Chinese group backs €1.6b of real estate projects in northern England

China's Xinjiang Hualing Industry & Trade Group is backing three real estate projects in the north of England with a total end value of £1.2 bn (€1.6 bn).

The Chinese conglomerate is committing £60 mln to kick start projects in Leeds, Salford and Sheffield, which are being led by Kevin McCabe's Scarborough Group.

George Osborne, the UK's chancellor of the exchequer, announced the investment in the violence-plagued north-western Chinese province of Xinjiang on Wednesday. One of the aims of Osborne's trade mission to China is to promote investment in the 'northern powerhouse' of England.

The chancellor said that the three development projects would create 18,000 jobs and 10,000 homes. 'We are building an ever closer relationship with China. It's a partnership that is set to unleash growth and help regions like Xinjiang where we know investment can make a real difference, as well as unleash new growth back home, in places like our own Northern Powerhouse,' Osborne said.

Projects
The projects are Middlewood Locks in Salford; the £400 mln Thorpe Park mixed-use scheme in Leeds and the £40 mln office and commercial property Sheffield Digital Campus development.

Middlewood Locks involves the development of 2,000 homes and 70,000 m2 of mixed-use space in the vicinity of the Manchester Bolton and Bury canal. The project is being developed by a joint venture of Scarborough Group, Hong Kong developer Top Spring International and Singapore's Metro Holdings.

Comment
'For Scarborough, this is the latest chapter in a long history in China, spanning over 13 years, during which time we have established strong relationships with local partners as the foundation for significant investments in China and the Far East,' Scarborough chairman Kevin McCabe said.

Human rights groups have criticised Osborne's his trip to Xinjiang as an endorsement of China's treatment of the Muslim Uighur ethnic group. Tensions have flared up into violence between elements of the Uighur and majority Han Chinese communities in recent years. Osborne countered that it was better to engage in discussions rather than to stand on the side-lines and rely on 'megaphone diplomacy'.

Asian investment
Following Osborne's announcement, CBRE noted that in 2014 Asian investors spent $40 bn (€37 bn) outside their region, a rise of 23% year-on-year. Chinese investors were the second most active Asian group, accounting for $10 bn, according to Iryna Pylypchuk, global research at CBRE.

VIDEO
Mark Jackson of Scarborough Group talks about plans for Thorpe Park Leeds during Mipim UK