China’s richest man Wang Jianlin has paid €265m (£213m) for an historic Madrid skyscraper, prompting speculation that a key district of the Spanish capital will now attract badly needed investment.
In a stock-exchange announcement the financial group Banco Santander confirmed it had sold the 384ft high Edificio España building to the Dalian Wanda Group, a property-and-entertainment conglomerate run by Chinese billionaire, Wang Jianlin. The deal is seen as a staggering loss for the bank which paid €389m (£314m) for the building just seven years ago.
The white and red brick tower of offices and apartments — completed in 1953 under the dictatorship of Franco — dominates one end of the Plaza de España square in western Madrid. It has stood empty since 2006, a symbol of the real estate collapse that plunged Spain into a double recession.
With 25 storeys, the Edificio España is Madrid’s 14th tallest building. The property company Metrovacesa, which owned the structure since its completion, offered it for sale in 2005 along with the neighbouring Torre de Madrid as part of a portfolio to help it finance its acquisition of French property developer, Gecina. After its 2007 acquisition by Santander the bank announced renovation plans, but these were abandoned when they became bogged down by the city’s endless round of permissions and approvals and the worsening financial crisis.
In recent months many foreign investors, including the Chinese, have scoured Europe in search of bargains on real-estate deals, closing the door on the financial crisis and calculating improved returns.
The possibility of a Chinese buy-out of the Edificio España building was first hinted at earlier this year by the president of the Madrid region, Ignacio González. Once the sale was concluded, he said: “The purchase of this iconic building will hopefully give an enormous boost to the neighbourhood. This is a neglected area of Madrid that has great potential for investment.”
Wang, formerly a senior member of China’s ruling Communist Party, was ranked the richest man in China and 26th richest in the world, with a reported personal wealth in excess of £8.3bn. In 2012 his company bought the American cinema chain AMC Entertainment. And last summer he announced plans to invest £700m in a London hotel development. The project, which has already been welcomed by the city’s mayor Boris Johnson, will be built on the banks of the Thames at Vauxhall, South London, as part of the Nine Elms regeneration.
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