Is it seven years’ bad luck for ABP at Royal Albert Dock?
A fresh round of challenges has once again called the future of the ABP Business Park at the Royal Docks into question.
The chilling of relations between China and the UK, and the impact of Covid-19 lockdown is the culmination of seven years of bad luck for the scheme, rebranded RAD.
It was in 2013 that the 35-acre site was pinpointed as a gateway hub for emerging Asian business. But from the outset it has been dogged by questions over its potential to deliver.
The London Assembly probed the nature of its tender while the press has been nosing around its flamboyant mastermind Xu Weiping, questioning his track record.
Meanwhile, the UK left the European Union – a key reason for the park to exist – and the Crossrail line links to the Royal Docks to the City and Heathrow airport has been an embarrassment.
In the last year, events on a global scale have ramped up the woes.
The litany of conflicts includes:
- Increased tensions between the UK and China over Huawei, 5G and cyber security
- The UK’s anger over China’s action in the former colony of Hong Kong
- The chilling of investment activity.
- And the Covid-19 lockdown which has not only emptied out London but brought into question some of the fundamentals of the capital as a desirable place to work.
Caught into the middle is this low-level business campus which – in theory – represented an epic revival of the north side of the Royal Albert Dock, delivering 460,000 sq ft of commercial space, 20,000 jobs and a new high street.
And while the buildings have grown to create an impressive vista, there is little sign that anyone is occupying the waterside office space.
The 21 buildings are empty but represent only the first phase of the £1.7 billion project funded by a conglomerate of Chinese banks.
It’s a far cry from five years ago when the Conservative Prime Minister David Cameron and the Mayor of London – one Boris Johnson – were courting Chinese president Xi Jinping and showcasing the potential of the capital’s only enterprise zone, just to the east of Canary Wharf.
Behind the scheme was controversial property developer Xu Weiping who sold his colourful vision of the Royal Docks as a beach-head for Chinese companies looking to build a presence inside the EU.
The UK could put the growing Chinese manufacturers in touch with a marketplace of half a billion potential consumers – with easy financing on the doorstep in the City.
Now, it seems, with the latest twist of events, the vision is fading.
Mr Weiping has told Bloomberg, “All these geopolitical changes have brought uncertainty which affective the mindset of Chinese and Asian investors.
“Some of them already paid deposits but because of those changes they had a change of heart. Therefore the tension between China and UNK definitely brought risks to our project here.”
According to CBRE Group, China spent £4.3billion on UK property in 2017. So far this year the country has spent a tiny fraction of that sum (which includes the purchase of Morgan Stanley’s HQ). Meanwhile TikTok is thinking again about opening an HQ in London – but only to signal its distance from the Chinese authorities.
Much was made of the idea of a “second Canary Wharf” and/or a “third financial district” neighbouring London City Airport and close to the Crossrail line which – back in those days – was going to open in December 2018.
Crossrail saps confidence
The abject failure of the cross-city rail line removed the gloss from a capital basking in the afterglow of the successful delivery of the London 2012 Olympic Games. At that time, the UK was seen as a country that could get things done. A year later, Mayor Johnson was in Beijing signing up 10 more Chinese companies, taking the total at the time to 57.
Of the Crossrail debacle, Mr Weiping said, “This cast doubt on the stability of the investment environment in the UK and whether the government can keep its promises.”
The future of the ABP is now a cause for concern. The buildings have been ready to receive occupants for almost a year and everyone is waiting to see whether the rift between the UK and China is permanent. That verdict lies in the hands of President Xi.
In the meantime, Mr Weiping remains committed to the project. He is keen to turn a vice into a virtue.
With all this square footage of office space and no inhabitants, it has become, in the entrepreneur’s new vision, the ideal location for ultra-keen social distancers. Office workers can come to work, claim an individual section of their own, pursue their projects – without mixing recklessly with hundreds of other people.
Or perhaps seeing anyone at all.