Greenwich Peninsula, a Hong Kong-style rail-property project, given green light in London
London’s Greenwich Peninsula regeneration project was finally given the go ahead last week, with Sammy Lee of Knight Dragon spearheading plans for a Hong Kong-style integrated model
Stalled for many years, the regeneration project in Greenwich Peninsula in south east London, best known as the location for the O2 music arena, was finally given the go-ahead last week.
Sammy Lee, vice-chairman of the project’s developer, Knight Dragon, said plans for a Hong Kong-style integrated rail and property development model – building hotels and a shopping mall on top of the subway station – have been drawn up and are aimed at creating a vibrant community in the area.
Why did the company decide to create a new masterplan?
The intention was an early part of my vision – removing some historical associations, responding to the acute supply and demand imbalance of housing in London, delivering a community spirit in the best traditions of London, rezoning certain key areas and delivering placemaking, culture and arts to a scale rarely, if ever, seen.
The master plan has been approved. What’s next?
We have invested between £600 million and £700 million (HK$8.4 billion) in public and social infrastructure and construction of the residential space for the affordable housing and lower end homes. You can see it as a phase one development. In phase two, we are developing five blocks of luxury homes, with targeted average prices of more than £1,000 per sq ft. They will be offered for global sale early next year.
We are now talking to the Greater London Authority to renovate the existing Jubilee Line station to provide a retail environment and over 1 million sq ft of mixed use [facilities], right at the heart of the scheme. I want to make it similar to Hong Kong’s Elements at Kowloon Station, or Pacific Place at Admiralty Station. The idea is building the shopping centre and two hotels above the subway station, North Greenwich.
Investment for the residential blocks will cost another £300 million and the renovation of the subway station and the development of hotels cost about £500 million.
The project has been stalled for many years, but now you have obtained planning approval. You must be proud.
Well, I am quite proud of it. This is a big project. It is like the entire development of West Kowloon in Hong Kong. It features residential, hotels, commercial spaces and cultural facilities. How many developers are involved to build West Kowloon? We are building [this] on our own.
The development will have 1.6 miles of public river frontage, and London’s newest film studio. As the Peninsula develops, a possible direct Clipper service from Greenwich Peninsula to Canary Wharf is also being considered.
Over the last 18 months Knight Dragon has been collaborating with world-class creatives from different fields to develop a new approach to urban renewal.
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.
We cut the ratio of private units to affordable homes to 75:25, against 62:38. It makes the project more viable in terms of profitability. Knight Dragon already has nearly 3,000 homes under construction.
What is the key to its success?
I believe personal touch is the key to get the approval. There are many big Hong Kong and mainland corporations investing in London. Their relations with the government officials are not that close. Knight Dragon is a company of fewer than 30 staff in London.
It is owned by Henry Cheng (chairman of New World Development). Cheng gives me a free hand to operate it. Over the past 18 to 24 months, I have been lobbying government officials and built up the relationship with us. Personal touch makes a difference.
The government buys our idea. We promised to build affordable and lower-end homes in the phase one development as a way to help solve the housing problem in London. Unlike some foreign developers, we promised not to rush to sell units to Hong Kong and mainland buyers.
If the units are sold to speculators and investors, they may not move in after their purchases. The project could become a ghost city, that is a result the government does not want to see.
We do not want to see it either. We are building a big project, we are building a community, we need people to move in.
Have you invested in London before?
On behalf of Cheng, we delivered a quality residential project in London more than 10 years ago called The Knightsbridge, a high end residential development close to the department store Harrods and Hyde Park.
What is your background and can you tell me about your relationship with Henry Cheng?
I was a former Hong Kong lawyer. I left the industry in 1995 and was involved in personal property investments. I have known Cheng for about 20 years. We are friends. I have helped Cheng to handle his personal property investments from Hong Kong, to the US and UK. And now our focus is the Greenwich Peninsula. But I have never got involved into the businesses of his listed companies.
What’s your view on London’s real estate market outlook?
From Hong Kong to mainland China, all major property players want to develop in London. Taking into account the yuan depreciation and economic uncertainties, London has become a haven.