A Malaysian pension fund is poised to seal a £375m deal to acquire Battersea power station, potentially drawing to a close the UK property industry’s longest running development saga.
Employees Provident Fund is expected to join forces with SP Setia, Malaysia’s largest publicly listed property developer by revenue, and RREEF, Deutsche Bank’s real estate arm, to build a £1.4bn scheme of housing, offices and shops.
EPF is in late-stage negotiations with Ernst & Young and Knight Frank, which are running the sale.
While the pension fund is said to be in pole position to complete to deal, no exclusivity agreement is thought to have been signed yet.
News of the deal comes a month after Roman Abramovich tabled a bid that would have led to the power station being turned into a 60,000-seat stadium for Chelsea FC, which he owns.
According to a report by CoStar, the property research group, the bid from Chelsea was significantly less than that from EPF and SP Setia.
The Grade II-listed building and surrounding land have officially been on the market since February.
Over the years, however, the property has been the subject of a number of failed takeover bids, including plans to turn it into a theme park, concert venue and an office development.
The 1930s power station, among the largest brick buildings in Europe, was closed in 1983. It is a much-loved feature of London’s skyline and has been used in album artwork for The Beatles and Pink Floyd.
In recent years, its prospects have fallen foul of the downturn in the property market. Treasury Holdings, the previous owner, was forced to hand over the site to Ireland’s National Asset Management Agency and Lloyds bank after the two enforced a loan in December that the company had.
The lenders had lost faith in Treasury Holdings’ ability to find a buyer, in spite of interest from parties that included Chelsea.
The creditors are trying to recover the entire £502m owed by the project’s owners by selling the site.
One of the obstacles for any redevelopment is that the owner is required as part of the consent to secure financing for an extension of the Tube’s Northern Line before starting most work on the site. Ernst & Young declined to comment.