When ABP was chosen four years ago to develop London’s Royal Albert Dock, E16, the 35-acre site was described as a new “gateway to Europe” for Chinese business. Now, with the UK preparing to leave the EU, it has been hailed as “a new model project of UK Chinese win-win co-operation”.
At today’s ceremony to mark the start of construction of 3.5m sq ft of offices at the site, ABP chairman Xu Weiping said he was not concerned about the impact of Brexit on the scheme, which aims to attract a cluster of new Chinese business occupiers to the UK.
“Although there is Brexit, I think Britain is now more independent, more mature and it also shows more confidence in the British economy,” he said. “So I think there will be more co-operation between China and the UK.”
He also shrugged off the Bank of England’s warning yesterday in its financial stability report that the UK commercial property market was “vulnerable to repricing” and said low interest rates implied that rental growth forecasts were weak.
He said: “It is no surprise that prices for commercial property in the UK are a little bit higher, especially in London’s central areas; I think this actually means there is not enough office space in central London.
“If there is enough space then prices would not be that high. I also think that, for the ABP project, we actually don’t have enough offices located in this area specifically… We are not very close to central London, but we have good transport connections and also a very good environment and ecosystem.”
International trade minister Greg Hands also dismissed concerns about uncertainty in the sector amid Brexit negotiations. Asked whether the government would consider cutting the sector’s taxes, which are among the highest for real estate in Europe, he told EG: “I think the UK real estate industry is in good shape at the moment, as you can see from the amount of development that’s going on… I live practically next door to the Earls Court development, which has got the world’s largest crane in. You can see a huge amount of construction going on across London and across the UK. I think it’s a real success story.”
Mayor of London Sadiq Khan used the ceremony to stress that London was “open for business”, “open to Asia” and “open to Europe”. He said he expected the site would become a “magnet for other Asian and European companies.” The Greater London Authority and Newham Council will launch a Royal Docks delivery team this summer to help attract further investment to the Royal Docks Enterprise Zone – London’s only enterprise zone – which allows occupiers to benefit from business rates relief.
During Chinese president Xi Jinping’s state visit to the UK in October 2015, he witnessed ABP, CITIC and SANY signing the agreement to deliver Royal Albert Dock and hailed a “golden era” of UK-China bilateral trade co-operation. That sentiment was echoed today.
China’s ambassador to the UK, Liu Xiaoming, said: “No doubt that the project was one of the earliest golden fruit in this golden era.” He added: “The strong momentum of China-UK relations remain unchanged.”
Landmark deal
Royal Albert Dock represents the first greenfield project undertaken by a Chinese company.
It is also the first large-scale project in Britain by a Chinese company with a mixed financing model, with development finance provided by five Chinese banks: CITIC Bank, Bank of China, Agricultural Bank of China, Industrial and Commercial Bank of China, and China Construction Bank Corporation. Equity is being provided by CITIC, Charoen Pokphand Group and Strawberry Star. Stanhope is acting as development manager.
The site is a few miles from the planned termination of a 7,500-mile road freight train route along the historic Silk Road from the city of Yiwu in China to Barking in east London. Known as the “Belt and Road Initiative”, the programme launched by the Chinese president in 2013 will see a cumulative investment of between $4tn and $8tn into projects and businesses along the Silk Road route and old maritime routes (the Belt) from the Chinese coast across Singapore and to the Mediterranean.
To send feedback, e-mail Louisa.Clarence-Smith@egi.co.uk or tweet @LouisaClarence or @estatesgazette
