(Adds details on project’s third phase)
By Matt Smith
DUBAI, Sept 8 (Reuters) - The firm behind the redevelopment of London’s Battersea Power Station is on track for its next multi-million pound fundraising, a senior executive said, seeing strong demand for space at the site where construction plans have repeatedly foundered in recent years.
Battersea Power Station Development Co, which has begun a 10 billion pound ($16.2 billion) regeneration of the site on London’s south bank, aims to finalise another round of financing by the end of October, its chief Rob Tincknell said on Monday.
The power station, boasting an imposing quartet of art deco chimneys and which gained worldwide fame by featuring on the cover of the 1977 “Animals” album by rock band Pink Floyd, stood derelict by the River Thames for about three decades until a Malaysian consortium bought the 42-acre site for 400 million pounds in July 2012.
The new owners, who include SP Setia and Sime Darby, resurrected a plan to turn the site into a commercial and residential district conceived by Irish developer Real Estate Opportunities - the most recent of a series of owners whose plans failed due to a mixture of planning issues and finance availability.
“We’re finalising arrangements for phase two and three of construction funding,” said Tincknell. He declined to reveal the value of the new construction funding, but said it would hopefully be finalised before he embarks on a world tour on Oct. 29 to promote the project.
The company last November secured 790 million pounds of syndicated financing from banks including CIMB, OCBC and Standard Chartered.
“It’s not easy, but our shareholders have incredibly strong balance sheets and they’re incredibly well supported by leading Malaysian financial institutions,” said Tincknell. “We’ve had a lot support from Malaysian banks and they’re all keen to get involved.”
Such optimism contrasts with the site’s history of failed proposals including a 1980s plan to turn it into a theme park.
A Malaysian-led international consortium of banks will provide the new construction financing, said Tincknell, who acknowledged construction costs in London had risen because of the city’s property boom.
“There had been a slightly over-inflated market in late 2013 and early 2014, but I think it’s settled down a bit now,” he said. “There’s a sensible level of growth in the market, a sensible level of buyers. If you’ve still got good product at the right price it will sell.”
Britain is due to hold a general election in 2015, which Tincknell admitted might be a concern. “We’re always cautious about some sort of knee-jerk policy change in the run-up to a general election that could have a damaging effect on the commercial or residential market,” he said.
The developer began selling homes at the site in January 2013 in a first phase of 865 apartments, of which 50 percent were sold abroad in the likes of Malaysia and Hong Kong.
A second phase also sold out, bringing the total units sold to 1,050 out of a total of 4,000 expected on completion in 2025. A third of the total eight residential phases is due to go on sale from late October.
“I imagine that the majority of the (apartment) buyers will be Londoners because we’ve captured people’s imagination so strongly in London,” said Tincknell. A new station on London Underground’s Northern Line will open for the site in 2019.
Tincknell’s team will visit about a dozen cities including New York, Dubai, Shanghai and Tokyo in late October and early November to promote the project’s latest phase.
This will feature 3.5 million square feet of commercial property including shops, restaurants, bars, hotels and offices, plus a further 539 residential units designed by Norman Foster and Frank Gehry.
1 US dollar = 0.6189 British pound Editing by David Holmes and David Evans