Canary Wharf skyscraper faces uncertain future as China cracks down on builders
Many development projects in London are in limbo as Beijing is cracking down on overleveraged firms and casting a pall of uncertainty on their ability to bankroll their ventures.
Greenland, a major Chinese real estate developer which rushed to London in post-recession boom along with many others, is reportedly struggling to finish ‘Spire’, which when it began in 2014 was advertised as the tallest building of Western Europe.
The 235-metre high building, destined to rival Canary Wharf skyline, is nowhere near completion even after seven years of the project launch.
Greenland is not alone in its predicament, and almost all Chinese firms face the same obscure future in the competitive London market, after Beijing brought three new regulations, which together put strict curbs on these firms’ liquidity.
All major property markets globally are into a virtual standby as the fate of Evergrande, the most indebted Chinese behemoth, hangs in balance.
Experts blame in part Covid-19 pandemic for the slowdown, taxes against foreign buyers which drove the flat prices down since 2014, and also Brexit. An uncertain political climate in the country hasn’t helped the matter either.
Country Garden, another major real estate player from China, has struggled to develop a site it bought in East London’s Poplar for £80m in 2018. The site was slated to accommodate 800 homes costing £400m. Reportedly, there are hoardings all right, but no houses yet.
“Most mainland Chinese developers I’m aware of that have come to the UK have had pretty disastrous results,” a London homebuilder told the Financial Times.
“[They have] paid an awful lot for the land, struggled with construction costs and really struggled with sales.”