LONDON (Reuters) - China’s Beijing Construction Engineering Group (BCEG) BJCEG.UL has entered a joint venture to build a business district at Manchester airport, Britain’s third busiest, the latest in a series of Chinese investments in the UK.
The deal, whose announcement on Sunday coincided with a visit to China by British Chancellor George Osborne, will result in BCEG teaming up with construction group Carillion (CLLN.L), the Greater Manchester Pension Fund and the airport to build the 800 million pound ($1.3 billion) Airport City scheme.
BCEG, which worked on the 2008 Beijing Olympics’ press centre and gymnasium venue, is being backed by China’s biggest bank by assets, the Industrial and Commercial Bank of China (601398.SS) (1398.HK), a source familiar with the talks said.
“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,” said BCEG International’s managing director, Xing Yan.
Manchester Airport has been hunting partners to help build the new 5 million square foot (500,000 sq m) business centre, intended to boost the airport’s role as a business travel hub. A spokesman for the airport said the partners would each invest but declined to specify how big a stake each would take.
Argent Group, which is building the 67 acre (27 hectare) King’s Cross scheme in central London, has been appointed to manage the development of the scheme.
The deal comes as Britain tries to woo Chinese investment as part of plans to increase bilateral trade to $100 billion by 2015.
A Chinese billionaire announced plans last week to spend 500 million pounds to rebuild London’s Crystal Palace while a Chinese developer signed a deal in May to turn a derelic plot of land near London’s City Airport into the city’s third financial district.
($1 = 0.6268 British pounds)
Reporting by Brenda Goh; Editing by Kevin Liffey