Seventy percent of China’s 2,500 amusement parks are losing money – but their investors aren’t crying.
Instead, they are betting on their adjacent commercial and residential developments, including apartments, villas and hotels, to make their profits.
It’s a relatively new game that about one-third of China’s top 100 property developers are now playing, reports China Daily.
The developers have entered the tourism real estate sector. Big players include industry giants Vanke and Wanda, according to China Venture Group, a research and consulting company.
Here’s how they play the game:
Unlike residential developments, the restrictions imposed by the government State Council to cool the “hot” property market do not apply to projects classified as cultural or for entertainment purposes. That loophole allows developers to buy land from the government often at a relatively low price to build a theme park and then erect adjoining apartments and hotels.