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China's Dalian Wanda to build hotels overseas

Wanda Chairman Wang Jianlin

Chinese property conglomerate Dalian Wanda Group plans to expand its luxury real-estate and hotel business overseas, as it builds the world's first Chinese luxury hotel outside of China's mainland to cater to the country's booming outbound travel market.

Wanda said it plans a luxury hotel and development in London with a total investment value of £700 million ($1.09 billion). It will build luxury apartments and a luxury hotel in London, it said.

At a press conference Wednesday, Wanda Chairman Wang Jianlin said that Wanda will announce a luxury hotel project in New York later this year. The company plans to build luxury hotels with the Wanda brand in eight to 10 major cities around the world in the next decade, he said.

The Chinese company is making a play for Chinese citizens who are interested in buying overseas homes. Looking for overseas investments, Chinese citizens have become significant property buyers in the overseas market, snapping up real estate globally and particularly in North America and Europe as local buyers have retreated.

Wanda's announcement also comes as China's outbound travelers have become a critical growth market for global tourism and the global hotel industry. China's spending on outbound travel swelled to $102 billion last year, a 40% jump from 2011. That sent China surging past Germany and the U.S.— the former No. 1 and No. 2 spenders, respectively—which both saw tourist outlays increase 6% year on year to around $84 billion in 2012, according to the United Nations World Tourism Organization.

Dalian Wanda has been building its overseas presence. Last year, it bought U.S. cinema chain AMC Entertainment Holdings Inc. for $2.6 billion and recently announced a bid for British yacht maker Sunskeeker International Ltd. Within China, Wanda already runs a chain of five-star hotels and has partnerships with hotel groups such as France's Accor SA, Hilton Worldwide Inc. and Starwood Hotels & Resorts Worldwide Inc. of the U.S.

Wanda also operates about 60 department stores and aims to become the world's largest retailer by 2015 in terms of area, reaching 25 million square meters (269 million square feet), compared with 12.9 million square meters last year.

Other Asian hotel operators are also expanding their footprints overseas. India's conglomerate Tata Group bid $1.86 billion last year for Orient-Express Hotels Ltd., which owns luxury hotel the Pierre in New York and Hotel Cipriani in Venice. Sahara India Pariwar Ltd., which bought London's high-profile Grosvenor House hotel in 2010, agreed to buy a majority stake in New York's Plaza Hotel last year for $570 million. 


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