PETALING JAYA: The Battersea Power Station (BPS) was acquired via a competitive tender process in September 2012, said Sime Darby Property Bhd and SP Setia Bhd in a joint statement today.
The statement was issued in response to news reports quoting PKR de facto leader Datuk Seri Anwar Ibrahim saying that the previous government’s dubious investments, including the BPS project, would be investigated.
The two developers said that the site acquisition and the subsequent costs of the BPS development have been fully funded by a combination of equity from the shareholders together with development debt provided on commercial terms by a mixed group of nine Malaysian and international lenders.
It said that more than 60% of the development debt has been provided by the international lenders. The BPS was acquired in 2012 by Sime Darby Property, SP Setia and the Employees Provident Fund (EPF).
“The £458 million development loan for Phase 1 has been fully repaid ahead of schedule. The initial capital invested into the project by the developers and the profit from the first phase is now being reinvested into developing the subsequent phases,” it added.
In January this year, the shareholders and management of BPS were considering a divestment of the commercial assets and had initiated conversations with EPF and Permodalan Nasional Bhd (PNB).
At present, PNB and EPF together own directly and indirectly 67% of the equity in the BPS development. PNB holds majority stakes in SP Setia and Sime Darby Property, which jointly own 80% of the equity in the development while EPF directly owns 20% of the development.
PNB and EPF signed a heads of terms on Jan 18, 2018 with Battersea Phase 2 Holding Company Limited to initiate preliminary negotiations to purchase the commercial assets for an estimated total consideration of £1.608 billion.
Note that the purchase price is subject to further due diligence and on the basis that the development is completed and fully tenanted.
“As previously assured by all parties, the decision to explore the potential reorganisation of ownership is purely an investment consideration initiated by the BPS board and management team, together with EPF and PNB.
“From the perspective of Sime Darby Property and SP Setia, as property developers, the transaction will enable us to continue to reallocate capital to other areas of their development businesses,” it said.
For PNB and EPF, it is a strategic opportunity to secure ownership of a “unique and iconic real estate asset” that would be able to deliver sustainable income streams into the future to meet their respective income needs. The transaction is expected to generate an attractive long term yield for the investors.
As announced on May 15, 2018, the exclusivity period for the transaction has been extended till June 29, 2018 and the parties are working together towards completing the proposed transaction.
In terms of progress, more than 99% of the residential units in the first phase, Circus West Village, have been sold with more than 1,000 people and a range of businesses occupying BPS.
Work on the power station building is in progress and scheduled to open to the public in late 2020. The 1.8 million sq ft of space will include 500,000 sq ft of offices that have been pre-let to Apple.
The power station will also house 120 shops and restaurants, event space and visitor attractions as well as 253 residential apartments, of which 90% have been sold.
Source: The Sun Daily