Ownership of London's emblematic Battersea Power Station site, bought in 2012 by a Malaysian consortium for redevelopment, is being re-organised. The nation's two largest pension funds PNB Permodalan Nasional Berhad and Employees Provident Fund Board, already invested, are to pay £1.6bn (€1.8bn) to buy the main office building, earmarked as Apple’s new London HQ.
Malaysian developer S P Setia told the Malaysian stock exchange last week that to de-risk the development and ease financial pressure on shareholders amid rising construction costs, a wholly-owned subsidiary of Battersea Project Holding Company entered an agreement with PNB and EPF to explore a potential sale, for £1.608bn, of the main building. In a release it said the investment by the two funds will not change shareholdings in the project, in which it and Malaysian peer Sime Darby each owns 40%, and EPF has 20%. PNB already indirectly owns a stake through its 55% shareholding in SP Setia; it also has a stake in Sime Darby.
The Malaysian consortium bought into the project in 2012, and the London borough of Wandsworth soon afterward granted planning permission for Phase One. The UK government also confirmed its support for a £1bn (€1.3bn) loan and a guarantee to extend the Northern Line underground to Nine Elms and Battersea Power Station.
The project covers 15.8 ha. and includes 4,239 new homes along with the renovation, for office and mixed use of the Grade II listed Power Station - the largest brick building in Europe and one of the most significant surviving examples of Art Deco architecture. The apartments include luxury units ranging from £800,000 for a studio atop the former power station to £4m for a four-bedroom flat, according to the British press.
With residential pre-sales of over 90% and the entire 43,600 sqm of office space in the Power Station building let out to Apple, the expression of interest from PNB and EPF to be long-term holders in the project was very timely, SP Setia said. The proposed transaction will, "enhance investment returns and allow the investor to capitalise on arising opportunities as a property developer while continuing to play a significant role in the overall development of the project."
Phase 1 of the development - Circus West Village which consists of 12 residential blocks and nearly 10,000 sqm of restaurants, shops, offices and leisure space - has been completed and was handed over to purchasers and tenants last year, it added. The power station building itself will, on completion, be about 25% residential use, including over 250 apartments. A further 25% is the new office space which has been pre-let to Apple in one of London’s largest ever office pre-lets.
Occupying six floors of the central Boiler House inside the historic edifice, the US technology giant plans to relocate 1,400 employees from existing offices around London.
Battersea Power Station first opened in 1933 but, due to the outbreak of World War II, did not complete until 1953. During operations, it supplied one-fifth of London’s electrical power until it finally stopped producing power in 1983. Prior to the Malaysian conglomerate's acquisition it was the object of a number of failed schemes aimed at preserving the iconic structure.