Malaysians to save Battersea after buy

Malaysia’s SP Setia Bhd and Sime Darby Bhd said they plan to develop 8 billion-pounds ($12 billion) worth of homes, offices and shops on the south bank of the River Thames after buying London’s Battersea Power Station site from liquidators for 400 million pounds.

The investors will retain the Art Deco power plant, according to an e-mailed statement by the companies in Kuala Lumpur today.

The building, with four iconic 350-foot-high smokestacks, has been vacant since it closed in 1982.

“The development will be the catalyst for strong rental and capital growth in the area,” Liew Kee Sin, SP Setia’s group chief executive officer, said in the statement.

Previous plans for the site, 2.2 miles (3.5 kilometers) from the House of Parliament, included a theme park and a mall that would have been suspended between the chimneys.

At least 10 bids were submitted for the building, including one from Russian billionaire Roman Abramovich’s Chelsea Football Club Ltd, a person familiar with the matter said in May.

SP Setia, the Southeast Asian nation’s biggest publicly traded property developer by sales, and Sime Darby will each take a 40 percent stake in the project.

The Employees Provident Fund, Malaysia’s biggest pension fund, will hold the remainder, they said.

Development will be carried out over 15 years with expected total sales of as much as 8 billion pounds, according to the statement. Construction is estimated to cost 200 million pounds in the first two years, it said.

Urban Redevelopment

“The Battersea project represents an excellent opportunity for us and our partners to expand our footprint into a key international market,” Mohd Bakke Salleh, Sime Darby’s group chief executive, said in the statement.

The project will be part of the largest urban redevelopment area of central London. The Malaysians bought the London landmark, Europe’s largest brick building, after its owner failed to pay debts and was put into administration.

Planning permission was granted to Real Estate Opportunities Plc, controlled by Irish developer Treasury Holdings Ltd., last year for a 5.5 billion-pound redevelopment of the power station.

SP Setia tried to buy the debt related to the power station in November for 262 million pounds and the offer was rejected.

Creditors led by Lloyds Banking Group Plc and Ireland’s National Asset Management Agency put the REO units that owned the site into administration, a U.K. type of bankruptcy reorganization, in December after they failed to make loan payments.

By Business Times