The iconic Battersea Power Station is being bought for £1.6 billion, making it the biggest property deal to be carried out in the UK.
It is being bought by Malaysian sovereign wealth fund Permodalan Nasional Berhad (PNB), alongside Employees Provident Fund of Malaysia (EPF), which controls the private sector pension pot.
The deal values it ahead of the UK’s biggest ever property transaction – the £1.28 billion sale of the “Walkie Talkie” skyscraper in the City last year, which was acquired by Chinese investors.
The buyers will provide a cash injection that will allow Battersea Power Station’s restoration to be finished.
The mixed use regeneration project has been hampered by increased costs and delays, but once completed will include retail and leisure units, commercial space and 250 apartments, which have mostly been sold.
The sale will transfer ownership of Battersea Power Station, but not the 42 acre site around the building.
It is being bought from Malaysian developers Sime Darby Property and SP Setia, in which PNB is a major shareholder and so indirectly owns part of the development.
EPF owns 20% of the entire development and will switch from a developer to an asset manager in the reorganisation.
Planning documents released last year revealed that due to rising and unexpected costs of restoring the Grade II listed building, and lower demand for luxury homes, the developers were forecast to make less than half of their original return target.
This led to the development slashing the number of affordable homes it would build.
A company source told the Guardian the deal was not linked to reported financial difficulties on the project, but rather a benefit of Apple’s decision to base their UK headquarters in the former coal-fired power station’s central boiler house from 2021, which has guaranteed a future income stream.
The project’s current affordable housing provision would be unaffected by the proposed deal, the source added.
PNB and EPF will own phase two of the bigger development project, which includes the heritage building, new headquarters for Apple and apartments. The first phase, Circus West Village, has been completed. Sime Property and SP Setia remain the developers of the other five phases of the development, which is due to be finished by 2028.
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 spokesperson added.
Battersea Power Station opened in 1933, but the generator was not completed until 1953 after construction was delayed by the Second World War.
The power station generated 20% of London’s electricity supply at its peak, until it stopped producing power in 1983.
Battersea Power Station was bought for £400 million in 2012.
DealMakerz hopes the deal will ensure there are no more delays in the regeneration of Battersea Power Station.
It promises to be an exciting development, with luxury accommodation and leisure facilities that further boost the attractiveness of the area.