London Mayor Boris Johnson sealed a 1.5 billion USD deal with a Chinese property developer to turn a historic London dock into a 21st-century “Asian business port”: the Royal Albert Dock is set to become London’s third business district.
The deal is believed to be worth $9bn to the UK economy, generating $35 million in business rates annually and acting as a catalyst for further development in the area, strengthening trade between east and west, providing new local jobs and delivering benefits for the wider London and UK economy.
The scheme, which will see Advanced Business Park (APB) create a 3.5m sq ft office complex at the Royal Albert Dock, is the London mayor’s biggest commercial property deal and one of China’s largest investments in the UK.
“For centuries the waterways of east London were the throbbing arteries of UK trade and commerce. This deal symbolises the revival of that great era.”
No tenants have yet signed up for the scheme, the developer’s first outside mainland China, but ABP is targeting Chinese and other Asian banks seeking access to London’s international markets. Visiting representatives from 20 Chinese banks attended a signing ceremony at City Hall before visiting the site.
Royal Albert Dock set to become London’s third business district
Mr Xu Weiping, ABP chairman, said the developer had received expressions of interest from potential occupants. He added that he was “confident that there are UK and European businesses that will be attracted by the concept too, either to provide services to the Asian businesses, or to expand their own reach into Asia”.
Under the plans by architects Terry Farrell and Partners most of the space is to be occupied by offices, with 10 per cent residential accommodation and some retailers and restaurants. Carried out over 10 years in four phases, the project’s first phase will develop 600,000 sq ft of offices and homes. It is aimed for completion in 2017.
Property developers have voiced doubts that ABP would be able to make money on the scheme, calculating that exorbitant rents would be needed to justify the £1bn investment.
But ABP will adopt an unusual model by the standards of the London commercial market, selling leases of up to 175 years on about half of the scheme, rather than renting it out. Its UK partner on the project is Stanhope, the developer.
One of the first direct investment by a Chinese developer in London’s property market
ABP wants the complex to run as a 24-hour mini-city to accommodate the needs of Asian businesses focused on Beijing time, which is eight hours ahead of London. Part of the appeal is its proximity to London City Airport, giving access to Europe, and Crossrail, for rapid transit to the City and Heathrow airport.
The announcement will nourish hopes of a revival of the Royal Docks, which fell into dereliction after the decline of London’s docklands industry in the 1960s. Notting Hill Housing, a housing association, is planning a 1,500-home development in the Royal Docks, while the Greater London Authority has released land for a cluster of five new hotels near the ExCeL conference centre.
“The area is now probably undergoing one of the exciting regenerations in the developed world and this site is one of the few that has the scale to allow ABP to realise its vision,” said Mr Xu.
Richard Blakeway, deputy mayor for housing, said: “Across the docks there is a real momentum for regeneration.” The GLA said the ABP development would create 20,000 jobs, and generate £23m annually in business rates.
As a guarantee of the project’s completion, the GLA will sell ABP a leasehold on the site initially, converting to a freehold when the development is concluded.
The site is the largest commercial sell-off for the mayor since he took responsibility for the GLA’s land holdings in April 2012.Adapted from:
- Ft.com – Boris Johnson to seal £1bn docks deal with Chinese developer
- London24.com – Royal Albert Dock set to become London’s third business district under £1bn deal
- India concerned by China’s management of Pakistan port (chinadailymail.com)
- £1bn mini-city at Royal Albert Docks will be ‘gateway’ for tiger businesses from Asia (standard.co.uk)
- Royal Albert Dock set to become London’s third business district under £1bn deal (london24.com)
- Chinese plan £1bn London dock revival (thetimes.co.uk)
- Evening Standard Comment: The Chinese rescue the Albert Dock (standard.co.uk)
- Chinese business hub plans for docks (bbc.co.uk)
- Chinese group plans £1-billion London docks project (theglobeandmail.com)
- Mayor unveils plan for $1.5bn Chinese business district in London (telegraph.co.uk)
- VIDEO: Latest Business News: Chinese Developer to Revamp London Docks for Asian Firms (marketcurator.com)
- Cycling the Greenway – Stratford to Royal Docks (emmastevensonblog.wordpress.com)