China's richest man loses up to $29.4m in Spain property deal

China's richest man, Wang Jianlin, has lost up to 200 million yuan ($29.4 million; 26 million euros; ￡22.7 million) in a deal brokered in Spain three years ago because of a shift in exchange rates.

Wanda Hotel Development Co announced on June 2 that it had sold its stake in Plaza de Espana 19 Development SLU to Spanish property company Baraka Global Invest SLU.

The sale by Wanda Hotel, a subsidiary of Dalian Wanda Group, of which Wang is chairman, was completed on June 1.

As a result, shares in the Hong Kong-listed Wanda Hotel Development climbed by 1.45 percent to close at HK$0.70 (9 cents) on June 2.

According to an earlier announcement by the company, the sale price was 272 million euros, which was higher than the 265 million euros that Wanda Hotel Development paid for the Plaza in 2014.

But because the euro has depreciated since then, and the yuan has strengthened in the past few years, the company lost money in the deal.

Wanda paid the equivalent of 2.2 billion yuan based on the exchange rate in 2014. The 272 million euro selling price this week translates into 2.08 billion yuan based on current rates.

Therefore, Wang and his company lost almost 200 million yuan in the deal.

As a landmark in Madrid, Plaza de Espana used to consist of a luxury hotel, a business center and a number of apartments before 2006.

But it had been empty until Wanda took control three years ago.

After it was snapped up, the company planned to restore the Plaza to its former glory with a 200-room luxury hotel, high-end retailing space and 300 residential apartments.

But the blueprint was never turned into reality.

A change in attitude of the Spanish government and strong opposition by local residents to restoration work put the plan on ice for at least two years.

Eventually, Wanda lost interest in the project.

According to market researcher ASKCI Consulting Co in Shenzhen, the group has more than $15 billion on overseas acquisitions between 2012 and 2016.

Up to $7.5 billion has been spent on cultural and entertainment projects and $3.5 billion on commercial properties.

The company has been involved in projects in London, the Gold Coast of Australia, Sydney, Chicago and Los Angeles.

Wanda has also been looking at investments in Malaysia and Indonesia as part of the Belt and Road Initiative.

shijing@chinadaily.com.cn

(China Daily European Weekly 06/09/2017 page26)