New owners are two of Malaysia’s largest investors

Malaysian sovereign wealth fund Permodalan Nasional Berhad (PNB) is buying the grade II listed building Battersea Power Station for £1.6bn.

The terms of the deal value it ahead of the UK’s biggest ever property transaction, the £1.28bn sale of the Walkie Talkie skyscraper in the City last year, which was acquired by a Hong Kong firm.

PNB, which has £50bn of assets under management, plans to buy the building with pension fund Employees Provident Fund of Malaysia (EPF), which controls the private sector pension pot.

The buyers will also provide a cash injection that will allow Battersea Power Station’s restoration to be finished. 

A source told Building the sale “allows more equity to be injected into the scheme which is good and very helpful,” adding that it had secured the future of the redevelopment.

The £1.6bn is expected to be paid over the remaining construction period.

The PNB team is buying the stake from Malysian developers Sime Darby Property and SP Setia, in which PNB is a major shareholder and so indirectly owns part of the development. EPF also owns 20% of the entire development.

“[The sale] creates a solid platform that will ensure the protection, active management and control of the historically important building are maintained,” a spokesperson for Battersea Power Station Development Company said.

Battersea Power Station

The redevelopment of Sir Giles Gilbert Scott’s power station has been hit by substantial cost increases and last year the developer’s boss Rob Ticknell told Building that the original estimate of £750m had risen to north of £1.15bn on this second phase of the wider £9bn development.

That summer, contractor Skanska was replaced by rival Mace on phase two of the job which has been designed by Wilkinson Eyre.

Yesterday, the Swedish contractor revealed it would cut 3,000 jobs across the group as part of a wide-ranging restructuring plan to boost profitability.

Completion of the revamp is expected in late 2020 and will include the new home of tech giant Apple.

Last month, the final apartments in the first phase designed by Simpson Haugh and dRMM, which were built by bust contractor Carillion, were handed over, while Transport for London is expected to hand back the Northern Line Extension site located in phase 3b at the scheme to development manager Battersea Power Station Development Company (BPSDC) next year.

The source added that “options” for this part of the scheme, which currently mainly contains apartment buildings designed by Frank Gehry, were being looked at.

Phase 3a is currently being built by Sir Robert McAlpine and has been designed by Foster + Partners. McAlpine replaced Bouygues on this part of the work, a residentialled phase, lat May.