Fears grow for London port project
Big names slow to commit to the logistics park at heart of £1.5bn London Gateway superport
Concerns are mounting over the commercial strength of what will be Europe's biggest logistics park, itself a major selling point of the £1.5bn London Gateway superport now being built 25 miles from the capital.
The park has yet to secure anchor tenants even though the port, which will take up a 2.7km stretch of the Thames, is due to open in the last quarter of this year. Port owner DP World – part of the Dubai World empire that was so battered by the global economic crisis – has been in negotiations for about a year with the retail giant Marks & Spencer and freight group Uniserve.
However, contracts for them to take huge warehouse space at the park have still not been signed. It was widely believed that these talks would be completed in 2012, but firms are increasingly cautious about committing themselves to major projects as the financial crisis nears its sixth anniversary.
Although London Gateway is not dependent on the logistics park opening at the same time as the port, it has been used as a unique selling point to attract companies that want to distribute their wares efficiently once they arrive on the Essex coast.
The DP World website claims that "London Gateway Logistics Park is acknowledged by many in the industry as the best distribution site in the UK, and will be Europe's largest logistics park, providing some 9.25 million square feet of accommodation, primarily for the distribution sector".
A commercial property source suggested that firms may be reluctant to sign on the dotted line while the park is still unproven. However, major tenants are needed in order to attract the smaller firms that would fill up the rest of the park.
The source added: "Occupiers already have tried and tested distribution routes and they've gone through a hell of a bad time [with the economy]. Why commit to a new development today and have all the inevitable teething problems?"
The Government is desperate for London Gateway to be a success because it will create 12,000 jobs at a time of such economic gloom. However, it also threatens to take work away from the port of Felixstowe, which is just 75 miles away.
In its annual results last week, DP World named the port as one of four major developments it has around the globe. A spokesman for London Gateway said: "We are in commercial negotiations with a number of parties over the logistics park."
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