Hong Kong financial crisis could hit £ 500million Nestlé Tower program
BELIEF IN CRISIS: Work on an ‘iconic’ downtown tower appears to have been halted as reports from China suggest the company behind the project may be in trouble. By STEVEN DOWNES
There are growing concerns that another multi-million pound town center development in Croydon has hit the buffers.
A series of articles in the Chinese press this month suggest that R&F Properties is struggling to comply with the Beijing government’s new rules to reduce developer debt. R&F owns the Nestlé Tower, St George’s Promenade below and the neighboring Grade II listed Segas House in the city center, all just across Katharine Street from Croydon Town Hall and across the road from the Fairfield Halls.
R&F, based in Guangzhou, near Hong Kong, acquired the Croydon properties in a £ 60million deal in March 2017.
Work on R & F’s £ 500million Queen’s Square project began in 2019, with the start of the repurposing of the 22-story Nestlé Tower office building into 288 private apartments.
There was, like many other sites, a work interruption last year due to the coronavirus, but there has been no sign of a resumption in 2021, as the site has been inactive for at least 12 months.
Inside Croydon appeals to R&F London offices and Ardmore builders have gone unanswered.
Delays in the delivery of what has been touted as a ‘glamorous’ and ‘iconic’ development will be just the latest blow to ‘ambitious’ Croydon and the City Council’s downtown ‘growth zone’ .
This follows City Hall’s belated admission that the £ 1.4billion Westfield program for the Whitgift Center has collapsed and serious issues arise with the council’s refurbishment of the Fairfield Halls and development from the neighboring district. Green College website.
The Nestlé Tower has been vacant since 2012, after the Swiss food multinational left the office building it had occupied since it was built in 1964.
The tower and site of St George’s Walk have already been redeveloped.
Almost 15 years ago, what was called the Park Place program was brought to life by the owners of the day, Minerva and LendLease. They intended to build a mixed-use development that included a department store (remember that?) For John Lewis (remember that?).
A binding buy order was approved by the council in 2007, but the then Tory-controlled authority ended the project two years later after LendLease pulled out of the project and Minerva was unable to move forward. the project.
Minerva nonetheless made an estimated profit of £ 50million by doing nothing with the site before the sale to R&F eight years later.
R & F’s ambitious plans for Queen’s Square are supposed to raise the main tower to 28 floors, while an adjoining five-story office building is said to be expanded into a seven-story block of 63 mixed residential units, with commercial uses across ground level. .
In 2019, after his company, Ardmore, secured a £ 100million contract for the first phase of the work, director James Byrne said: “The redevelopment of Queen’s Square is one of the most iconic projects in the world. south London.
But the post-covid world turns out to be a cruel place.
In China, much of the economic growth and development of the past two decades has been fueled by corporate borrowing.
And after a year of little or no economic activity, some of the most indebted companies are struggling to raise enough cash just to pay their interest, putting some of them on the brink of collapse.
The situation surrounding a Chinese company, Evergrande, has caused panic on some Asian stock exchanges. Evergrande’s borrowings exceed $ 300 billion, making it the most indebted developer in the world.
The Hong Kong Stock Exchange was closed yesterday when it was announced that the company was due to repay interest of $ 83.5 million today. Evergrande shares have lost 80% of their value so far this year, and although the scale of R & F’s finances is nowhere near this huge, with the development company having an interest in an iconic building in Croydon is affected by similar problems.
This week the Financial Time reported that across China, sales of newly developed properties “are flat or declining as authorities tighten access to mortgages, and developers are now offering discounts in an attempt to move units – even if this results in a small loss ”.
They add: “The woes of Evergrande highlight the importance of the real estate sector for the Chinese financial system, but its weakness and those of hundreds of other developers in China would also have profound consequences for the economy at large.
The FT describes it as “nationwide cold sweeping the Chinese real estate sector.”
Not for the first time, it seems, when China sneezes, Croydon is among those who catch a cold …
- If you have a feature on life in or around Croydon, or if you would like to publicize your association or residents’ business, or if you have a local event to promote, please email us with full details at [email protected]
- Inside Croydon is a member of the Independent Community News Network
- Inside Croydon works in conjunction with the Bureau of Investigative Journalism, as well as BBC London News and ITV London
- Rotten BOROUGH AWARD: Croydon was named the rottenest borough in the country for 2020 in the annual civic cock-up roundup at Private detective magazine – the Fourth year in a row that Inside Croydon has been the source of these award-winning nominations
- Inside Croydon: 3 million page views in 2020. Sseen by 1.4 million unique visitors