Published: 10:00, 03 November 2016
Chinese companies may get preferential treatment for contracts to build a £3.2 billion entertainment resort in Kent in exchange for future investment.
David Testa, chief executive of London Paramount, said Far East investors were delaying putting in cash for the theme park and hotel complex until they could discuss joining the supply chain for the project.
So far, 900 companies have registered an interest, many of them in Britain.
However, he said the decision to leave the EU had given a boost to the plans as investors predicted a growth in ‘staycations’ post-Brexit.
It comes as newly-filed accounts show the Kuwaiti backers of the scheme ploughed
£35 million into the planning process for the project last year.
London Resort Company Holdings, the developer of the resort set to be built on the Swanscombe Peninsula between Gravesend and Dartford, announced an initial investment of £100 million from Chinese investment group SinoFortone last October.
Mr Testa said any future funding from the company would come after planning had been approved – an application is not expected until next year – despite initial hopes more money would be available sooner.
He said: “The idea was to see what could be done pre-planning. Interest is still there on their side, but to fund it we would need to give a lot of work we need to do to Chinese companies.
“The opportunities for that are very limited pre-planning. Post-planning there is a much broader canvas to discuss it.”
The resort has financial backing at least until it submits a planning application.
It is being bankrolled by its 99.5% shareholder KEH Group, owned by Dr Abdulla Al-Humaidi, the Kuwaiti chairman and owner of Ebbsfleet United Football Club.
Mr Testa said growing numbers of potential international backers were considering the UK as a ‘safe haven’ for their cash.
He said institutional investors and sovereign wealth funds thought the project was more attractive because the falling value of the pound since the EU referendum would deter holidaymakers from going to Europe.
"Interest is still there on their [the Chinese] side, but to fund it we would need to give a lot of work we need to do to Chinese companies..." - David Testa, London Paramount
Eight to nine million visitors are expected in the first year after opening in 2022, rising to
14 million when up and running.
KEH is looking to get 30% to 40% of the £3.2 billion needed to build the project in equity – and the rest in debt.
Mr Testa said: “The UK is going to still be seen as a safe haven for international investors.
“This sort of project is going to be seen as even more attractive than before because there is no doubt tourism is going to benefit from a weaker pound.
“That will allow international visitation to increase, but also it means UK holidaymakers will not want to go to the EU, where their pound isn’t worth as much. They will look to stay in the UK.
“The staycation was first seen after the financial crisis in 2008 and we will see more and more of that going forward.”
Mr Testa said the weak pound was not all good news as it meant the cost of construction materials was likely to rise.
He added: “I think if you take a longer view, overall it will be net positive.”
The developer of the Paramount resort has increased the number of jobs it predicts the project will create once it opens in the summer of 2022.
It has revised up its estimate from 27,000 to 33,000, of which 13,000 would be directly within the resort, the equivalent of 10,000 full-time roles.
The other 20,000 are expected to come from supply chain and service requirements – the equivalent of 16,000 full-time jobs.
Of these, 55% are expected to come from Dartford and Gravesham and another 25% from the rest of Kent.
During the construction phase, due to take place from 2018, it will create the equivalent of more than 2,000 full-time jobs. It is estimated 10% to 15% will come from Dartford and Gravesham and another 20% to 25% from within a 25- minute drive.
Another 40% to 45% of roles will go to people within a 25- to 45-minute drive and 10% from further than 45 minutes away.
“This sort of project is going to be seen as even more attractive than before because there is no doubt tourism is going to benefit from a weaker pound..." - David Testa, London Paramount
A water park has been scrapped from plans for London Paramount after its developer opted to increase the amount of car-parking at its hotels.
In the first year after opening it will have 1,600 to 1,700 hotel beds, growing to 5,000 as it becomes fully developed.
However, proposals for a water park will be replaced with a large indoor swimming pool connecting the hotels.
Chief executive David Testa said: “From the 2014 vision, which had more urban-style hotels, we are looking to have more resort-style hotels which take up a little bit more space.
“The 2014 version didn’t allow enough space for hotel-related car-parking. Under our current plans, each hotel has its own dedicated car-parking area.
“It’s a bigger footprint for the resort hotels. We don’t have a dedicated pool complex now but there will be a large indoor swimming pool connecting two or three of the hotels. That is one idea we are looking at.
“We are not considering that sort of water park idea, which I don’t think we have the footprint for any more.”
More by this authorChris Price