Final Nail In The Coffin For £1.7B London Office Scheme Backed By Boris Johnson
PwC said in a statement yesterday that partners from the company had been appointed liquidators to 23 companies in the ABP Group, the Chinese developer of the Royal Albert Docks scheme.
PwC said it hoped its appointment would allow it to find new investment for the project, allowing development on the 35-acre site in the Royal Docks area to start up as soon as possible.
CoStar reported private equity firms have been circling the scheme, with a view to buying the stalled development and undertaking not the original office plans, but a logistics or life sciences development.
ABP was appointed developer of the site, owned by the Greater London Authority, in 2013 as part of a deal signed off by Boris Johnson when he was mayor. It was hailed by the soon-to-be former prime minister as having the potential to create a third financial district in London after the City and Canary Wharf. The total development cost was estimated at £1.7B.
The project was started but has been beset by problems, not least the onset of the pandemic, which saw office demand dry up just at the moment when an office scheme in an untested location was coming on stream.
The first stage — 700K SF and 21 buildings consisting of primarily offices — was largely completed in summer 2019 at a cost of £300M. Since then, it has sat almost empty after failing to secure tenants.
That put pressure on the developer, which has been unable to repay debts as they fall due.
Part of the scheme totalling six buildings was put into administration in February of this year. PwC said various creditors have gone unpaid for almost two years, leading to several winding-up positions against companies in the group, which in turn led to its appointment as liquidator.
It added that it would liaise with Deloitte on the part of the site already being controlled by administrators.