A Hong Kong-listed property group controlled by the younger son of Li Ka-shing is poised to take charge of a £6 billion ($7.8 billion) development in North London after a local developer walked away from the UK mega-project.
Pacific Century Premium Developments (PCPD), the real estate arm of Richard Li’s PCCW, had been named reserve bidder for the Meridian Water project that is expected to deliver 10,000 homes to the London borough of Enfield. The local council said it would start preliminary talks with PCPD after it failed to reach an agreement on terms with partner Barratt Developments, which had previously been selected as the project’s master developer.
If PCPD moves forward on the large-scale regeneration project, it would mark the first British foray for a company that focusses on development in Asia Pacific, adding to a flurry of London real estate deals by Hong Kong firms.
PCPD In Talks for North London Project
“The Enfield Cabinet agreed last night that Enfield Council would approach the reserve bidder Pacific Century Premium Development to open discussions on Meridian Water,” said a spokesperson for the borough council cited by CoStar last Tuesday. “Any options for how the delivery of Meridian Water can be taken forward will be carefully assessed to ensure they best meet the interests of the people of Enfield and will be taken back to Cabinet for final decision.”
The report indicates that PCPD had initially been shortlisted in partnership with British construction contractor Willmott Dixon. PCPD is now said to be bidding on the project in a joint venture with construction firm Balfour Beatty, according to a Reuters account.
If the Hong Kong builder makes a satisfactory financial and commercial commitment, the local council will decide whether to approve PCPD as the master developer. A decision is reportedly expected by the end of the year.
British Bidder Pulls Out of Large-Scale Development
The 210-acre project, which is supported by the Greater London Authority, aims to build 10,000 homes including thousands of affordable units to help ease the city’s housing shortage. As one of the city’s largest regeneration projects, Meridian Water will also deliver public open spaces, shops, community facilities, and a new railway station, and is expected to generate some 6,700 new jobs, plus 10,000 construction jobs.
London mayor Sadiq Khan visited the site this past January, as construction enabling works began on the first 725 homes. An “open workshop for makers, creators and artists” called Meridian Works is slated to open next year, and the first train is expected to arrive at the new station in 2019.
Enfield announced late last month it had ended discussions on a development agreement with Barratt, the London-listed residential giant that was chosen as the project’s preferred bidder in May 2016. “Enfield Council has informed Barratt that their proposed terms were unacceptable,” according to the statement.
“Meridian Water remains one of the most exciting development opportunities anywhere in London but we were simply not prepared to sign up to what we considered to be a poor deal for the residents and businesses of Enfield,” the statement adds.
Enfield Council, which has taken direct control of the project, owns two-thirds of the developable site and has secured Housing Zone funding as well as planning consent for the first batch of homes.
Richard Li May Join Hong Kong Stampede into Britain
PCPD, which focusses on developing and managing premium property and infrastructure projects in Hong Kong, Jakarta and Japan, is best known for the Bel-Air luxury residential development within Hong Kong’s Cyberport business park. The firm is majority-owned by PCCW Limited (Pacific Century CyberWorks), part of Richard Li’s flagship conglomerate Pacific Century Group.
The developer’s potential involvement in the Meridian Water project comes amid a wave of Hong Kong capital targetting the London real estate market, with over $4.3 billion invested or committed this year alone. This past February, New World Development chairman Henry Cheng Kar-shun committed to spend £1 billion ($1.25 billion) developing the Peninsula Place mixed-use property in Greenwich, London via his privately held vehicle Knight Dragon.
The project, which will yield 800 apartments, office space and 500 hotel rooms totalling 1.4 million square feet, forms part of Cheng’s 15,720-home Greenwich Peninsula mega-project which is London’s largest single regeneration effort.