This UK city just became the unlikely target for a £220m development
This UK city just became the unlikely target for a £220m development
London isn’t hogging all the attention in the wake of Brexit
Sheffield, the third largest local authority area in the UK, will be receiving GBP220 million (USD290 million) in property projects over three years from board manufacturer Sichuan Guodong Construction, in what is being called the largest Chinese investment deal outside the British capital.
“Sheffield has a great prospect for development. It is an industrial city and it’s just at the beginning of a transition,” Guodong chairman Wang Chunming told BBC.
“It doesn’t even have a five-star hotel,” added the businessman, who just built a five-star hotel in Guodong’s home town of Chengdu.
Wang’s multimillion-pound commitment is the first tranche of a longer deal that could involve more than GBP1 billion (USD1.3 billion) of investments over 60 years, the Sheffield council disclosed.
Guodong’s choice of Sheffield is a vote of confidence for Britain, given the nationwide uncertainty following Brexit, along with the fact that the city is a relatively socioeconomically depressed area.
“This is significant for Sheffield and for the UK. It shows confidence at a time of uncertainty with Brexit,” Julie Dore, leader of Sheffield city council, said.
More: Post-Brexit: UK real estate firms are targeting Chinese investors
Around 40,000 people in Sheffield suffer from food poverty. A fifth of households in the city live in poverty, a 2013 report by The Guardian showed.
Wang’s daughter studied at university in Sheffield, a sister city of Chengdu.
According to Wang, the financing vehicle for the investment would not come from Guodong’s Shanghai-listed subsidiary but rather from its unlisted parent company.
“If we had to use our publicly listed company to invest, the red tape would have been too complicated and time-consuming. Not every shareholder understands every decision we make, and the board might not have voted for all of our decisions,” he explained to BBC.
The public company amassed a debt of CNY737 million (USD110 million) on assets of CNY3.4 billion (USD512 million) in 2015, the Financial Times reported, citing an annual report.
Guodong’s investment is part of a larger phenomenon playing out among Chinese investors following Brexit.
“We’ve had more inquiries, more leads…from China than we’ve seen really for the duration of this year,” says Charles Pittar, CEO of Chinese property portal Juwai.com (video below). “The last four weeks have seen leads up about 40 percent and a clear indication that the Chinese are very, very interested in the UK and, post the Brexit result, we’re seeing that demand increase.”
Read next: Yet another Asian investor staking their claim in post-Brexit London
Source: Property Report