The £1 billion project, which was announced in May, is being developed by ABP (China) Holdings Group Ltd with a view to becoming a gateway for far eastern business seeking to establish bases in Europe. ABP has now announced that they anticipate the project will be valued at more than double its build value by the time the first phase is completed in 2017 due to unprecedented interest and demand from Asian businesses to the capital. The project is designed in five phases and work on site is due to be completed in 2021/2022, by which time its value is set to increase further.
REVIVAL OF THE EAST
This scheme will be ABP’s first European project – they have a strong track record in delivering significant projects and transforming large areas in need of regeneration. This particular development is part of the Mayor of London’s commitment to regenerate the Docklands and is the latest in a string of investments in the area. The Mayor of London, Boris Johnson, pointed out that an estimated 20,000 jobs are to be created which would generate £23m in annual business rates and that, when complete, the development would be worth £6bn to the UK economy. He said, “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, continuing the re-invention of this once maligned part of the capital into a 21st century centre of trade and investment.”
ESCALATING DEMAND DRIVING UP VALUE
The scheme, announced in May 2013, will eventually house 3.2 million square feet of high quality office, retail and leisure space. The 14-hectare space is set to become the capital’s third business district behind City of London and Canary Wharf and interest from Asian businesses is continuing to soar. More than 10 investment banks and private-equity firms have approached ABP to offer funding since the announcement and at least 56 businesses have expressed an interest in purchasing a building.
ABP Chairman Weiping Xu told reporters in the U.K. embassy in Beijing that the target for the first phase of the project had been raised “to as many as 100 buildings from about 60.” According to Mr Xu, the building costs of the 400,000 square metre project will average at about 20,000 Yuan per square metre, but when developed, the site will be worth at least 40,000 Yuan to 50,000 Yuan per square metre.
According to London.gov.uk, Communities Secretary Eric Pickles said “This is a significant investment deal for London and will boost employment and growth in the capital. I am delighted that the benefits of Enterprise Zone status are attracting foreign investment to the country and strengthening our trade relations with major international players like China."
Mayor of Newham, Sir Robin Wales, said: “We welcome ABP’s ambitious vision for the Docks which are already home to London City Airport, the University of East London, the Siemens Crystal and the Excel. ABP’s proposals will bring further investment from abroad and unlock future development. It will also create benefits for local people by providing thousands of new jobs and further enhancing the waterfront for people to enjoy.”
A number of consultants have been appointed on the billion-pound development. According to building.co.uk, “AKT II has been appointed structural engineer, Hilson Moran mechanical engineer and energy consultant, and WT Partnership quantity surveyor. CBRE will be planning consultant, Pinsent Masons will act as Lawyer and URS will be the environmental impact assessor.”
Once completed, the Royal Albert Docks will have some of the best transport links in the capital; the area will soon be directly accessible from west and central London via the new Crossrail station which is set to open in 2018.