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Despite London often feeling at capacity both in terms of population and office space, a Chinese company has spotted potential for development with a very particular kind of occupier in mind: Chinese businesses and financial firms. The area earmarked by ABP (Advanced Business Park) for the 3.2-million-square-foot complex is an unused plot of 35 acres next to London City Airport. Currently known as Royal Albert Dock, the site is empty and once developed will house offices, shops and homes – all aimed at the Chinese business community, and expected to be worth $1.5 billion after completion.
ABP has not developed outside China before, its previous sites being business parks either completed or in development in Beijing, Qingdao and Shenyang. The company clearly anticipates a huge and specific requirement from the Asian market in the years to come, as the Chinese and similar economies continue to rise. While there is already vacant office space in London’s financial districts – up to almost 10% in some areas such as Docklands – ABP considers a dedicated district for Chinese companies the best investment given the likely future influx into London of investment from Asia.
ABP will be working with British developer Stanhope on the Royal Albert Dock project and the site will be built in five phases. At least 600,000 square feet will be constructed in the first phase and it is anticipated that the complex will be completed by 2021/22.
Tom Lax, of Morgan Pryce, comments, “An ambitious development such as this could change the face of the property market in the capital. It will be interesting to see what impact a third financial district in London will have on the other sites such as Canary Wharf and the City. It will, in any event, bring more jobs and investment.”
Transport links to the site at Royal Albert Dock look set to improve by the time it is completed, with Crossrail providing increased access when it is due to open in 2018. Presently the site is served by a light railway.
Tenants have not yet been announced, although ABP’s Chairman Xu Weiping told Reuters that much interest has been shown by Chinese companies. He also indicated that as Chinese companies prefer to sell rather than rent property, around 70% of the space is likely to be sold.
Morgan Pryce is a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.