South Korea’s Lotte Group is expected to sell off a mixed-use town that was under development in Shenyang, China, where construction has been halted for years as it seeks to exit the country.

According to industry sources on Thursday, Lotte Group signed an agreement late last year with a Chinese company located in Huanggu, Shenyang, for the sale of the mixed-use town.

The sale price and final payment date have not yet been confirmed.

Lotte Group has been pursuing the Shenyang mixed-use town project since 2008, aiming to build a Lotte Town equipped with a department store, theme park, apartment, and hotel buildings.

Although some facilities were opened in May 2014, with plans for full completion by 2019, construction was halted in December 2016 due to China’s retaliatory measures against Korea’s deployment of THAAD.

While Chinese authorities permitted the resumption of construction in April 2019, Lotte decided to suspend operations and shift towards selling off the project amid the outbreak of Covid-19.

Lotte Department Store in Shenyang, which opened its doors in May 2014, closed down in April 2020 after six years of operation.

Lotte had also explored transferring the mixed-use town to a Chinese state-owned enterprise in early 2020, but the deal did not materialize.

Lotte Group has expanded its presence in China through Lotte Shopping.

Since entering China in 1994, Lotte Shopping invested over 10 trillion won ($7.5 billion), expanding its business with department stores and large-scale supermarkets.

In 2008, Lotte Shopping acquired eight Macro stores in China and purchased the large supermarket chain TIMES in 2009.

However, due to difficulties arising from China’s retaliatory measures against THAAD, Lotte SHopping faced challenges in its operations.

In 2018, Lotte Shopping sold off all of its Lotte Mart stores in China. In March 2019, the company withdrew from the food manufacturing industry in China.

Currently, only one Lotte Department Store remains in Cheongdu, which has also entered the stage of withdrawing after deciding to sell its stake in August 2022.

By Park Chang-young and Minu Kim

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