ICBC provides loan to support BCEG's investment in Manchester Airport City

Project narrative

Sometime between 2015 and 2017, Industrial and Commercial Bank of China Ltd invested in a new 800 million Great British Pound business district at Manchester airport. Known as Airport City, the project aims to build a business district covering about 60 hectares next to the airport so that international companies can open facilities with easy access to other European cities. Working with the Manchester Airport Group (MAG), Beijing Construction Engineering Group (BCEG) will join Carillion PLC, and the Greater Manchester Pension Fund (GMPF) as funding partners in a Joint Venture to build Airport City. Backed by the state-owned Industrial and Commercial Bank of China, BCEG reportedly took a 20-percent equity stake in the joint venture, and in 2013, Guo Yanhong, vice general manager at BCEG said at a briefing with the chancellor in Beijing that the company will make an equity investment in the joint venture for the project of 12 million pounds. It is unclear whether ICBC provided this entire amount to BCEG. Other partners' stakes in the joint venture are as follows: Carillion (20 percent), Greater Manchester Pension Fund (10 percent), and with Manchester Airport Group holding the remaining 50 percent. Chinese companies also would be guaranteed some of the contracts on the project, it said. ICBC had pledged no funding as of early 2014, but some articles' wordings indicate it might have pledged by 2017. Outline planning permission for the project was granted at the beginning of 2013, and it will be completed over the next 10-15 years. The project was originally proposed in January 2012, ‘Airport City’ – one of the largest developments in Europe – will provide over 5 million square feet of business space, including manufacturing, warehousing, offices, hotels, retail and leisure outlets across a 160 acre regeneration site and create over 16,000 jobs. The project will be the largest UK development project since the London 2012 Olympic Games and is a key part of the government-backed Enterprise Zone launched in 2011 to attract international businesses to Manchester. Aside from construction and its equity stale, BCEG will also help market the project in China to Chinese companies that wish to rent or buy office space in the business center. BCEG was tasked with securing half of the contracts for the construction of the project, with British firm Carillion accounting for the rest. The division of work will be decided with the help of the UK firm Argent, which is the development manager for the project. BCEG conducted a roadshow for the project in Beijing, Shanghai and Shenzhen from June 9-13, 2014. Manchester Airport Group is another investor, part owned by Labour Party-run Manchester City Council. The Manchester City Council said: Speaking at Airport City on his state visit to the UK in 2015, China’s President Xi Jinping said, “Airport City Manchester is the first project to have materialized since our two countries signed an MoU [memorandum of understanding] on infrastructure cooperation in 2011. It is also the first major infrastructure project in the UK with the involvement of a Chinese company in the form of equity investment. In September 2016, Amazon opened a new fulfillment center with over 1 million square feet of space over three floors near Manchester airport. The warehouse was located in the newly established “Enterprise Zone,” known as Airport City. The Zone offers five million square feet of development over 150 acres, including an “advanced manufacturing cluster.” Firms including Amazon and DHL employ over 20,000 workers at various sites.