Dalian Wanda Buys Madrid Landmark, Eyes Chinese Tourism Market

on September 25 2014 | in Real Estate Travel | by | with No Comments

Edificio España, Dalian Wanda Group, Madrid, Chinese investors, Spain,

With an eye for bargain and a desire to capture the lucrative Chinese travel market, Dalian Wanda Group is investing in Spanish real estate.

Dalian Wanda, which is owned by one of China’s wealthiest men Wang Jianlin, has agreed to purchase Edificio España, a Madrid landmark, for €265 million. The Chinese conglomerate is getting the Franco-ero office tower for a third less than the €389 million that Banco Santander paid in 2005, according to Euro Weekly News.

Spain, which has been hit hard by the financial crisis, is eager to welcome Chinese money. In fact, Spain will give residency to any foreigner who purchases a property worth €160,000 or more. This is attractive proposition for wealthy Chinese who are looking to redeploy their cash as well as provide a hedge should they ever want to leave China.

Dalian Wanda is expected to develop the building into luxury apartments and a hotel. This is a growing trend among Chinese companies who are going offshore to compete for a piece of the Chinese outbound tourism market. They are particularly interested in hotel properties because “they believe Chinese tourists should feel like at home when they travel,” said Ms. Casaburi of Esade.

Other Chinese investors have already acquired Spanish properties for hotel development. The Valparaíso Palace, a hotel resort on the island of Majorca, was purchased by a Chinese company for €48 million. Meanwhile, HNA announced it will increase its stake in NH Hotels to nearly 30 percent.

As the Chinese middle class become wealthier and with more disposal income to travel, China has become the world’s main source of international tourists. Last year, Chinese tourists took 98.2 million trips overseas, up 18 percent from the year before, according to the China National Tourism Administration.

For the first half of 2014, Chinese spent more than $70 billion on their overseas trips, up 20.7 percent year on year. For 2014, an estimated 116 million Chinese are expected to travel overseas and spend $155 billion, up 20 percent from a year ago, CTA president Dai Bin tells China Daily.

The Edificio España sale is expected to open up more Chinese deals. “The deal put Spain on the map for Chinese institutional investors, who generally feel a lot more comfortable about going into a new market once they have seen at least one large transaction go ahead,” said Fernando de Góngora, the founder of Reliance Star Partners.

image source: wikipedia.org

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