LONDON: The Malaysian consortium comprising property developers S P Setia Bhd, Sime Darby Bhd and the Employees Provident Fund becomes the official owner of the 39.5-acre Battersea Power Station site after paying £400mil (RM1.99bil) on Tuesday with a £300mil bridging loan from CIMB, said S P Setia president and CEO Tan Sri Liew Kee Sin.
The remaining £100mil was paid as per the equity stake of each of the three consortium partners, with both S P Setia and Sime Darby forking out 40% each and EPF the remaining 20%.
This will be the first and the largest property development for both Sime Darby and S P Setia in Britain with a gross development value of £8bil (RM39.8bil).
The completion of the purchase saw the boards of Sime Darby and S P Setia and a team from EPF descending on London along with analysts and the press.
Minister in the Prime Minister's Department Datuk Seri Idris Jala and London mayor Boris Johnson gave speeches to mark the official cocktail held on Wednesday evening.
At an earlier press interview on Tuesday morning British time, Liew said “although the consortium may not have the experience in this side of the world, we have the British technical team to see to it while we provide the concept and the funding.”
A newly-minted British company Battersea Power Station Development Co Ltd has been formed “a few days ago” with a logo of the Battersea Power Station and its four chimneys. This team from Battersea Power Station Development Co comprises the technical, management and financial team from those previously involved in the Battersea Power Station when it was owned by Irish firm Real Estate Opportunities (REO) before the site was placed under administration last year.
The newly-formed company's chief executive officer Robert Tincknell, who has been employed by REO for the last 10 years, will manage the project.
“Now that the project is fully paid, the next step is to work out the financing structure, whether it will be in Sterling pounds, whether it will be issuing of sukuk and seeking the best rates among banks,” said Liew.
The financing team headed by Battersea Power Station Development Co chief financial officer Simon Murphy and those in Kuala Lumpur “will find the best structure going forward for the long term,” said Liew.
“We will enhance the value of the site,” he said.
What is important at this juncture is that the site is purchased clean of liabilities and it comes with an approved planning consent. The master plan is being done by renowned award-winning architect Rafael Vinoly.
The master plan will feature 3,400 new homes, 160,000 sq m of new office space, 56,000 sq m of retail and 9 ha of public parks and spaces.
Besides the long-term financing structure, the next step is to plan the development of phase one.
This will comprise the development of the residential units next to the power station and the refurbishment of the power station itself.
The units will be officially launched next year with construction to begin in April.
On comments that the deal hinges on contributions to British infrastructures, Liew said that other than the purchase price of £400mil, the consortium had to contribute £211mil over the duration of the 10- to 15-year project for infrastructure works.
“This is to be paid on a staggered basis as we go along,” he said, The first portion of £38mil will be paid in two equal portions of £19mil each in 2014 and 2015.
A major portion of £203mil will be for the extension of the Northern Lines, which involves the development of two stations with one of them at the power station site itself and the remaining £8mil for other infrastructural works.
He said this contribution towards infrastructure works was not due only from the Malaysian consortium but from other developers whose projects would benefit from the extension of the Northern Line calculated at a certain rate in proportion to the land they own and planned for development.
Liew said the fact that planning consent was already given by the British authorities and that there were already plans to extend the Northern Line close to the power station by the local authorities were huge plus factors.
Other features which add premium to the site are the nearby 200-acre Battersea Park, River Thames frontage and Chelsea and Sloan Square located on the other side of the Chelsea Bridge.
The site is also part of Vauxhall Nine Elms' largest urban regeneration project in central London.
Sime Darby president and group chief executive Datuk Mohd Bakke Salleh said the support given by the British government was tremendous.
“The British are very keen to develop and regenerate the site and this support will work for all parties concerned,” he said.
On who would be the target purchasers, Bakke said the project would be sold to everybody.
“London has a huge global market. The fact that the eurozone is facing some challenges at the moment has also enhanced the safe haven aspect of British properties,” he said.
By The Star
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