China’s property and entertainment giant Dalian Wanda has reportedly agreed to sell a landmark Madrid tower to Spanish investment group Baraka, after failing the obtain approval for its plans to renovate the building and operate it as a luxury hotel, condominium residences and shopping complex.

The Edificio España previously housed a Crowne Plaza Hotel, a shopping center, apartments, offices, and a rooftop pool.

Baraka, a holding company owned by Spanish distressed real estate investor Trinitario Casanova, is said to have made an offer for the 63-year-old building above the €265 million Wanda paid in 2014. The term Baraka or Berakha is an Arab and Hebrew expression evoking a blessing.

According to Spanish media, Casanova has been granted exclusive rights to acquire the property upon making a firm offer backed by a typical good faith deposit, and is now conducting due diligence. The deal is expected to be finalized after the summer. The incoming developer plans to renovate the building and also turn it into a luxury hotel, condominium residences and shopping complex, but would preserve its historic façade.

Property consultants JLL (NYSE: JLL) represented Wanda in the sale of the building.

The move will see the Chinese company exit the Spanish real estate market, says South China Morning Post. “If it fails, we would sell the building and never invest again,” Wang told China Central Television in May, while negotiations with the new mayor of Madrid were ongoing.

Dalian Wanda has now shifted its investment focus to France. In February, Wanda teamed up with French retail giant Auchan Group and planned to jointly invest more than €3 billion in EuropaCity, a retail and leisure project to be built on the outskirts of Paris by 2024, the Post said. The 760,000 square meter project would be the largest single investment project in Europe to-date, featuring an indoor and outdoor theme park, a large stage show, hotels, a business center and a conference center.

Plaza de España is a large square, and popular tourist destination, located in central Madrid, Spain, at the western end of the Gran Vía. In the center of the plaza is a monument to Spanish novelist, poet and playwright Miguel de Cervantes Saavedra. The tower portion of the monument includes a stone sculpture of Cervantes, which overlooks bronze sculptures of Don Quixote and Sancho Panza.

Adjacent to the plaza are two of the tallest buildings in Madrid, Torre de Madrid, built in 1957, and Edificio España, built in 1953.

The Edificio España, designed by architect Julián Otamendi and his brother, is the 14th tallest building in Madrid, and one of the city’s most iconic buildings. It is an example of 20th-century Spanish architecture built in the neo-baroque style, and was a symbol of prosperity during the dictatorship of General Francisco Franco. It was the tallest building in Spain and Europe, with 25 floors and a height of 117 m (384 ft), until overtaken by the Torre de Madrid (also built by Otamendi) in 1957.

“I fell in love with the Edificio España on my first trip to Madrid. It has always struck me as a sentinel barricaded before the city,” once wrote journalist and novelist Juan Soto Ivars, for El Confidencial. “The whole history of this building has been tracing the history of Spain. It was built as a final signature to the Gran Via, a pharaonic project that included three political regimes and a war. It would house a luxury hotel for international dignitaries becoming the icon of the end of the autarky. Its Crowne Plaza Hotel gave shelter to all kinds of characters worthy of a spy movie.”

Wanda acquired the Edificio España in June 2014 for 265 million euros (now $292 million) and wanted to turn it into a hotel and shopping center. The building stood empty since 2006 — a symbol of the 2008 real estate collapse that thrust Spain into a damaging economic crisis, Agence France-Presse reported.

The group had reportedly planned to knock down the façade, re-model the interior and build it again with the same materials. But Madrid’s town hall insisted that the original façades of the historic landmark building be preserved, eventually prompting Wanda to get rid of the skyscraper.

Dalian Wanda Group was founded in 1988 and is engaged in three key business activities – commercial properties, culture, and finance. In 2015, its assets amounted to 634 billion yuan with revenue of 290.16 billion yuan. Wanda Commercial Properties is the world’s largest real estate enterprise and the biggest five-star hotel owner in the world. Wanda Cultural Industry Group, meanwhile, is the largest cultural enterprise in China, and the world’s largest cinema operator. It is also the world’s biggest sports company. Elsewhere, Wanda Financial Group is the largest internet finance enterprise in China. By 2020, Wanda Group aims to become a world class multinational corporation with assets of $200 billion, market capitalization of $200 billion, revenue of $100 billion and net profits of $10 billion.

Wanda’s chairman Wang Jianlin, with a fortune worth $32.7 billion, is the first mainland Chinese billionaire ranked within the Top 20 of Forbes Billionaires List. Wang, who hails from a poor background in inland Sichuan Province, is also said to be Asia’s richest man.

Wanda has been on a high-profile overseas acquisition spree in recent years, such as the $3.5-billion purchase of Hollywood studio Legendary Entertainment in January.

The group has also bought the organizer of Ironman extreme endurance contests, Swiss sports marketing group Infront, and a stake in Spanish football club Atletico Madrid, which reached the Champions League final this year. It burst into the international spotlight in 2012 by buying US cinema chain AMC Entertainment for $2.6 billion.

Wang’s group also owns more than 200 malls, shopping complexes and luxury hotels across China. However, the company said it is transiting from a real estate company to a “global sports, entertainment and tourism giant.”

Last week, Dalian Wanda‘s AMC Entertainment (NYSE: AMC), agreed to acquire London-based Odeon & UCI Cinemas Group, the largest theatre exhibitor in Europe, from private equity firm Terra Firma, in a deal valued at £921 million.



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