Ever since Xu Weiping visited London in 2008, he contrived a potential project in the docks near River Thames just like the Canary Wharf. Who wouldn’t say no to this historic place? The Albert Dock, in East London, enclosed by City Airport, and River Thames is a hotspot with a myriad of economic opportunities.
Xu, not originally a property developer, embarked on the project Advanced Business Park Albert Dock in 2013. The 15 million square foot elegant business centre for technology firms in the purlieus of Beijing, Zhongguancun, now known as the Silicon Valley of Beijing, had put him in the limelight. The obscurity of ABP had wondered many about the winning of the Beijing assignment. It was opined that the success of his first project was influenced by the Chinese Government. With his ideal plan, he approached the British Government in 2013 to win the project of turning the derelict into the financial hub. Xu wanted to change the Albert Dock as the Asian Business Port for the prime attraction of Asian and Chinese investments.
The then-Mayor Boris was thrilled to be on board and signed a contract with Mr Xu in May 2013. In October, Xu escorted Mr Richard Blakeway, Deputy Mayor to the ABP Beijing Complex. As a representative to the £1.7 billion Docklands project, Blakeway toured around the complex to report on the incoming scheme. Bringing a little known Chinese developer with no international projects to East London created a concern. However, ABP’s confidence and experience in Beijing left no room for doubt, as they have hired talented and reliable British Developers and architects. Having the dock unused for several years, the mayor saw this an opportunity to develop East London, as it could evolve the economic activities and fetch in businesses and millions of jobs.
ABP acquired 35 acres of docklands to redevelop as a private property surpassing the competitive bid. The project is financed by five banks CITIC Bank, Bank of China, Agricultural Bank of China, Industrial and Commercial Bank of China, and China Construction Bank Corporation. Intended to replicate the Beijing complex at the Royal Albert Dock, Xu officially chose Citic Constructions as the primary contractor along with other UK contractors to deliver the project. The Greater London Authority allowed this 1.7 billion pounds worth project to be completed in 26 years, but Xu expected to finish it in 10 years scaled in six phases. The construction work started in 2015 and the first phase was ready to be occupied in the first half of 2019. Having designed the first phase for Asian and the UK occupiers, nearly 60 per cent were reserved with 66 per cent by the UK and 34 per cent by the Chinese companies. The first phase underway, Xu decided to begin Phase 2 in the second half of 2018.
Like a speed bump, geo-political tensions surrounding the Brexit, subdued investments in China and delayed rail infrastructure lined in. Since China largely invested through debt, the government encouraged investors to focus on revamping the domestic market by 2017. Xu entered into this billion-pound project to establish the ABP RAD as the channel to reach the European and Asian market, and so, he was not disinclined about the shrinking Chinese investments. Following the Sino-UK dispute over Hong Kong, the Brexit further stalled the lump sum deposits and settlements, as the uncertainty looming over the prolonged ambivalence challenged the investors’ decision. Besides, as transportation was inadequate, Crossrail was established to ensure frequent access to households and businesses. But, the government’s promise to open the Crossrail by 2018, is pushed to plausibly begin its operation in 2021. The pandemic outbreak led to deferment of already paid deposits and thus, putting the office requirements on hold. It also shocked the UK real estate witnessing no investments from China, the first time since 2011 owing to the capital tightening and the turmoil over banning Huawei Technologies Co. under the US pressure, further intensified the situation. The Xu’s ABP empire didn’t escape from this tailspin, as international investors questioned the sustainability of the UK market.
Xu, a meticulous thinker, had everything planned -- from the construction site to the property sale. He pictured selling the building complex for businesses, residential occupancy, social and recreational facilities. After examining the rental pricing in the city, Xu decided to offer at a lower price compared to Canary Wharf and Stratford London. as he analysed the entire economic and social conditions to set the rent based on the growing demand for office space and residence. Sam Crispin, the real-estate developer for the ABP Global Holdings Group, said in an interview that the real estate is slowing down in other developers in London. Given the economic and social conditions and the growing demand for office space and residence, the ABP is offering the property at 50 per cent cheaper than the West and Central London. The first phase comprised 21 buildings, of which only Advantech, a Taiwanese technology firm, has occupied the multiplex. Xu expressed that the crisis has halted the occupancy rate as many people showed interests in relocating to this place and, thus, leaving 50 per cent of the office space empty.
Did Xu’s ideas go dry? No, Xu with the same spirit began his research on an alternative potential project. Since Xu’s ABP RAD development was a cluster of companies and residencies, Xu contributed months studying the future of workspace. Mr Xu said that Workspaces are perfect for people willing to go outside for office purposes and who need a rest from the dense population and he also said that workspaces are similar to a home away from home. Thinking of the pandemic and closely-packed buildings, Xu was assertive that the UK could buy in the situation of moving to a serene place. However, the success of the workspace project remains up in the air as the ABP has been unoccupied since last year.
ABP’s strategy was to lure the Asian and Chinese investors to this hotspot to pour in thousands of pounds. That could improve future trade and economic relations between the UK and China, and thus widening the scope for opening the market to Europe and Asia. Nearly, China had made 15.5 billion FDI in the UK real estate sector for a period 2010-19. With the UK forbidding Huawei from its 5G expansion and the suspension of the extradition treaty with Hong Kong, discourages the Chinese investments in the UK. Hence, the fully-funded Chinese ABP RAD’s future is uncertain, testing Xu’s ambitious dream, as the project may no longer fascinate the investors.
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