Dalian Wanda Group announced plans to build a large tourism project in Lanzhou, capital of Northwest China's Gansu Province - its first venture in the sector - after it signed deals in July to sell 13 cultural tourism projects to Sunac China Holdings.
On Friday, Chairman Wang Jianlin went to Lanzhou to meet with Lin Duo, secretary of the Communist Party of China Gansu Provincial Committee and Governor Tang Renjian, according to a statement posted on the website of Wanda on Sunday. No investment figure was announced.
Wang said that Wanda will increase its investment in Gansu, according to the statement.
Wang noted that the company will build a large tourism project in Lanzhou, as well as 10 projects in other cities in Gansu, according to a report by the Gansu Daily on Friday. Wanda has invested in several projects in the province.
Wanda didn't provide detailed information of the planned investment in Lanzhou when reached by the Global Times on Monday.
Since Wanda signed deals with Guangzhou-based R&F Properties and Tianjin-based Sunac China on July 19 to sell cultural and tourism projects and hotel assets, market speculation has emerged over Wanda's sustainability, profitability and strategy.
Wanda's latest move shows that "it is still operating soundly," Song Ding, director of the tourism and real estate research center at the Shenzhen-based China Development Institute, told the Global Times on Monday. "The planned investment in Gansu is a signal that Wanda is still seeking opportunities in cultural and tourism projects."
Wanda probably will introduce more partners to invest in the project, as the company has stressed that it is embracing an "asset-light strategy," noted Song. "I don't think the company will invest a lot of money alone."
Xue Jianxiong, president of Shanghai-based asset management firm UTC, agreed.
After Wanda completes negotiations with the local governments via its brand prestige, the company will introduce more partners to invest into different businesses such as the hotel and property sectors, Xue told the Global Times on Monday.
Investors need to pay attention to local consumption power, said Xue, noting that the market will be saturated if too many similar tourism projects are under development.
Some local governments have concerns that some tourism projects will not be built as planned, after Wanda sold its tourism projects to Sunac China, according to a report by financial news site caixin.com on Sunday.
The government of Ji'nan, capital of East China's Shandong Province, suspended a land transfer deal with Wanda, the report said. On July 22, Wang, chairman of Wanda, went to Ji'nan to negotiate with the local government and agreed to sign supplementary agreements adding with some penalties if the tourism projects don't meet the requirements of the local government.
