Lotte Group has sold “Lotte World Adventure Shenyang” in China. It marks over seven years since construction was halted at the end of 2016 due to China’s retaliation over the deployment of the Terminal High Altitude Area Defense (THAAD) system. Lotte World Shenyang was envisioned as a large-scale project including a department store, a hotel, a theme park, a theater, offices, and residential facilities, creating a massive mixed-use complex.
Lotte Glory Properties Shenyang, in which Lotte Shopping and other Lotte affiliates invested, was revealed on April 25 to have signed a stock sales agreement with a Chinese company in December last year. The contract amount was decided not to be disclosed according to the agreement between the two companies. It is estimated in the industry to be around 450 billion won.
Lotte Glory Properties Shenyang originally planned to invest approximately 3 trillion won to construct a mixed-use complex with a total floor area of 1.45 million square meters by 2019. Construction began in 2014 with the completion of a department store, a theater, and an apartment, but halted at the end of 2016. This pause was due to China’s extensive retaliation after Lotte provided the Lotte Skyhill Golf Course in Seongju, North Gyeongsang Province, to the government as a THAAD site.
As the retaliation from China intensifies, Lotte had to either sell off or withdraw from most of its businesses in China. Local Chinese governments frequently closed stores citing fire safety inspections, while Chinese consumers boycotted Lotte products. Wholesale distributors refused to supply Lotte Mart. Some analysts suggest that Lotte’s cumulative investment in China is estimated to be around 10 trillion won but it failed to recover a third of it while exiting businesses.
With the sale of Lotte World Shenyang, Lotte now has only one major operation left in China, located in Chengdu. Chengdu is one-third the size of Lotte World Shenyang, but it is a project of a similar nature, featuring a mix of facilities such as a large market, a theater, and a shopping center. Lotte has halted construction on the remaining aspects of the project after selling approximately 1,400 apartment units and opening a department store, and is currently in the process of selling off those assets.
After withdrawing from China, Lotte is restructuring its overseas operations, focusing on Southeast Asia, including Vietnam and Indonesia. Lotte Mart currently operates 48 stores in Indonesia and 16 stores in Vietnam. Lotte Department Store expanded its presence in Southeast Asia by opening Lotte Shopping Avenue, a mall complex in Jakarta, Indonesia, in 2013, and subsequently increased its stores to four in Vietnam and Indonesia.
