London dreams of being an offshore center for yuan trading as the Chinese currency edges towards convertibility. Just down the road from London’s traditional financial centre, the City, and even closer to its newer version, Canary Wharf in London’s Docklands, Chinese money and a U.K. developer are planning to build a business park to house Chinese firms. London’s mayor, Boris Johnson, is already rather grandly billing it as London’s third financial center. A new Chinatown more like.
The £1 billion ($1.5 billion) redevelopment of a derelict 14-hectare site at the old Royal Albert Dock in east London is said to be the biggest Chinese commercial real estate investment in the U.K. to date. Xu Weiping’s brownfield sites real estate company, Advanced Business Park (ABP), is putting up 30% of the development’s £1 billion ($1.5 billion) price tag, with at least as much coming from private equity and bank loans and the remainder from pre-sales.
The complex of offices, homes and shops — ABP sees it as a city within a city — will be built in three to five phases over 10 years, starting with 56,000 square metres of office space planned to be available from 2017. Chinese banks are likely first occupants. ABP is building similar and larger projects in Beijing, Shenyang and Qingdao.
U.K. firm Stanhope will be the development manager on the London project. The master-planner will be Terry Farrell, the U.K architects that designed Kowloon Station and Peak Tower in Hong Kong and the new Guangzhou Station; it is also working on the Z-15 project which will include the tallest building in Beijing.
That offers some hope of a project of some grandeur for a site that needs regeneration. The Royal Albert stopped being a working dock in the 1980s. It is now mainly used for rowing and other water-sports, though London’s City Airport sites on its southern side. Passengers might not realize it, but the Royal Albert’s old dry dock is under the runway.
Advanced Business Park will lease the site from the Greater London Authority until the development is completed, at which point it will acquire the freehold. It just might be that the yuan becomes fully convertible around the same time.