Battersea Update:

Following our blog post in December of last year reporting on the difficulties faced by REO, the owners of Battersea Power Station the administrators and receivers Ernst & Young have made a significant announcement today.

Malaysian investors SP Setia and Sime Darby Property have been confirmed this morning as the preferred bidders for the 38 acre site of the old power station in south London.

An exclusivity agreement has been entered into with the Ernst & Young, with a 28 day window to conduct due diligence investigations and contract negotiations prior to going ahead with the purchase of the site for £400m.

SP Setia and Sime Darby Property said that their plans “involve the development of 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”.

They have indicated that they will preserve much of the façade and the iconic chimneys and have also committed to construct a new underground station, forming part of the extended Northern Line.  This move is a key initiative in the success of the regeneration project.

There is much wailing and gnashing of teeth from Chelsea supporters this morning as Mr Abramovich and Co were also thought to be in the running for a shot at redeveloping the site.  They may be off for an early bath, but you never know, things can always change! 

Low Power at Battersea

The owners of Battersea Power Station, Real Estate Opportunities Plc had subsidiary companies placed into administration when a request by the banks, intent on recovering the £502 million they are owed, was acceded to in the court. 

Ernst & Young have been appointed to administer the affairs of Battersea Power Station Shareholder Vehicle Ltd. including REO Power Station Ltd. REO Site Assembly Ltd., REO 88 Kirtling St. Ltd. and REO 8 Brooks Court.

The 38 acre Battersea Power Station site, which includes the remains of the iconic A & B power stations, including the famous 4 chimneys is valued at £500 million and was in line for a £5.5 billion redevelopment having finally obtained planning consent. That permission called for a £200 million contribution to the extension of the Northern line to Nine Elms, to service the 3,400 homes.  It is these wider planning conditions, together with the extensive requirements for sympathetic renovation of the Grade II* listed building that has finally put paid to this last attempt at regeneration of the power station site.  REO are the fourth potential developer in the past 30 years to attempt to rescue the money pit that it has turned out to be.

It is understood that a number of options are being explored, including a suggested interest from Chelsea FC, who are looking for a new stadium site.  It is thought ‘The Blues’ have engaged Mike Hussey to explore the idea.

Perhaps Mr Abramovich has deep enough pockets!