Malaysian consortium buys £400m Battersea Power Station

A group comprising SP Setia, Sime Darby and the Employees’ Pension Fund of Malaysia have exchanged contracts to buy the iconic London property from receivers.

A group of investors from Malaysia has agreed to buy the famous Battersea Power Station site in London for £400 million (€501 million; $620 million).

The consortium, comprising developer SP Setia, multinational Sime Darby, and the Employees’ Pension Fund of Malaysia, have exchanged contracts to buy the iconic London property on the banks of the River Thames from administrators Ernst & Young.

According to a statement, the derelict power station, occupying 39.1 acres and described by selling agent Knight Frank as ‘the last significant piece of prime central London remaining for redevelopment’ attracted interest from investors from as far afield as Kazakhstan, South Africa, China, Indonesia and Brazil.

Stephan Miles-Brown, head of residential development at Knight Frank, said there was now a skilled and extremely professional purchaser to “take on” the site and “produce the best result for London”.

Plans for Battersea Power Station have been reincarnated on a handful of occasions but since its final power production in 1983 it has not been occupied. It is currently the subject of a planning licence to develop 3,500 homes and 1.7 million square feet of office space, as well as for a hotel and shops. It will also provide London with two new Underground stations that will be extensions to the Northern line.

The site has had a chequered ownership history with a number of doomed schemes falling by the wayside, the most recent of which was laid by Irish group, Real Estate Opportunities (REO). That group announced on 12 December last year that Ernst & Young had been appointed administrators to four subsidiaries owning the station and surrounding land after it succumbed to the credit crunch.

The vehicle that has now agreed to buy Battersea Powersea Station is called Battersea Project Holding Company and it is being funded by SP Setia and Sime Derby and Jersey-registered KWASA Global buying the site. KWASA is a wholly-owned subsidiary of Employees Provident Fund. The pension fund is reportedly taking a 20 percent stake via KWASA while SP Setia and Sime Derby will own 40 percent each in completion of the deal.

RREEF and property agent, Jones Lang LaSalle, advised the consortium on its bid.