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Heathrow backers confirm £650 million fund for construction projects

Heathrow backers confirm £650 million fund for construction projects

Heathrow Airport has secured £650 million from international investors for new construction work, in a move widely seen as a vote of confidence in Britain and London post-Brexit.

The money will help pay for the expansion of Terminal 2 and the building of a new access tunnel, which will take road traffic to the area around the Central Terminal.

Investors including Ferrovial, Qatar Investment Authority, Caisse de dépôt et placement du Québec, GIC, Alinda Capital Partners of the United States and China Investment Corporation confirmed the funding, giving the airport a key boost. Detailed plans for the new work will now be presented to shareholders for approval.

Heathrow chief executive John Holland-Kaye said: "The planned investment is great news for Heathrow passengers and for Britain - it will help us build on our success as passengers' best airport in western Europe and further improve resilience at the nation’s hub."

With Heathrow having been chosen as the site for an expansion of the runway capacity of London and the south-east, the location is already set to see major work taking place over the next few years, albeit with various legal challenges to the runway decision expected to stymie progress.

However, such development work might be of little use were international investors to turn away from London after Brexit, as this would reduce demand for business travel, even if tourist numbers remained high. For that reason, the latest announcement suggests sentiment in the global business community remains favourable to the UK capital.

This factor could have a positive effect on commercial construction in the years ahead. The latest Markit / CIPS survey suggested this segment of the industry is now in decline as the uncertainty over Britain's economic future means some are waiting to see what happens before parting with their cash.
 
However, many may have simply delayed spending the money rather than cancelling their plans, so any sign of a good economic deal for Britain could persuade them to invest after all.

Image: Mark Pawlak for Adfero

 

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