Dalian Wanda Group, the largest mall owner in China, posted a 10.8 percent decline in revenue for 2017 — making it the second year in a row the retailer reported a drop.
Wanda explained its performance of only about $35 billion in revenue as being due to selling off its cultural and tourism holdings, reported the Wall Street Journal. The company’s cultural assets account for 28 percent of its overall revenue, or nearly $11 billion.
Analysts say Wanda’s retail portfolio is not the cause of its reported revenue decline.
“Wanda is doing quite well in its shopping malls, from their rental-income growth and high occupancy rate,” S&P Global Ratings’ Dennis Lee told the Journal. Income derived from rents increased 30 percent this year for the company.
In its report, Wanda also noted for the first time that 93 percent of its holdings are located in China. The information — never previously disclosed, according to the Journal — may be in response to the pressure the company faced last year amid the Chinese government’s crackdown on capital outflows to sell off its overseas real estate and other holdings.
Last fall, Wanda was selling five foreign developments, including One Beverly Hills, a $1.2 billion condo and hotel project, while in July it sold of $9.4 billion worth of its hotel portfolio.
In 2016, Wanda’s decline in revenue was explained by a drop in residential markets.