Battersea Power Station is to be sold in a £1.6bn deal which protects the redevelopment of the area from the costs of its restoration and conversion.
Permodalan Nasional Berhad and Employees Provident Fund of Malaysia will jointly buy the Battersea Power Station building, into which Apple will move their UK headquarters.
Battersea Power Station Development Company (BPSDC) confirmed that the Battersea Project Holding Company has approved what it describes as the commencement of “an exclusive transaction aimed at reorganising the ownership of The Power Station building to create a long-term asset management and ownership structure”.
The shareholders in the proposed new structure will be Malaysian investors, Permodalan Nasional Berhad (PNB), one of the largest asset management companies in Malaysia and the Employees Provident Fund of Malaysia (EPF) who, through their holdings in the current developers and directly, already own around 70% of the entire project.
PNB and EPF are long term investors with existing real estate exposures in the UK market. The transaction sum estimated at £1.6bn is, say BPSDC, subject to further due diligence and negotiations, and will be paid in stages through the rest of the construction phase of The Power Station building.
A BPSDC spokesperson said: “The Battersea Power Station building would provide both investors with a unique investment opportunity to own an iconic development in the heart of London. With the conclusion of the proposed transaction, BPSDC will remain the active manager of the development. This creates a solid platform that will ensure the protection, active management and control of the historically important building are maintained.”
The Battersea Power Station Grade II* listed building is currently approximately half way through a comprehensive refurbishment and reconstruction that is scheduled to complete in late 2020. The five-year project is the largest historic building project ever undertaken in the UK and when finished, will become the heart of the wider 42-acre mixed use scheme.
On completion, the building will be approximately 25% residential use including over 250 apartments, the majority of which have already been pre-sold. A further 25% is new office space which has been pre-let to Apple. The remaining balance of the building will be retail and leisure accessed from the two historic turbine halls, the leasing programme of which will commence this year.
A BPSDC spokesperson added: “The Malaysian shareholders purchased the site in September 2012 and have since made significant progress including the successful completion of the first phase of the development which is now home to over 1,000 residents and a collection of independent retailers and restaurateurs. The proposed transaction reflects the shareholders’ long-term commitment to Battersea and London.
“The proposed new structure will not affect the shareholdings of Sime Darby Property, S P Setia and EPF in the Battersea Project Holding Company (the joint venture company which is the holding company of the Battersea project). Discussions are at a preliminary stage and a further announcement will be made in due course.”