A Chinese company will invest £220m in Sheffield in what the council says is the largest property deal outside London by a Chinese developer.
Sichuan Guodong Construction will spend the money on up to five projects in the city centre over the next three years. It is part of a 60-year partnership between the company and the city council. The projects have yet to be chosen.
The deal, which has been 18 months in the making, will be welcomed by the government. George Osborne, the former chancellor, made several trips to China, including some with council leaders, to drum up investment.
Wang Chunming, chairman of Sichuan Guodong, first visited Sheffield after his daughter began studying at university there, while the city was twinned with Chengdu, where his company is based.
Senior Sheffield politicians and officials have paid several visits to the inland industrial city, which this weekend hosts the G20 finance ministers’ meeting.
Julie Dore, leader of Sheffield city council, said: “This is, we believe, the biggest Chinese investment deal in a UK city outside of London. “This is significant for Sheffield and for the UK. It shows confidence at a time of uncertainty with Brexit.” She said it showed British cities could go overseas for money when government grants were being cut. The money, a mix of equity and bank loans, will be in a fund managed jointly by the city council. Projects could include apartments, offices, leisure facilities and the city’s first five-star hotel.
Mr Wang was not available on Wednesday but has previously said: “This agreement illustrates our confidence in Sheffield as a city going from strength to strength, with real growth potential.” Chengdu is a city of 16m people, the fifth-largest in China, and the largest in Sichuan province in western China. Sheffield has 570,000 residents and is the UK’s third-largest local authority area outside London.
Sichuan Guodong makes floorboards and glass as well as investing in property and soda water. A subsidiary is listed in Shanghai but the Sheffield investment has been transferred from it to the unlisted parent company. The listed unit reported paying no taxes and owing debts of Rmb1.28bn in 2014, according to local government filings. By the end of 2015, it reported debt of Rmb737m ($110m) on assets of Rmb3.4bn, according to its annual report.
Mr Wang, 63, started poor — he sold clothes hangers made of bamboo before moving into construction in 1982, during the early days of China’s market reforms.
Kevin McCabe, a prominent Sheffield businessman, hosted Mr Wang at his Sheffield United football club last year. It is linked with the Chengdu Blades club and his Scarborough Group property business has partnerships with Chinese companies.
Mr McCabe was a driver behind Mr Osborne’s trip to the racially tense frontier city of Urumqi last year to promote an investment of £60m by wholesale market construction company Hualing in three northern English cities, including Sheffield. British officials said Hualing’s investment would “unlock” £1.2bn of property projects by Scarborough Group. Mr Osborne also visited Chengdu during that trip.
