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Thursday, September 6, 2012

Battersea project set to take off April next year

SP Setia president is optimistic that the Battersea redevelopment would fetch good sales given that it is located in Chelsea, which is relatively London's most expensive area.

Redevelopment of the iconic Battersea Power Station (BPS) here by a Malaysian consortium is expected to begin in April, after a soft launch in January.

The consortium comprising Sime Darby Bhd, SP Setia Bhd and Employees Provident Fund (EPF), on Tuesday took ownership of the 15.78ha site after paying STG400 million (RM1.98 billion) to BPS liquidators.

About STG300 million (RM1.48 billion) of the payment came from a bridging loan by CIMB Bank, while the remaining was from the stakeholders' own cash based on their respective equities in the new joint venture called Battersea Project Holding Co Ltd (BPHCL), senior Sime Darby and SP Setia executives said.

Sime Darby and SP Setia each own a 40 per cent stake in BPHCL, while the balance is held by EPF.

"As of 10.25am today, we are the owner of this old power station. We have worked so hard on (getting) the site," SP Setia president and executive officer Tan Sri Liew Kee Sin told Malaysian reporters here.

There were several failed attempts to redevelop the site by previous owners but Liew is confident that the consortium will not fail like others before it. For one, the consortium's scheme comes with good public amenities and transport solutions.

"None of the schemes before this had a solid public transport solution. That is why we firmly believe the project can become a reality," he said.

Liew is optimistic that the Battersea redevelopment would fetch good sales given that it is located in Chelsea, which is relatively London's most expensive area.

He cited that the recently-completed Chelsea Wharfbridge project nearby had fetched sales of STG1,000 (RM4,940) per sq ft (psf) for its apartments, while certain developed areas in Chelsea can fetch as high as STG2,000-STG3,500 (RM9,880 to RM17,290) psf.

Battersea Power Station, with its four iconic 350-foot (105-metre) chimneys, has been dormant since 1983, and the consortium expects the project to have a gross development value (GDV) of STG8 billion (RM39.5 billion) over its planned 15-year redevelopment.

Sime Darby chief operating officer Datuk Abdul Wahab Maskan suggested that the consortium had paid reasonably cheap for the site given that the STG400 million (RM1.98 billion) price tag is equivalent to just five per cent of the project's expected GDV.

"This is low compared to the land cost in other cities. In Kuala Lumpur for example, the land cost accounts for about 25 per cent of the GDV," Abdul Wahab said.

The Battersea site was placed into administration with Ernst & Young last year after Lloyds Banking Group and Ireland's National Asset Management Agency called in debt against the struggling Irish developer, Real Estate Opportunities, which controlled the asset.

The Grade II listed former power station is situated on the south bank of the River Thames and is within the larger 119-hectare Nine Elms corridor regeneration, BPHCL officials said.

The BPS is arguably the last significant piece of prime central London land remaining for redevelopment, BPHCL chief executive officer Robert Tincknell said.

The Wandsworth Council had granted the planning consent (equivalent to development order in Malaysia) for a masterplan for the power station redevelopment in December 2010, Tincknell noted.

The approved scheme comprises 3,500 private and affordable homes, 160,000 square metres of new office space, 56,000 sq m of retail space and nine hectares of public realm.

The plan includes a sustainable mixed development comprising residential and commercial units while the power plant with its chimneys will be conserved and preserved, Liew said. There will also be a hotel and two new London underground stations, which would extend from the Northern Line.

By Business Times

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