Mainland Chinese developers continue to wind down their overseas holdings with the UK unit of Shanghai Greenland Group revealing to Mingtiandi that it has sold off the final two phases of a project which it purchased for £135.7 million ($184 million) in 2014, with media reports indicating the disposal came at a £40 million price point.
“We accepted an offer in 2021 for phases 2 and 3 at Ram Quarter which will see complementary development to support our ongoing investment in phase 1 of this unique project,” a Greenland spokesperson said. “Since acquiring the site in 2014 we have overseen the transformation of what was formerly a closed-off, walled site into a thriving destination for Wandsworth and south London.”
Greenland says that the buyer of the still-undeveloped portion of the project on a historic brewery site in southwest London is St George, a division of UK development heavyweight Berkeley Group. The Financial Times, which first broke the news of the sale, cited sources familiar with the transaction as indicating the £40 million price tag.
Greenland Group, a top 10 developer controlled by the Shanghai government, is selling down its project at a time when Chinese builders are finding that debt restrictions back home are undermining ambitious UK investments, with problems at Guangzhou R&F and Advanced Business Parks developments making the British headlines this month as Shimao Group and China Vanke sell down assets in London.
Greenland Scales Back
Berkeley Group now owns the rights to develop 375 homes and 30,000 square feet (2,787 square metres) of commercial space in the final two phases of the Ram Quarter project, alongside the first phase which Greenland began developing in 2015.
The remaining portion of the project in the Wandsworth area of London represents a 3.4 acre (1.38 hectare) site with planning consent for residential-led development. Greenland Group is retaining phase one of the project, which includes 338 homes and 70,000 square feet of ground floor retail and leisure space on a 4.5 acre plot.
“With the majority of homes now sold and the commercial space attracting exciting occupier brands, our focus in Wandsworth is on continuing the active management of the asset we’ve established,” the company spokesperson said.
Greenland Group had announced the purchase of the former Ram Brewery site in January 2014 as its first project in the UK as the state-run giant took a leading role in a wave of Chinese outbound real estate investment by snatching up projects in Europe, North America, Australia and Asia.
That outbound wave hit a wall in 2017 when mainland authorities clamped down on capital outflows over debt and foreign exchange concerns. Since that time the developer has been unwinding the majority of its overseas holdings, including selling off a piece of its Pacific Park project in Brooklyn in 2018 and sell off the undeveloped site of a San Francisco Bay area project for $308 million that same year.
Greenland’s other major UK project, a 67-storey residential tower near Canary Wharf named the Spire, has halted construction since 2019.
Asset Sales and Stalled Projects
The Shanghai-based builder says that its sale of the London project closed in December, or just one month before China’s number three developer, Vanke announced that it had sold its Ryder Court office building in London to M&G for $178 million.
China’s development giants have swung from bullish buyers to motivated sellers as the country’s ongoing “three red lines” restrictions on debt have cut off access to new credit and sparked a rash of asset sales.
Shimao Group, which earlier this month sold assets in Hong Kong and Shanghai, last week disposed of the Christ Church Court office building at 15 Newgate Street to Goldman Sachs for £370 million, according to a report by React News.
The cadre of asset sellers can be counted as the Chinese investors making graceful exits. Advanced Business Parks, which had been attempting a £1.7 billion redevelopment of the Royal Albert Docks in east London was told by the London government this month that it has until March to restart the stalled development.
Top Chinese developer Guangzhou R&F also has trouble with project progress in London, with contractors at its One Nine Elms development reportedly walking off the site due to payment issues.