Wanda’s first Beverly Hills adventure won’t be last for Chinese developers
Developer's move may set precedent for its Chinese peers to enter the US commercial property market amid fierce rivalry at home
Dalian Wanda Group, China's largest developer of commercial properties, has made its first foray into Beverly Hills, Los Angeles, blazing a trail for other Chinese developers eyeing the world-famous luxury shopping destination.
Wanda announced on Friday that it had won a plot at 9900 Wilshire Boulevard in Beverly Hills, beating out more than 10 bidders from Asia and North America.
It said it planned to invest US$1.2 billion to build a mixed-use development, without disclosing details, including the price it paid for the site.
"Wanda has already built up a large retail operation on the mainland. The move shows the developer wants to go overseas in the light of limited room for expansion at home, particularly in the highly competitive retail industry," said Thomas Lam, the head of valuation and consultancy at international property consultancy Knight Frank.
"It may set a precedent for more mainland Chinese developers to enter the commercial property market in the United States."
Property prices in the US would probably be lower than those in mainland China and Hong Kong, he said.
Wanda, which owns hotels, commercial properties and department stores, said last year that it would build a 160-room luxury hotel in London as part of a £700 million (HK$9.1 billion) residential project.
British Prime Minister David Cameron said after meeting Wanda chairman Wang Jianlin that the developer would invest £3 billion in urban renewal projects in the country.
Other Chinese developers expanding overseas include Greenland Group, which bought the site of Britain's oldest brewery, Ram Brewery, in London in January in its first venture into the European market. Two months later, it acquired the site of Europe's tallest residential tower, in London's Canary Wharf financial district.
Wanda's Beverly Hills site is in a prime luxury residential area that is 10 minutes' walk from Rodeo Drive, one of the world's leading high-end retail destinations.
The site is five minutes' drive from the University of California, Los Angeles, and 10 minutes' drive from Hollywood. It is down the road from the Los Angeles Country Club, a 36-hole private golf course. To the west lies El Rodeo School and to the east Beverly Hills High School. Surrounding the site are hotels from international chains such as The Peninsula and Hilton.
The location is widely regarded as the prime development area for luxury properties in Los Angeles.
"The Los Angeles project will serve as Wanda's first important step into Hollywood," Wanda said. "The company will set up a Los Angeles office, which will handle entertainment-sector investments, while the New York office will be responsible for commercial-sector investments."
The company said the Los Angeles office would leverage on Hollywood's solid film industry resources to support the group's Qingdao Oriental Movie Metropolis and Qingdao International Film Festival projects in China.
The office would also be the base for investments in local film production companies or global theatrical releases, it said.
"The Los Angeles project is expected to aid China's entry into Hollywood's film industry and generally promote Chinese culture abroad," the group said.
Wanda acquired US-based cinema chain AMC Theatres in 2012 for about US$2.6 billion.