JANUARY 19, 2018 8 A Malaysian fund has agreed to buy a stake in London’s Battersea Power Station in a deal that values the building at £1.6bn.
Permodalan Nasional Berhad, a fund manager with £50bn of assets under management, will own the building jointly with Employees Provident Fund of Malaysia, which already owns a fifth of the wider Battersea development site.
PNB will buy its stake in the building from the Malaysian developers Sime Darby Property and SP Setia, which between them own 80 per cent of the 42-acre site.
The fund manager is a majority stakeholder in both developers, and therefore already indirectly owns a large proportion of the Battersea development.
An undisclosed percentage of the expected full sale price for the grade II* listed building will be paid to the developers in stages through construction, with the balance paid on completion.
According to people familiar with the matter, the cash injection will allow the development of the building, which will host Apple’s new UK headquarters, to be completed amid rising costs.
The Battersea Power Station building itself — which occupies about six acres of the site — had been derelict for roughly 30 years when the site was bought in 2012 for £400m by the consortium from Malaysia.
At the time, the group said it believed the whole development would be worth £8bn by the time it was completed in 2024. The refurbishment of the power station, which supplied one-fifth of London’s electrical power when in operation, is set to be completed in late 2020.
About a quarter of the building will be developed as homes, with a further quarter dedicated to offices. The remainder will be a mixture of retail and leisure space.
The developers are considering changes to their plans for the site following a downturn in the market for luxury homes. As many as 4,000 homes are planned for the 1930s’ landmark site, but that might be reduced to make way for extra office space.
In June, the developers of the scheme won approval to cut their affordable housing commitment by 40 per cent — citing a rise in building costs of more than 11 per cent over a year — as well as faltering sales values for luxury homes.
Battersea reduced its affordable housing commitment to between 9 and 15 per cent of all the housing produced on the scheme, subject to an “end of scheme review”.