Chinese developer to revamp London docks for Asian firms

Wed May 29, 2013 11:45am EDT
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By Brenda Goh

LONDON (Reuters) - A Chinese developer has signed a deal to convert a derelict plot of land next to London's City Airport into the British capital's third financial district aimed at Chinese firms and worth an expected $1.5 billion when completed.

The 35-acre site at the Royal Albert Dock, industrial land currently strewn with empty warehouses and unused docks, will be redeveloped by Advanced Business Park (ABP) and British developer Stanhope into a 3.2 million square feet complex of offices, homes and shops that will house mainly Chinese firms.

"Creating a third financial district in the capital, this development will act as a beacon for eastern investors looking west, bringing with it tens of thousands of jobs and billions of pounds of investment for the UK economy," London Mayor Boris Johnson said at an event where the deal was signed.

The scheme is the first project outside China for ABP, which has built a 15 million square feet business park in south west Beijing and is building two others in the coastal city of Qingdao and Shenyang in north-east China.

It is targeting Chinese and Asian businesses looking to set up in Europe, believing this will provide a strong source of demand at a time when many European and U.S. firms are shelving office moves against a shaky economic backdrop.

The company will develop the site in five phases at a cost that was not disclosed. It will build a minimum of 600,000 square feet in the first phase and will receive the freehold once the complex is completed by 2021/22.

ABP has yet to sign up tenants for the scheme but has seen strong interest from Chinese firms looking to take space, ABP's Chairman Xu Weiping told Reuters. It hopes to sell 70 percent of the space to Asian firms, as Chinese companies prefer to own rather than rent their offices, he said.

The Royal Albert Dock, which opened in 1880, was once Britain's largest and is one of three docks in east London which the mayor has pegged for regeneration.   Continued...

Land surrounding the Royal Albert Dock is seen in east London May 29, 2013. Chinese developer Advanced Business Parks (ABP) has signed a deal to develop a derelict plot of land next to London's City Airport to build the city's third financial district which will be worth 1 billion pounds ($1.5 billion) when completed. REUTERS/Luke MacGregor