Battersea Power Station, the towering brick structure on London’s river Thames, has been bought for GBP 400m by a consortium of Malaysian companies in the latest attempt to turn the property into a commercial venture.
Empty since 1983, Battersea Power Station was on Thursday described by one of the three Malaysian companies involved, SP Setia, a property group, as “undoubtedly London’s most important and central urban regeneration site”.
Its iconic white chimneys and brick power plant would be “conserved and preserved” as part of a mixed-use residential and commercial development in a 15-year project that would ultimately cost GBP 8bn, the companies said.
The other consortium members are Sime Darby, one of Malaysia’s biggest palm oil plantation operators, and the Employees Provident Fund, the country’s largest pension fund.
The involvement of Malaysian investors in a project that has seen several failed attempts to commercialise the power station is a sign that cash-rich Asian investors are continuing to invest heavily in London property.
Mohd Bakke Salleh, Sime Darby’s chief executive, said London was “a strategic and important target destination for property investment and development”.
The three parties have agreed a joint venture under which Sime Darby and SP Setia each have 40 per cent of a new holding company, with EPF owning the remaining 20 per cent.
The consortium was last month picked by administrators as preferred bidder for the 39-acre site, sidelining efforts by Roman Abramovich to secure it to build a new stadium for Chelsea Football Club, which the Russian billionaire owns.
Liew Kee Sin, chief executive of SP Setia, said the project, part of a redevelopment of the Vauxhall, Nine Elms and Battersea areas, would create 25,000 jobs.
“The power station building will be at the heart of it all, so it is important that this iconic and renowned Grade II-listed structure is properly restored and brought back to its old grandeur,” he said.
Redevelopment of the site will be carried out under a plan drawn up by architect Rafael Vinoly, whose New York-based practice is also working on a new institute of mathematics at Oxford University.
The construction of an extension of the Northern Line underground network would be “fundamental to the success of this regeneration project”.
“As such we intend to actively support Transport for London and Wandsworth council [the local authority] in their efforts to carry out and make this essential infrastructure a reality,” Liew added.
Sime Darby said it had become involved in order to strengthen its property division by “embarking on niche developments in high-growth international markets”. The group said it wanted its property unit to generate 20 per cent of group income from overseas operations, without giving a timeframe.
SP Setia said it had invested as a way of becoming a “global property player”. It already has investments in Vietnam, Singapore, Australia, China and Indonesia.
Knight Frank and Ernst & Young Real Estate Corporate Finance advised on the sale.