A redevelopment contract with a Chinese property developer worth one billion pounds has been terminated by the Greater London Authority after years of inactivity.
Advanced Business Parks (ABP) was awarded the contract in 2013, to redevelop the Royal Docks – London’s only Enterprise Zone. The scheme aimed to turn the area into a “financial and business sector rival” to Canary Wharf, with a first phase designed to provide a hub for the European headquarters of Chinese companies.
The contract was initially awarded after two construction companies based in the UK withdrew from the bidding process. ABP was little known at the time, and critics have accused the company of receiving favourable treatment when it became known that it shared offices in Beijing with London & Partners – the Mayor of London’s overseas promotion agency.
ABP promised a quick build, with assurances that Chinese firms would become anchor tenants at the development. The developer has since completed 21 retail and office blocks, but the project ground to a halt in 2019 and so far only 10% of the buildings are occupied. The new road that runs through the development, Mandarin Street, is all but deserted.
Those who have invested in businesses in the area, some having taken advantage of the tax breaks and other business incentives on offer, have been left hugely disappointed by the lack of progress. Some early tenants, such as Siemens and Advanteq, received deals on rent and charges for services.
The company has blamed its failure on the impact of the pandemic, together with restrictions placed on overseas investment by the Chinese government.
ABP’s chairman, Xu Weiping, lives in North London, and has previously commented that he hoped to bring the project back on track. One of his ambitions was to turn the unused office space into ‘mini pods’, which could be used by people to work and sleep. However, the design of the development has been deemed ‘poor’, focusing on sterile office space with no mixed community space that would benefit local people.
The Greater London Authority is now left to make improvements to the space already built – which will be much harder than building a good quality development in the first place.
The five further phases of the development will be awarded to a different developer.