Greenland Group Breaks Ground on $922M London Housing Project

Greenland Group, which last year grew to become China’s largest real estate developer, started growing its business in the UK last week when it ground on a ₤600 million ($922 million) residential project.

The Ram Quarter project is one of two London projects acquired by Shanghai-based Greenland in 2013 and among more than 10 international developments that the Chinese state-owned property firm has taken on in at least six countries over the last two years.

London has become a favorite target for Chinese investors and developers and Greenland is banking on the appeal of apartments in the UK capital to home buyers from China and other locations to help it get a quick return on its investment.

661 New Homes to Sell

The 90,000 square metre (969,000 square foot) project in London’s Wandsworth area is the first of Greenland’s UK projects to break ground, and is planned to include luxury apartments, affordable housing and commercial facilities, according to a statement from Greenland.

“London, as an international financial center, provides an excellent environment for investment, giving us great confidence in future developments and investment,” said Xu Jing, Greenland Group’s Executive Vice President.

Greenland acquired the 30,000 square metre (323,000 square foot) site of the city’s historic Ram Brewery in January of 2014. Plans drawn up and approved by local planners before the acquisition call for 661 new homes, including a 36-storey tower.

The Greenland Group has chosen Kier as preferred bidder to deliver the £170m first phase of The Ram Quarter, its major flagship regeneration scheme in Wandsworth. The Ram Quarter will be delivered in three phases, with a total value of around £600m.

In this £170 million ($248 million) first phase of the project, Greenland has partnered with UK builder Kier to construct 338 new homes, as well as refurbishing the brewery complex to create 5200 square metres (56,000 square feet) of retail space.

Greenland’s second London project was acquired in March 2014, and is said to valued at $1 billion. Greenland has yet to begin construction on the site in the city’s Canary Wharf financial district, where plans call for a 242-metre tall building containing 700 homes, as well as offices and shops.

Xu said that the group’s accumulative investment in London was expected to reach ₤1.3 billion ($1.96 billion) in the next few years.

Deputy mayor of Greater London Edward Lister, who attended the ground-breaking ceremony, said, “We are trying to build 50,000 homes a year in this city – we need partners like Greenland.”

Selling London Homes to Chinese Buyers

Greenland which, besides its UK projects, acquired its second site in Malaysia during January of this year, is already one of the most aggressive of China’s developers in pursuing overseas projects.

In addition to the nearly $2 billion that Greenland is investing in London, it is putting $1.28 billion into Malaysia and also has projects in New York, Los Angeles, Sydney and Melbourne, among other locations.

Greenland expects a growing percentage of its sales to come from its overseas investments. In the case of the developers’s first project in Sydney, Greenland sold RMB1.5 billion ($242 million) in new housing during the first weekend of sales, with many of these homes being sold to the company’s mainland customers.

With the mainland’s property market still mired in a year-long slump and the Chinese government encouraging outbound investment, these overseas projects will become a growing source of revenue for Greenland and the many other Chinese developers who have taken on projects internationally.