Wanda’s $1.2bn Hollywood dream becomes reality

Corporate China has already bought the cinemas and financed the films. Now it is moving into the heart of movieland by buying up one of Los Angeles’ most sought-after locations.

Wanda, the Dalian-based owner of US cinema chain AMC and China’s biggest commercial developer by sales, said on Friday it had won the battle for a plot of land at 9900 Wilshire Boulevard in Beverly Hills.

It plans to invest $1.2bn to build a mixed-use development, which will include luxury apartments and office space targeting the entertainment industry.

“The Los Angeles project is expected to aid in China’s entry into Hollywood’s film industry and generally promote Chinese culture abroad,” Wanda said.

The company said it hoped the LA project would help it to “leverage on Hollywood’s solid film industry” to support its own studio project in the northeastern Chinese city of Qingdao, which was launched last year with investment of more than $8bn.

Wanda bought AMC, the largest chain of cinemas in the US, two years ago in a $2.6bn deal.

Wanda’s newly-acquired plot is in a prime spot – overlooking the Beverly Hills golf course, close to the Beverly Hilton and Peninsula hotels and a 10-minute walk to the exclusive shopping strip that is Rodeo Drive. Other nearby attractions include the UCLA campus, the Los Angeles Country Club and the Playboy Mansion.

The deal marks the intersection of two major cross-border trends – the march overseas of China’s real estate companies, and the growing ties between the Chinese and US film industries.

China is now the world’s second largest box office market, making it a vital source of revenue for Hollywood’s film industry. The country is adding new screens at a rate of 10-13 a day, and is expected to overtake the US market by 2020.

That has driven investment in both directions. US studios have launched a number of China-centric productions such as Iron Man 3 and Transformers: Age of Extinction, and set up joint ventures with local film companies. Chinese actors, advertisers and locations are becoming more prominent in English language films.

Alibaba, the ecommerce company, recently teamed up with Lions Gate Entertainment to offer subscription TV to Chinese customers.

Meanwhile, Chinese property developers have increasingly looked abroad for growth as the domestic property market has matured and slowed. Over the past few years, they have made billions of dollars of investments in cities around the world – from London to Sydney and San Francisco.

Chinese investment into overseas real estate rose 17 per cent in the first half of this year to reach $5.4bn, according to figures from JLL.

Work began earlier this year on The Metropolis, a $1bn office tower in downtown LA being built by Shanghai-based Greenland, the company also leading the multibillion-dollar regeneration project of Brooklyn’s Atlantic Yards.

Developers have also tried to tap into demand for property from Chinese citizens moving, working or investing overseas. Vanke, China’s top residential builder by sales, has started construction of two luxury housing blocks in San Francisco.