x Abu Dhabi, UAETuesday 25 July 2017

London power players needed for Battersea station

London's landmark Battersea Power Station is being marketed to Abu Dhabi sovereign wealth funds as part of a global campaign to find a developer for the £5 billion regeneration project.

The Battersea Power Station, Europe's largest brick building, has remained derelict since 1983 after plans to redevelop the site unravelled. Reuters
The Battersea Power Station, Europe's largest brick building, has remained derelict since 1983 after plans to redevelop the site unravelled. Reuters

London's landmark Battersea Power Station is being marketed to Abu Dhabi sovereign wealth funds as part of a global campaign to find a developer for the £5 billion (Dh28.89bn) regeneration project.

Knight Frank, a global property consultancy, is handling the sale of the 15.7-hectare freehold site, which is one of the biggest undeveloped regeneration sites in the UK.

The first bids are due in May and development consortiums are now being formed that are likely to include sovereign funds, said Nick Thomlinson, the chairman of the Knight Frank Group.

Mr Thomlinson was in the capital yesterday to sign a partnership deal with Abu Dhabi National Properties (ADNP), a unit of National Bank of Abu Dhabi (NBAD).

The agreement will help clients of the bank, which include sovereign funds, to tap property investments in London and other global property markets served by Knight Frank. ADNP manages a portfolio of 10,000 units in the emirate.

The former power station on the south bank of the River Thames is one of the most distinctive landmarks of the London skyline and is featured on the cover of Pink Floyd's 1977 album Animals.

But it has remained derelict for three decades after a succession of plans to redevelop the site unravelled because of planning and funding issues. As a listed building, any redevelopment would need to preserve its brick exterior and four chimneys.

The power plant has had a succession of owners since it was decommissioned in 1983. Now it is back on the market after a plan to develop the site by Ireland's Treasury Holdings collapsed.

Mr Thomlinson said he was "very confident" of achieving a sale of the development, which has planning permission from Wandsworth Council, for homes, shops, offices and a leisure development.

"It's got all the ingredients now," said Mr Thomlinson. "It's got the political will, the mayor wants it to happen, the government wants it to happen, everyone wants it to happen. So I would be amazed if it doesn't."

Knight Frank already works with a number of sovereign funds on London property deals, including the Abu Dhabi Investment Authority (Adia).

Mr Thomlinson said that he had not met the sovereign wealth fund during his visit to Abu Dhabi but that Knight Frank had discussions with local sovereign investors about the Battersea project.

"You name them, we've spoken to them. It's bound to be a consortium. It will need some UK developer expertise and almost certainly some sovereign wealth funds."

Adia was unavailable for comment.

The new partnership between Knight Frank and NBAD comes as the London property market attracts a wave of Gulf investment seeking stable long-term returns amid regional political instability.

"We deal with a lot of government-related entities, and Knight Frank has already started working with those government-related entities on local real estate advisory," said Graham Hallett, the general manager and managing director of ADNP.

The planning permission for Battersea Power Station, Europe's largest brick building, sets out its full restoration at a cost of £150 million in addition to a £200m contribution towards an extension to the London Underground's Northern Line that would connect the site with the Tube network.

Gulf funds already own billions of dollars worth of central London property, with Qataris especially active in the market in recent years.

scronin@thenational.ae