Malaysian consortium beats Chelsea FC in bid for London icon

Malaysian developers SP Setia and Sime Darby Property have become preferred bidders for the iconic Battersea Power Station in south-west London. The two companies signed an agreement yesterday to pay £400 million ($620 million) for the site, beating offers from more than a dozen rival bidders that included Chelsea Football Club.

The consortium is expected to develop the previous owners’ plans for converting the 1930s art deco building into 3,400 new homes at a cost of $8.5 billion. A statement to Kuala Lumpur’s stock exchange yesterday described a “sustainable multi-use real-estate regeneration project that will provide economic impetus for the creation of a new vibrant centre for south-west central London”.

The auction is being arranged by Ernst & Young on behalf of lenders to Treasury Holdings, the Irish owner of the property. Treasury had been trying to sell the property itself to keep the receivers at bay, but Ireland’s National Asset Management Association (Nama) and Lloyd’s Bank took over the property in December and launched an auction for the property — a move that Treasury is still contesting.

The power station, which is Europe’s biggest brick building, was decommissioned in 1983 and has remained a popular London landmark. However, it has been left as an unused shell for most of the past 30 years despite several attempts to renovate the property, which is in a prime location on the River Thames, across the water from Chelsea.

“The plans will preserve the facade of the historical power plant with its iconic chimney stacks,” said the consortium, which has also committed to build a new underground station as part of a proposed extension of the London Underground’s Tube network.

The Malaysian consortium has up to 28 days to conduct further due diligence and negotiate terms for the acquisition. SP Setia and Sime Darby Property were advised by RREEF, a fund manager owned by Deutsche Bank.

Russian billionaire Roman Abramovich had hoped to develop the site as a new 60,000-seat stadium for Chelsea FC, but for once he was outbid by rivals with deeper pockets.