Editor's blog: Chinese developers enjoy Wandsworth takeaway

Beijing is well on the way to being London's premier home-builder. There may be tears before final contract exchange, though.

by Matthew Gwyther
Last Updated: 21 Jan 2014

We all know that we’re not building enough houses in the UK. So if we lack the cash and the resources to put them up ourselves why not let the Chinese do it?

This is what appears to be occurring in parts of London as cash-strapped local and central government can barely afford to put up a social bungalow or bijou broom cupboard. The latest project to be acquired by Beijing is in the suburb of Wandsworth. Or Battersea Reach as the agents like to call it.

Wandsworth town centre is, in all honesty, a bit of a dump. The Ram Brewery — where beer was first brewed in 1576 — used to be owned by Youngs but closed down ages ago. The nearby Arndale centre is an unprepossessing mess.

The seven acres of land in the heart of Wandsworth – surrounded by a one way urban motorway - have been sold to a state-owned Chinese developer in a £600 million deal unveiled this morning. It has left mayor Johnson purring with pleasure as he claims he was instrumental in swinging the deal in between games of wiff waff.  

The site will be turned into a new "town centre" with 661 new homes, shops, bars and restaurants. The scheme also includes a 36-storey landmark tower – yet another one - with 166 flats. Needless to say the Chinese immediately put their foot in it when Zhang Yuliang who chairs the Shanghai based Greenland Group noted that he fully expected the development to be hugely attractive to Chinese investors.

In a statement issued to  Bloomberg, he said: "The prospect for our overseas property business is great. Rich and middle-class Chinese will be the main buyers of our projects."

Why anybody is surprised by this is a mystery to me. What do they think Beijing is going to do – put an offer in on Birmingham’s "Benefits Street" and give it a thorough refurb. 

Social housing is not having a good time at the moment. From Ashford in Kent we get news that landlord Fergus Wilson and his charming wife are about to start decanting all his tenants on benefits from his private estate in favour of Eastern Europeans who don’t get behind on the rent. There won’t be council houses to accommodate them.

It’s fair to say that housing market in the UK at the moment is not delivering a socially desirable outcome, as anybody under the age of 35 will tell you. 

It’s over-heated to boiling point and rife with speculation as there are not enough roofs over heads to go round.

It remains to be seen whether the Chinese are being suckered into what is becoming an alarmingly growing bubble. Still, look on the bright side – it’s even more money in the pockets of our chums at Foxtons.

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