Chinese developer of London's Royal Albert Dock seeks overseas funding
Advanced Business Park (ABP), a private Chinese developer, wants overseas funding for its £1 billion (HK$12.2 billion) project that will transform east London's Royal Albert Dock into an Asia business port.
The company has signed a deal with the mayor of London, Boris Johnson, to develop the 14-hectare port that was closed to commercial traffic in the 1980s.
Xu Weiping, the chairman of ABP, said the project would be divided into five phases, each of which would require an investment of £200 million to £300 million.
Internal capital would account for 30 per cent of the investment and 30 per cent would come from the rent and sales revenue of the project, Xu said.
The company will consider loans from European banks, bond issuance, funds from private equity firms and equity financing to assemble the remaining capital.
"We intend to raise the remaining funds overseas," Xu said, adding that financing in overseas markets was "more transparent and can be on a larger scale".
ABP's capital strength has been questioned in the past because it has completed only one project.
"Our company has 14.9 billion yuan (HK$18.9 billion) in net assets and about 6 billion yuan in debt. Our gearing ratio is low," he said, adding that the company would sell assets if necessary.
Xu said he hoped to develop Royal Albert Dock into the third financial centre of London, after the City and Canary Wharf.
The project, which will have 3.2 million square feet of office and retail space, would attract Chinese and Asian companies that were looking to expand into Europe, he said.
Fifty-six companies, mostly from China, have shown interest in leasing space. London will offer tax incentives to companies setting up offices at the site, Xu said.
The first phase, on which construction will begin in the second half of next year, will include 80 to 100 buildings sized between 6,500 and 32,300 square feet.
Xu said 60 to 70 per cent of the area would be offered for sale and the rest for rent.
The development of Royal Albert Dock would create 20,000 jobs in the area, said Sebastian Wood, Britain's ambassador to China. The Asia business port would be the first financial centre with Asian features, he added.
ABP was established in 2003.