REDEVELOPMENT

Hong Kong billionaire Henry Cheng to build Britain's largest regeneration project Greenwich Peninsula

The development in London covers an area of 60.7 hectares and will contain up to 15,720 new homes, commercial space and hotels. It will also house London's newest film studio and boast 2.6km of public river frontage.

PUBLISHED : Wednesday, 16 September, 2015, 12:04am
UPDATED : Thursday, 17 September, 2015, 10:50am

Henry Cheng Kar-shun is developing Britain's single largest regeneration development in London, which involves more than 15,000 flats with an estimated investment of £5 billion.

To fund the project that will take more than 10 years, developer Knight Dragon - privately owned by Cheng of New World Development - has not ruled out any capital financing opportunities. Seeking a stock listing in Hong Kong or London is an option.

"The scale of the project is so big and the capital requirement will build up, so we will see whether we can list [the company] in Hong Kong or London," said Sammy Lee, a vice-chairman of Knight Dragon.

Read more: Greenwich Peninsula, a Hong Kong-style rail-property project, given green light in London

Lee said the company could also look for partners to co-develop the project.

The development, Greenwich Peninsula, is in Greenwich. It covers an area of 60.7 hectares and will contain up to 15,720 new homes, commercial space and hotels.

It will house London's newest film studio and boast 2.6km of public river frontage.

The developer aims to turn it into a diverse community for 28,000 people living in the area.

"The mega project is the biggest foreign investment on a single project basis," Lee said.

Knight Dragon started investing in the development as early as 2012, initially taking a 60 per cent stake.

Read more: 'There is no profit': head of Hong Kong developer New World says extending Avenue of Stars is a 'thankless task' he didn't really want

At the time, the project was jointly developed with the London-focused regeneration specialist Quintain Estates and Development.

Knight Dragon bought out the shares of its partner two years ago and then revised the master plan, which has now been given the go-ahead.

"The project is now wholly owned by us," Lee said.

He said the new plan was different from the project that was originally approved on a much smaller scale in 2004, but which had stalled for many years.

With the backing of London mayor Boris Johnson, the new plan was approved last week.

"The most important part is securing the planning approval of the government," Lee said.

Richard Blakeway, a deputy mayor for housing at the Greater London Authority, hailed the approval of the capital's biggest regeneration project when the project got the approval last week.

"This transformation of what was a disused site will not only provide thousands of much-needed new homes for Londoners, but also bring jobs as part of the wider regeneration of this key opportunity area," Blakeway said.

Of the 15,720 homes, a minimum of 3,930 will be affordable housing that the government will buy back from Knight Dragon at cost. Knight Dragon already has nearly 3,000 homes under construction.

The company has invested between £600 million and £700 million in public and social infrastructure and construction of the residential space for the affordable housing and lower end homes.

Lee said the response to the sales in the project's first phase, priced at an average of about £700 per square foot, had been tremendous.

London has maintained its position as the most liquid and transparent real estate market in the world, according to the latest Investment Intensity Index by JLL.

The index, which compares the volume of direct real estate investment over a three-year period relative to the current economic size of a city, saw London take the top spot for the third consecutive quarter.

In C-Suite, Lee shares the design of the mega redevelopment.