Despite the UK’s vote to leave the EU and uncertainty from the European market, Asian investors are still showing faith in the UK market with the announcement today (10 November) of major agreements which will see Asian companies invest billions of pounds into London over the next five years.
As part of the agreements, major Chinese developer ABP has pledged to invest £1.7bn in the next eight years in its Royal Albert Dock project, which will be supported by its partners CITIC Group and Thai company Charoen Popkhand Group (CP Group).
Announced at the East London – China Investment Summit in front of more than 50 Asian business leaders who have travelled to London as part of the Chinese Vice Premier Ma Kai’s visit to the UK, this is a welcome boost to post Brexit confidence in the UK market.
The first funding in excess of £300m of the £1.7bn Royal Albert Dock project will facilitate the construction of the first (of up to six phases) of the project and will start in early 2017. The development will provide a base for Asian and European companies and boost trade links with international markets.
CITIC Bank has been joined by the four biggest commercial banks in China (Bank of China, Agricultural Bank of China, Industrial and Commercial Bank of China and China Construction Bank Corporation) with the desire to undertake ABP's overall funding requirement of £1.2bn of the £1.7bn. This will be their first entry into East London through the Royal Albert Dock project.
It is not just Chinese money flooding into the UK with part of the investment coming from Charoen Pokphand Group, one of the largest companies in Thailand, demonstrating the strong interest from other Asian nations to invest in the UK. CP group will hold 25% equity in a platform company – The East London Development Group – which has been newly established by ABP and CITIC. Through the Royal Albert Dock project the East London Development Group will invest in other infrastructure and housing projects in East London. The deal marks the start of an international partnership which could see billions of pounds of further future investment in the capital and Charoen Popkhand Group will be the third shareholder in the project following ABP and CITIC Group. This significant investment gives the strong signal to other investors that London is well and truly open for business.
The news follows an announcement from ABP and CITIC Construction, a subsidiary of CITIC Group, last year that will see the latter as the general contractor for the Royal Albert Dock regeneration.
This will be CITIC Constructions first UK project and the biggest real estate development delivered in the UK by a Chinese construction company.
Chairman of ABP, Mr Xu Weiping, said:
“These major investments are a vote of confidence to the UK and London market following the Brexit vote. ABP is delighted to be working alongside CITIC Group and Charoen Popkhand Group, two of Asia’s biggest enterprises, to deliver the Royal Albert Dock project.
“East London is fast becoming one of capital’s most exciting places to do business and we are pleased that other Asian companies have seen the potential and are also now investing in the area.”
Post Brexit confidence in UK market has been boosted by major Asian investment into London worth £500 million in commercial property acquisitions alone.
For more information on the transformation of Royal Albert Dock and the opportunities available, please visit http://abp-london.co.uk/
NOTES TO EDITORS:
ABP Royal Albert Dock
It was announced by the then Mayor of London Boris Johnson on 29 May 2013 that ABP (London) would lead the development of the 35-acre Royal Albert Dock site, as part of a deal, with UK partner Stanhope acting as development manager. ABP were chosen following a procurement process to identify a developer to develop out the site for employment focused uses.
It will cost £1.7bn to deliver and create 30,000 new jobs and bring £6bn to the local economy. The estimated gross development value of the development is over £3 billion.
The Hybrid planning application for up to 4.7m sq ft of floor-space with part submitted in outline and part submitted in detail received a resolution to grant consent at Newham Council’s Strategic Development Committee meeting on 23 July 2014, and was approved following no objections from the GLA or the Secretary of State in June 2015.
At the official sales launch of the project held in June 2015, more than 10 enterprises from the UK and Asia signed confirmation agreements to secure office space in the first phase of the 4.7 million sq ft development in advance of full construction work starting on site later this year.
It is planned to start full construction on site at Royal Albert Dock in early 2017 and the first phase of 1.2m sq ft will be finished by 2018. The entire scheme will now be completed within 8 - 10 years.
Royal Albert Dock is part of the Royal Docks - London’s only one Enterprise Zone which lies within the stretch of land running from Stratford down the River Lea to the Thames, an ‘arc of opportunity’ with £26 billion of development potential. It is home to ExCeL, the international exhibition and convention centre and London City Airport. The Mayors of London and the London Borough of Newham have set out a joint vision to develop the Royal Docks.
CITIC Construction Co., Ltd is a subsidiary of the CITIC Limited. CITIC Limited is China’s largest conglomerate operating domestically and overseas. With businesses in financial services, resources and energy, manufacturing, engineering contracting and real estate as well as others. CITIC’s rich history, diverse platform and strong corporate culture across all businesses, ensure that CITIC Limited is unrivalled in capturing opportunities arising from China’s continued growth. CITIC Limited is listed on the Stock Exchange of Hong Kong (SEHK:267) where it is a constituent of the Hang Seng Index. CITIC Group, a Chinese state owned enterprise, owns 58% of CITIC Limited. For more information about CITIC Limited, please visit the company website at www.citic.com.
Based on CITIC Limited’s full-service strength and international reputation, CITIC Construction is dedicated to providing full life-circle engineering package solutions, encompassing feasibility study, project approval and initiation and financing, construction, operation. CITIC Construction’s operation strategy is to win over engineering contracts with front-end services and financing solutions for clients, and prompt industrial development through engineering contracting work. CITIC Construction provides clients and local governments with a full package of comprehensive services throughout the whole project lifecycle. In 2015, CITIC Construction ranked 52th among the ENR Top 250 international contractors.
For further information, and photographs for media use, please contact:
Director of Global Communications
ABP (London) Investment Ltd
T: +44 (0) 203 8188 540