After selling 13 Wanda tourism cities to Sunac China less than two weeks ago, mainland real estate tycoon Wang Jianlin’s Dalian Wanda Group has agreed to build a new Wanda tourism city in the northwestern China city of Lanzhou.
The Dalian-based conglomerate on Wednesday signed an agreement with the Lanzhou municipal government in which it promised to invest as much as RMB 30 billion ($4.32 billion) into the project, which is scheduled to start construction in 2019 and finish in 2021.
With Wanda now exited from its tourism business, the company which remains China’s largest commercial real estate developer, is positioning the Lanzhou project as part of its “asset light” development-as-a-service model, which may imply a future financial backer for the project in the capital of northwest China’s Gansu province.
An Asset-Light RMB 30 Bil Development
Famed for its hand-pulled, knife-cut wheat noodles, Wanda is travelling to Lanzhou to build its first tourism project in Gansu province and its twenty-first such development nationwide. Lanzhou Wanda Tourism City will include a theme park, hotels, a bar street, and a tourism centre, according to the company’s announcement.
The development, based on an 866,667 square metre site, will be developed into one of Wanda’s largest-ever theme park based projects, after the company’s Qingdao Oriental Movie Metropolis and its Chongqing, Chengdu, Wuxi and Nanchang Wanda tourism cities, all of which were sold to Sunac last year.
According to Wang Jianlin, the newly launched project is also a part of the company’s asset-light scheme, although the privately-owned developer has yet to announce any financial partners for the tourism-led development.
Grey Rhino Takes on New Projects
After being targeted by the central government as one of China’s over-leveraged enterprises after the government began to crack down on overextended “grey rhinos”, a term referring to a slow-moving but hard to deter threat, Wanda has been selling off assets since 2016. In late January, the real estate conglomerate revealed a plan to transform itself from a property developer into a development service provider and multi-channel retail operator.
That strategy was announced at the same time that Wanda agreed to sell a 14 percent stake in its commercial property business to an investor group led by Tencent, and was followed a few days later by the developer’s hotel arm selling a pair of Australian projects in Sydney and the Gold Coast to a company controlled by Australian-Chinese political donor Huang Xiangmo for A$315 million ($247 million).
Wanda Theme Park Business Takes a New Form
The Lanzhou project was announced just a few weeks after Wanda exited from a theme park management business which many marked as the unofficial end of its tourism division.
In that sale in late October, Wanda agreed to hand over the management company responsible for managing its 13 existing tourism cities, as well as its Qingdao Oriental Movie Metropolis, a film production studio which Wang had planned as the Hollywood of Asia, to Sunac for RMB 6.28 billion.
Along with its RMB 43.8 billion acquisition last year, Sunac paid a total of RMB 50.1 billion to acquire Wanda’s tourism business.