Chinese property and entertainment conglomerate Dalian Wanda Group has bought one of Madrid's highest towers from lender Banco Santander for around €265 mln, PropertyEU can reveal.

Chinese property and entertainment conglomerate Dalian Wanda Group has bought one of Madrid's highest towers from lender Banco Santander for around €265 mln, PropertyEU can reveal.

Located at Plaza de España, one of Madrid's main squares, the 117-metre high scheme was bought by Santander in 2005 for €389 mln from listed property firm Metrovacesa.

The 67,400 m2 building, which formerly housed a Crowne Plaza Hotel, a shopping centre, apartments, and offices, has since been vacant awaiting renovation into luxury residences.

Dalian Wanda Group plans to redevelop the 25-storey scheme into a shopping centre, luxury hotel and 300 luxury apartments according to a design by Norman Foster and Carlos Lamela.

The deal is the first in Spain by Dalian Wanda Group, a conglomerate run by China's richest man, Wang Jianlin. Last November, the group announced plans to invest £700 mln in the acquisition and redevelopment of the One Nine Elms mixed-use site in London's South Bank regeneration area.

The scheme will be used by Wanda for a five-star hotel, marking the first move overseas by Wanda’s luxury hotel brand as well as the first luxury hotel to be opened by a Chinese firm outside China.

A new wave of Asian investment is heading for Europe with a strong focus on development. In the past 12 months, Hong Kong-based hotel groups and Chinese residential developers in particular have moved into London, generally considered a gateway to the Continent. ‘The Chinese are very familiar with doing development, that is what they do best,’ commented Terence Tang, managing director of Colliers International in Singapore.

The capital flows follow hard on the heels of moves by a successive number of Asian governments to relax regulations and allow insurance companies to invest in real estate outside their own country. The institutional groundbreakers were followed by a second wave of high net worth individuals seeking higher risks and returns.