By Gabriel Circiog, Associate Editor
Chinese state-owned developer Greenland Group has entered the U.K. market with the acquisition of the Ram Brewery development site in Wandsworth, London, in a transaction with a total investment value around £600 million ($987 million). The seller was Minerva, the property investment and development group acquired by clients of Ares Management L.L.C. and Delancey in 2011.
Originally bought by Minerva in 2006 for redevelopment, the historic 7.75-acre Ram Brewery is being sold with outline planning permission for 661 new homes, including a 36-story landmark high-rise featuring 166 apartments and 9,500 square meters (around 102,000 square feet) of commercial space. The plan complements the site’s historic buildings which formed the original Young’s brewery.
“We are very pleased to have been able to align Minerva with Greenland in what is a landmark transaction for the London residential market and an exceptional result for Wandsworth town centre,” says Guy Grainger, U.K. CEO of Jones Lang LaSalle. “This deal emphasizes the strong relationships currently being created between the U.K. and China and further highlights London as the number one destination for international capital, both of which we see as assuring the delivery of this important regeneration project.”
“Since acquiring Minerva two years ago, we have worked hard to comprehensively redesign the original scheme which culminated in planning consent being secured last December,” says Managing Director of Delancey, Paul Goswell. “Our strategy had been to implement the scheme ourselves, possibly with a partner, but that changed when Greenland made their unsolicited proposal. We are delighted that our efforts to date, together with Greenland’s world class development expertise, will mean that this long awaited scheme finally happens for Wandsworth.”
The acquisition doesn’t only mark Greenland Group’s entrance to the U.K. market but is also the company’s first stop in Europe. Talking about choosing London as the company’s gateway to Europe, Zhang Yuliang, chairman & president of Greenland Group said: “London is the global financial centre as well as the most open and diversified city that enjoys the most mature economic development, making it the first option for our investment in Europe. Due to the active trading in London local real estate market in the last two years, the average residential price rose by 10 percent in 2013, and the increase in demand is expected to continue in 2014. There have been more and more individual investors who favor the U.K. market, thanks to the stable return on asset, high-quality assets and sound market liquidity.”
The Ram Brewery development site acquisition continues the 2013 trend of Asian developers investing in the London market. As previously reported by Commercial Property Executive, 2013 saw a number of major investments by Asian developers into regeneration opportunities in London. Singapore-listed property developer Oxley Holdings Ltd. has acquired the 40-acre Royal Wharf with plans to develop a new district featuring around 3,400 residential units and various commercial, retail, leisure and educational facilities. China-based ABP announced a £1 billion ($1.6 billion) plan to transform London’s Royal Docks into a business park. Dalian Whanda, also from China, announced it will invest £700 million ($1.1 billion) into a new luxury hotel at Nine Elms.
According to international real estate advisor Savills, investment turnover for the Central London market in 2013 reached £20.56 billion ($33.8 billion), the highest level of investment ever reached in Central London. The figure was predominantly driven by Asian investors who accounted for £5.8 billion ($9.5 billion) of total transactions, and U.K. investors with £5.6 billion ($9.2 billion).