Savills signs global cooperation deal with Chinese developer

Savills has been appointed to work with Chinese developer ABP to promote its business projects worldwide.

Through the deal, Savills will help ABP achieve its vision to create a new waterfront destination at Royal Albert Dock in London which will attract enterprises from Asia, the UK and Europe.

Savills will also act for ABP to attract occupiers to its developments in Beijing, Shenyang, Qindao and Huangzhou, as well as further global developments as they emerge.

Savills said that 'this type of worldwide representation between a Chinese developer and an international real estate advisor has never been seen before on this scale'.

'Through our global platform we will bring together an international business community, and in particular, provide a link between the UK and Asia to assist businesses in transferring seamlessly between the two Continents,' said CEO Jeremy Helsby.

Savills will have an on-site presence at Royal Albert Dock to market the site directly to potential occupiers. More than 60 companies from Asia alone have registered a formal interest in taking space at Royal Albert Dock, which will create some 3.5 million sq ft (325,000 m2) of new commercial space, including 3.2 million sq ft of offices, with an estimated value of over £6 bn to London’s economy.

Corporate occupiers will not only be able to lease space at the 35 acre site but purchase an office headquarters ranging between 5,000 sq ft to 200,000 sq ft.

ABP chairman Xu Weiping said: 'What we are seeing here is two great companies agreeing to work together to quicken the pace of the success of the Royal Albert Dock development.'

According to Savills data, central London office take-up in the first three quarters of 2013 has totalled 8.2 million sq ft, the strongest year for tenant demand since 2007. With vacancy rates falling in both the West End and City markets, upward pressure on rents has seen prices rise by 5% this year.

Chinese developer Advanced Business Park signed a deal in May this year to convert a plot of land next to London's City Airport into a financial district aimed at Chinese firms. It teamed up with local developer Stanhope for the development, which will be worth an expected $1.5 bn when completed.

ABP is one of a string of Asian developers recently turning to London. Dalian Wanda Group acquired the One Nine Elms site for the development of a major residential tower while Malaysian investors are developing Battersea Power Station.

Rasheed Hassan, director of cross-border investment at Savills, said the increase in the level of Chinese money into London is largely a result of the country's growing economy as well as recent relaxation by the Chinese Insurance Regulatory Commission. ‘Savills estimated this could result in up to £10 bn of new inward investment to London,’ he noted.

In general, the driving force behind Asian investors’ acquisition spree is the excess of liquidity, added Savills’ head of Central London investment Stephen Down. ‘The Malaysian economy is commodity-driven and there is a huge amount of wealth being generated which needs to be re-invested. A lot of money finds its way into London, which is a fortunate recipient thanks to the market transparency and the lack of barriers. In the case of China, the economy is growing strongly and they are looking for some relatively low risk to diversify their holdings,’ he said.