Wang Jianlin continues the expansion of his retail empire in mainland China, as the billionaire’s Dalian Wanda Group announced the opening of three large shopping malls just months after the commercial property developer chalked up a record drop in revenues.
On June 16th and 17th Wanda, which is already China’s largest commercial developer, opened three malls covering a total of 430,000 square metres in three developing cities. The three properties, which are Wanda’s 188th, 189th and 190th shopping centres on the mainland, are the latest installments of a commercial property empire that has helped make the billionaire investor China’s richest man.
While Wang has gained fame for his cross-border plays, including Wanda’s acquisition of AMC Entertainment, its 20 percent stake in Atlético Madrid and a failed bid to buy purchase Dick Clark Productions for US$1 billion, in a recent and wide-ranging interview with the Financial Times, the one-time PLA officer confessed a renewed commitment to the Chinese market. “China’s entertainment market, tourism market, [and] sports market have just begun,” he told the Financial Times, “These areas must be the focus of our investment.”
Doubling Down on China’s Third and Fourth Tier
Wang has backed up his belief in the mainland’s market potential with one of the country’s leading pipelines of deals, with Wanda’s website showing another 80 retail projects under construction. The three new projects, Nanning Wanda Mall and Fuzhou Wanda Plaza in Jiangxi province, along with the Fuyang Yingquan Wanda Plaza in Anhui show Wanda’s commitment to reaching even the smallest of mainland markets.
In its statements Wanda noted first-day attendance across the three properties of 600,000 visitors. The Fuzhou mall which serves a fourth-tier city with an urban population of less than 1 million people recorded 230,000 visits for its debut, according to Wanda’s website.
The Nanning Wanda mall is part of what the developer terms “an all-season indoor entertainment kingdom with a theme of “Gui Culture” celebrating the lifestyle of a local ethnic group. The complex teams an interactive children’s park, a movie theatre and an indoor pedestrian street with a five star Nanning Wanda Realm Resort Hotel which opened on the same day as the mall.
To 1,000 and Beyond
The three shopping centers play into Wang’s plans to construct a portfolio of 1,000 mainland malls by 2025.
The property plan, which mostly targets third- and fourth-tier Chinese cities, marches on despite challenges for the retail-centric company as well as the Chinese economy. In 2016, revenues for Wanda’s commercial property division dropped by 25 percent, the first such slide in more than a decade, according to Reuters.
What’s more, China now faces a retail glut. As Chinese consumers increasingly turn to e-commerce – which accounts for almost US$900 billion in sales in China alone each year, which is roughly half the global total – retail vacancy rates continue to rise while rents have stagnated, says the Wall St. Journal. And the emergence of online sales has impacted third- and fourth-tier cities in particular.