Buying a piece of London's history

BATTERSEA Power Station, with its 300ft-high high chimneys, is one of London's most enduring landmarks. It will receive a new lease of life under its new Malaysian owners, a consortium made up of property developers, S P Setia and Sime Darby, as well as the country's national provident fund, the Employees Provident Fund. The joint-venture company for the project is called The Battersea Power Station Development Co.

The Malaysian group has proposed an £8 billion ($15.7 billion) mixed-use development on the 40-acre site master-planned by world-renowned Rafael Viñoly. When completed, the project will have more than 3,400 residences, close to 700,000 sq ft of retail and F&B space, and more than 1.7 million sq ft of office space, as well as hotels, leisure and entertainment facilities.

The first phase of the Battersea Power Station redevelopment will be launched for sale in a series of international road shows — starting with London on Jan 10, Singapore on Jan 17 and Hong Kong the week after. The project had previewed in Malaysia in late December, and response was said to be strong.

In Singapore, more than 10 units have already been reserved in the lead-up to the launch at St Regis Hotel next weekend, says Doris Tan, Jones Lang LaSalle's director of international property services, the exclusive marketing agent for the project.

The first phase of the project, called Circus West, contains a total of 850 residences, with a mix of studios, one-, two- and three-bedroom apartments, as well as townhouses and penthouses. Prices start from £338,000 for a studio unit to £894,000 for a three-bedroom apartment. Penthouses with direct views of the River Thames are said to have price tags of up to £6 million.

Besides residences, Circus West, which is targeted for completion in 2016, will also comprise offices, shops, leisure facilities and a hotel. There will be guest suites, for lease exclusively to residents who need additional room for house guests. The project will include large public open spaces and a six-acre riverside promenade, providing access to Battersea Park and Chelsea via the River Thames Walk.

"Chelsea is just across the river, and properties there are priced at £3,000 psf," says JLL's Tan. "At Battersea, you're buying an apartment at £1,000 to £1,200 psf. That's the attraction."

Currently, the nearest underground station is the Vauxhall station less than a 10-minute walk away, according to JLL. With the proposed Northern Line Extension, there will be two new underground stations, namely Nine Elms and Battersea Stations, which will link the Battersea Opportunity Area to the City and West End via Kennington Station, which is expected to open by 2019. The Battersea project is located within the Nine Elms Opportunity Area, the largest regeneration scheme in London.

The Battersea Power Station was designed in the 1920s by Sir Giles Gilbert Scott, who also designed London's famous red phone box. The power station was operational from 1933, and shut down 50 years later. In 1980, it was designated a listed building. Over the last three decades, there have been various proposals to revive the 38-acre site. These included proposals to turn it into Europe's largest leisure complex in the 1980s, the world's largest multiplex cinemas in the 1990s, and Parkview International of Hong Kong's master plan to redevelop it into a massive mixed-use scheme in 2004.

Last year, the property was placed into administration, and put up for sale by the administrators, Ernst & Young. Chelsea Football Club and its owner Roman Abramovich had reportedly submitted plans to turn the site into a new 60,000-seat stadium. However, the administrators endorsed the proposed plan by the Malaysian consortium, which submitted a bid of £400 million for the site. The consortium will also start the regeneration of the derelict power station, which has lain dormant for close to 30 years. Most of the interested buyers are looking at the opportunity of buying into a landmark scheme, which is very rare, observes Tan. "This is one of London's most iconic projects," she adds. Tan reckons investors can expect gross rental yields in the 4% to 5% range.

This story first appeared in The Edge Singapore weekly edition of Jan 14-20, 2013.

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