Dalian Wanda, the real estate developer owned by China’s richest man, reportedly has acquired a site in Chicago to develop a $900 million mixed-use residential, hotel and commercial complex.
The development project in Chicago’s Lakeshore East area is the third major investment in the US by the company belonging to Chinese billionaire Wang Jianlin, and the second blockbuster deal by a Chinese investor in the Chicago market this year. Details of the deal were released in a statement from the company on July 8th.
Wanda bought into the lakeshore development by acquiring a 90 percent stake in the project company from Chicago-based property developer The Magellan Group, which will retain a 10 percent interest in the project. No details of the consideration paid by Wanda to Magellan to acquire its stake were released by either of the parties involved.
The project plans call for building a 131,400 square metre, 350 metre tall tower on the 4,838 square metre site. The 89-storey building would be Chicago’s third-tallest and would include 240 luxury hotel rooms, as well as apartments and commercial space. Wanda indicated that construction would begin this year, with the building slated to open in 2018.
In the company’s statement, Wanda Group Chairman Wang Jianlin, said, “Wanda’s investment in this construction project is only our first step into the Chicago real estate market and in property investment in the US.”
The tycoon, who last year was estimated to be China’s richest man with a fortune of $14.8 billion added that, “Within one year, Wanda will invest in five-star hotels in more US cities, including New York, Los Angeles and San Francisco.” Last year, Wanda already signed an agreement for a $1 billion hotel project in New York.
Wang predicted that by 2020 Wanda would build a global five-star hotel brand, with presences in 12 to 15 major cities. In China, Wang’s Wanda Group already owns 75 department stores, 85 shopping plazas and 51 five star hotels.
During the last year, Wanda has already invested in hotel and other real estate projects in London and Madrid, Spain, making the Beijing-based group one of China’s most aggressive foreign real estate investors.
Chinese Investors Favoring Chicago
Wanda’s development project in Lakeshore East marks the second time this year that a Chinese investor has made a major deal in America’s third-largest city.
In March this year an investment vehicle majority controlled by China Cinda, the nation’s “bad bank,” together with a US partner spent $304 million to purchase a 65-storey office building in Chicago.
The March deal for the tower at 311 South Wacker Drive was the first major buy of a US real estate asset by a Chinese investor away from either the east or west coasts of the country. To this day, Chinese investors maintain a strong preference for acquisitions in the US “gateway” cities of New York, San Francisco and Los Angeles, despite fierce competition for prime assets in those urban centres.
Wanda’s Third US Investment
The Chicago investment was the third major undertaking for Wanda in the United States, with the most recent previous project being the company’s New York hotel project.
Wanda’s first US project was its $2.6 billion acquisition of theatre chain AMC during 2012, which helped to establish the Chinese company as a global player.