Wanda on track with €272m sale of Madrid landmark building
Chairman Wang Jianlin foreshadowed exit from Spanish market in a May interview, saying long battle with local authorities to renovate Edificio Espana was a learning experience
Dalian Wanda Group’s Europe unit signed a preliminary agreement to sell the Edificio Espana building in Madrid to Spanish investment group Baraka, in a move that will see the Chinese company exit the Spanish real estate market after feuding with city authorities for two years over plans to renovate the landmark.
Baraka Global Invest made a €272 million offer for the 63-year-old building, said Wanda Hotel Development, a subsidiary of Wanda, in a statement on Friday, noting that the final agreement would not be signed until due diligence was completed by mid-October at the latest.
In 2014, Wanda paid €265 million for the 25-storey building, a landmark skyscraper in the centre of Madrid that was embroiled in financial trouble. The group planned to renovate it into a luxury hotel and shopping complex that targeted mainland Chinese travellers.
The deal marked the developer’s first real estate project in Spain and was aimed at strengthening the conglomerate’s brand.
However, the ambitious plan became mired in controversy when Wanda proposed tearing down the structure for safety reasons instead of maintaining the original facade. The new mayor of Madrid refused the proposal.
In an interview on China Central Television in May, Wanda said it was still negotiating with local Spanish officials.
“If it fails, we would sell the building and never invest again,” Wang said during the interview.