks. It is partly funded by state-run China Development Bank. Details of the investment structure were not immediately available.

For DreamWorks, the Dream Center is not only a venture into a new geographic arena, but also appears to be the first time the film studio has been involved in developing an entertainment complex of this sort.

Shanghai Media Group is the owner of most of Shanghai’s largest media properties, including television stations, newspapers and websites. However, while the group has previously developed real estate projects in the city, it has usually done this by providing the land for the project, while cooperating with more experienced developers for managing the project.

While Lan Kwai Fong has developed an immensely popular bar district of small shops in Hong Kong, its mainland ventures in second-tier cities including Chengdu, Haikou, and Wuxi have yet to match its Hong Kong success and do not approach the scale of the Shanghai project.

DreamWorks Animation joined with China Media Capital, Shanghai Media Group, and Shanghai Alliance Investment Ltd., in early 2012 to form film studio Oriental DreamWorks.

The Dream Center was included in the scope of that earlier joint venture agreement, along with a film studio, mobile, online, and interactive games, as well as consumer products. DreamWorks Animation owns 45 percent of that earlier JV.

Already Behind Schedule

A story in the Wall Street Journal indicated that Dream Center, which was originally slated to open in 2016 may have already caused its developers to lose some sleep. Here’s the Journal speaking to DreamWorks’ Katzenberg.

The size and scale [of the project] has gotten bigger and bigger,” said Jeffrey Katzenberg, DreamWorks Animation’s chief executive. “Securing the necessary approvals and getting financing took a longer time than expected.”

DreamWorks’ Hong Kong partners added that, although it was first announced in 2012, the details of Dream Center remain undecided. Here’s the Journal again:

Lan Kwai Fong Group Chairman Allan Zeman said that the group worked with 15 international and local architects to come up with designs for the T-shaped site and added that the design plan isn’t complete.

According to current statements from the developers, Dream Center is now set to open in 2017.