Chinese firm to develop business park in London

London's third financial district, a business park aimed at Chinese and Asian companies, will be developed by a Chinese company in East London.

China's Advanced Business Park signed the 1 billion pound ($1.51 billion) deal with London Mayor Boris Johnson on Wednesday to develop a 14-hectare complex of offices and shops at the 130-year-old Royal Albert Dock, near London City Airport.

It's the largest commercial real estate project in Britain that Chinese companies have invested in so far.

Johnson called it London's third financial district, after the City of London and Canary Wharf. The project is expected to create 20,000 jobs.

ABP Chairman Xu Weiping said that 30 percent of the total investment in the project will come from ABP, 30 to 40 percent from bank loans and private equity investors; and the remainder from pre-sales and sale of property.

"The project is designed to be carried out in three or five phases and completed in about eight to 10 years," Xu added.

"My vision is to develop a world-class international business district which will initially target Asian businesses to help them secure a destination in London, which in China is seen as the gateway to both the United Kingdom and the wider European economy," he said.

ABP has yet to sign up tenants for the project but has seen strong interest from Chinese companies, including some of its top national and regional banks.

Working with UK developer Stanhope and architects and master planners Farrells, the first phase of the project will develop a minimum of 55,740 square meters, with the first occupants due to move in by 2017.

The project hopes to sell 70 percent of the space to Asian companies, as Chinese companies prefer to own rather than rent their offices, while it also hopes to sell space to European companies, he said.

Speaking of the risks to the project, Xu said that he is confident about its future as long as the macroeconomic outlook remains positive in Asia.

He added that ABP has prepared for the project for about five years and hopes to make the area an example of full cultural and economic integration between the East and the West.

Founded in 2003, ABP is a private company, with a track record of investing in and transforming large areas in need of regeneration.

The Royal Albert Dock project is the first project outside China for ABP.

London is keen to regenerate derelict sites around its eastern waterways in the aftermath of last year's Olympic Games.

"Creating a third financial district in the capital, this development will act as a beacon for Eastern investors looking West, bringing with it tens of thousands of jobs and billions of pounds of investment for the UK economy," Johnson said.

"This deal symbolizes the revival of that great era, continuing the re-invention of this once-maligned part of the capital into a 21st-century center of trade and investment," he added.

Royal Albert Dock, which opened in 1880, was Britain's most modern dock, the first to use electricity and also equipped with cutting-edge cranes and steel winches that unloaded tobacco from the United States, as well as fruit and meat from continental Europe.

But like the capital's other docks, the Royal Albert Dock fell into decline in the 1950s and saw the last ship set sail in 1980.

The deal is expected to boost local employment in the Newham area of East London by 30 percent.

Newham Mayor Robin Wales said: "The Royal Docks Enterprise Zone offers an unrivaled investment opportunity and this deal further strengthens Newham's growing reputation as an ideal destination for international business."