Chinese President Xi Jinping and then-U.K. Prime Minister David Cameron were on hand to toast the signing of the deal to transform 35 acres of derelict London riverfront into a bustling finance hub.
Five years on, in the wake of Brexit and a cooling of Sino-British ties, developer Xu Weiping’s vision for another Canary Wharf packed with Chinese companies looks more like a mirage. Overlooking the Thames, along the old Royal Albert Docks and across the water from City Airport, stand 21 new buildings that form the first phase of the 1.7 billion-pound ($2.2 billion) project. They’re almost all empty.
“All of these geopolitical changes have brought uncertainty, which affected the mindset of Chinese and Asian investors,” says Xu, a China-born citizen of the Seychelles who has been in London since the outbreak of the pandemic. “Some of them already paid deposits, but because of those changes they had a change of heart. Therefore the tension between China and the U.K. definitely brought risks to our project here.”
Not just Xu’s project. U.K. real estate investors, already facing a deadly virus that’s threatened rent payments, occupancy and defaults, have seen the tap from China virtually shut. While investment was curbed by the tightening of capital controls in 2017, investors from China, excluding Hong Kong, have yet to acquire a single commercial property in Britain so far in 2020, according to data compiled by broker CBRE Group Inc. This would be the first year they’ll have been out of the market since 2011.