Lotte gets approval for Chengdu property project as tensions ease

Updated 2017-11-07 10:35:08 Global Times/Agencies

Lotte Corp said on Monday that a major property development in China had received approval from local authorities to start a second phase of construction - the latest sign that tension between China and South Korea is easing.

The announcement comes one week after an unexpected detente between the two countries, which have been at odds over the deployment of the U.S. Terminal High Altitude Area Defense (THAAD) missile system in South Korea. And Lotte has been among the hardest hit by the political tension.

A Lotte spokesman said the approval to build commercial complexes at its 66,000-square-meter site in Chengdu, capital of Southwest China's Sichuan Province, worth some 1 trillion won (9 million), came on October 31, the same day that the two countries announced they had agreed to mend ties.

"Investors are hoping that from 2017 earnings will improve drastically as relations between South Korea and China get better and Chengdu is one piece of news that is adding to that," said Joo Young-hun, an analyst at Eugene Investment & Securities.

But construction at Lotte's project in Shenyang, capital of Northeast China's Liaoning Province, which covers 1.45 million square meters, remains suspended, said the spokesman for Lotte Corp, the conglomerate's holding company.

Construction has been halted since a December inspection for fire hazards. Lotte plans to build apartments and a theme park at the Shenyang project in addition to a department store and a movie theater that are already open.

Lotte's retail outlets have been particularly hurt by the political tension with most of its supermarkets in China shut down. They are set to be sold for a fraction of what it invested.

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