Airport City ready for take-off with Chinese investment
WORK is due to start on Manchester Airports Group’s (MAG) £800m Airport City scheme next year after a joint venture deal was agreed with the Beijing Construction Engineering Group (BCEG), which is backed by a Chinese state bank.
Chancellor George Osborne announced the partnership at Beijing Airport yesterday while on a trade mission.
The joint venture also includes construction group Carillion and the Greater Manchester Pension Fund (GMPF). Argent has been appointed as the development manager for the scheme.
The terms of the joint venture were not disclosed but BCEG has reportedly taken 20% and Carillion said it expects to invest £12m in return for shares.
Airport City will consist of two sections – a world logistics hub to the south of the airport and a business district to the north that will have 1.2 million sq ft of offices, 530,000 sq ft of manufacturing space and 1,300 hotel beds on a 65-acre site. The 15-year project is expected to create 16,000 jobs.
The airport has been working on the bid process with commercial property agent CBRE all year, and Argent in partnership with Carillion and the Greater Manchester Pension Fund (GMPF) was an early contender.
A rival bid was tabled by Manchester’s Ask Developments which said it had an exclusivity arrangement with BCEG, which is supported by the Industrial and Commercial Bank of China (ICBC). In July Ask threatened legal action over the way the process was handled. Ask had no comment to make on the latest announcement and MAG said it had conformed to the legal requirements. “The partners have been selected on who brings the best expertise and skills to the project,” said a spokesman.
Chief executive Charlie Cornish said: “We are delighted to confirm organisations of global standing as our joint venture partners. The inclusion of BCEG is significant because as a group, we have been keen to forge greater links with the Far East and this gives us an opportunity to strengthen vital business links with China.
“With GMPF on board, Greater Manchester is investing in the future of the North West and Carillion bring sector-leading experience in project finance, delivery and sustainability, both in the UK and internationally. In Argent, we have one of the most renowned developers in its field and by working together as a partnership, we are well positioned to deliver the UK’s first Airport City.”
Xing Yan, managing director of BCEG International, said: “To be included in such an interesting and unique development is a real honour. To be part of a project of this size and scale, working alongside other such highly regarded organisations, will be an exciting, challenging and rewarding opportunity, which we look forward to beginning. We see our involvement in Airport City as an extension of the memorandum of understanding between China and the UK, where we have been looking to further explore joint infrastructure opportunities for some time.”
The airport has been pushing its links to China and is actively looking to the Far East for a direct airline service between Manchester and China.