China’s Dalian Wanda group is making plans to sell its remaining two overseas property developments, both in the U.S., including the controversial Beverly Hills project that Wanda once suggested would be the global headquarters of its entertainment division.
Wanda is now seeking buyers for the Beverly Hills development and another in Chicago, according to a report Tuesday by Bloomberg. The report said that Wanda’s combined investment in the two amounted to $2.1 billion.
Wanda bought the Beverly Hills property, which is just to the west of the Beverly Hilton across Merv Griffin Way, in 2014. The city has already approved a 235-unit condominium project for the empty site, once home to a Robinsons-May department store. Wanda is seeking permission to change it into a 193-unit condo project with a 134-room luxury hotel.
But moving ahead with the development became tricky when the Beverly Hilton raised objections. Wanda was later accused of using foreign money to fund the development. In November 2016, Wanda won approval to go ahead, but receiving that permission coincided with the moment that the company ran into major political problems back home.
The giant conglomerate’s aggressive expansion overseas sparked the anger of the Chinese government. An official investment prohibition list published in August last year looked tailor-made to hamper Wanda by banning further overseas moves in entertainment, hotels and sports.
Since then, Wanda has been battling to reduce its borrowings and sell off many of its overseas properties. Earlier this month, it agreed to sell off two properties in London and others in Australia.
Wanda has also sold off its leisure parks in China and its film studio in Qingdao, but may retain operational control in both cases. In a regulatory filing earlier this week, Wanda said that it had “no intention to terminate, downsize and dispose of its existing businesses in China.”
On Monday, restructuring of Wanda’s massive commercial property portfolio appeared to move ahead when Tencent, JD.com, Suning and Sunac China agreed to pay $5.3 billion for a 14% stake in Wanda Commercial. The move allows Wanda to extricate itself from a tricky position where it guaranteed to re-float the de-listed company or buy out minority investors at a guaranteed price.