Thursday, March 28, 2013
Friday, December 14, 2012
Friday, November 30, 2012
Can there be another building in the UK with such a troubled history as Battersea Power Station? For nearly three decades the decaying behemoth on the Thames in west London has sat dormant - a calm, largely unchanging giant, casting its gaze down over the many consultants, developers and investors who have scrabbled around its edges, come and gone, promising so much and delivering so little.
After so many dashed hopes and unrealised visions, the industry could have been forgiven a degree of wariness, if not outright scepticism, when it was announced that the power station had been sold, yet again, to new investors, following the collapse of previous owner REO’s plans for the site. However, somewhat counterintuitively, the new owners - a consortium of Malaysian investors - appear to be promising some reassuring continuity. REO’s £8bn masterplan for the site, which gained planning permission in 2010 and includes proposals for more than 3,400 homes, is to be retained. What’s more, the team that had been hired to deliver the project on behalf of REO has been re-engaged by the Malaysians under the leadership of Rob Tincknell.
Meeting Building on site earlier this month, Tincknell, a veteran of major mixed-use schemes in the UK, Ireland and China, oozes the kind of relaxed confidence and bonhomie that seems to be the calling card of big-name developers. Dressed in a sharp suit and open-necked shirt, he deploys a well-rehearsed stock of investor-friendly phrases: it’s a “fantastic project”, an “extraordinary opportunity” and his team is “passionate about this building and passionate about the site”, which will become “a brand new town centre that has depth, character and a level of authenticity that you just can’t get anywhere else”. In short, Battersea Power Station site will become “an absolutely fantastic place”.
The power station is the key to the whole project because it’s unique and iconic: it brings a level of brand recognition that money just can’t buySuch epithets have, of course, been articulated many, many times before. So why should anybody suspend their disbelief this time around? Tincknell points to a variety of factors he believes make his plans for the power station truly deliverable. First, he claims that the extension of London Underground’s Northern Line to the site, as well as the wider Nine Elms development area, is now in the bag, with the government having declared it a national infrastructure project. “That means the government has to throw all its weight behind the project and has to make it happen,” says Tincknell, adding that Transport for London is preparing a planning application for the project that he expects to be submitted in March or April next year.
Second, Tincknell says the masterplan he commissioned New York-based architect Rafael Viñoly to prepare proposes sufficient density to make the scheme viable. Previous schemes, he says, simply could not meet the £203m contribution to the Northern Line extension, not to mention the cost of refurbishment works required on the power station itself, and still turn a profit.
“The planning consent is for 8.1 million ft2, which is twice the size of the previous planning consent,” says Tincknell. “There are some big bills to pay here, and we had to come up with a development that was big enough to support all those extra costs.” He says the fact that development is now under way on surrounding sites provides a level of confidence that hasn’t previously existed. Most importantly, he adds, the new owners “bring with them a huge level of financial stability, which is extremely important for a project of this scale”.
Tincknell says he has no plans to revisit the existing outline planning permission for the site and perhaps that shouldn’t be so surprising. He reveals that he had been in talks about investment opportunities with some elements of the Malaysian consortium before REO’s bankers withdrew their support, and that the consortium was the only bidder for the site that “really signed up to the philosophy of the existing scheme”. (The consortium, made up largely of two Malaysian developers, SP Setia and Sime Darby Property, outbid Chelsea Football Club, which had wanted to build a new 60,000-seater stadium south of the river.) What’s more, he says that the outline consent is sufficiently flexible to allow for a reasonable amount of change as the development progresses.
Another aspect of the existing permission and section 106 deal that has caused sceptics to wonder about the scheme’s viability is the fact that Tincknell is under obligation to begin restoration works on the power station at the same time as he begins work on the first phase of the surrounding development. The upfront cost of the power station works has been cited in the property press as a major headache for developers over the years. But Tincknell does not see it that way. “We’re happy to do that,” he says. “I don’t think any of our future residents want to be sitting in their living rooms while the entire power station is being refurbished.”
I don’t think any of our future residents want to be sitting in their living rooms while the entire power station is being refurbishedTincknell adds that the very idea that the power station is a problem to be overcome is misguided. “Some of the press comments in the past - that the thing that hinders this project moving forward is the power station and the costs attached - are simply not true,” he says. “The power station is the key to the whole project because it’s unique and iconic: it brings a level of brand recognition that money just can’t buy.”
Moving on, Tincknell says he has a full consultancy team in place to deliver the 800-home first phase of the project, which he hopes will gain detailed planning permission by the end of the year. He adds that he will be going out to the market early in the new year to secure a main contractor for the first phase of the project and rejects any suggestion that he might seek a housebuilder partner for the largely residential phase. “We’re procuring the project ourselves and there are no discussions with any partner whatsoever at this stage,” he says. “Who knows what’s going to happen in the future. This is a very long project. But at this stage there is no ambition to bring in a partner at all.”
In terms of future contractors, however, Tincknell says he will be going out to the market through a traditional tendering process early in 2013. “What we’re looking for is a contractor we can work with in the long term, who can support the development and support the kind of timescales we’re looking at,” he says, adding that he hopes to start construction in September next year.
At the same time, Tincknell says he is already in the process of drawing up design briefs for the second phase of the project and says he hopes to select the design team for the second phase, which will need to include a retail specialist, early in the new year. The idea is to bring in a wide range of architects over the lifespan of the project. “We don’t want it all to be the same,” says Tincknell. “This is a town centre and like any town centre it needs to be a collection of interesting and intriguing quality architecture.”
All of this does sound like something might actually be about to happen at Battersea; something that will confound the sceptics and draw a line under 30 years of failure. Even breaking ground on the first of the planned apartment buildings would certainly buck the trend. For Tincknell, his faith in the project is bolstered by the fact that other developers have woken up to the potential of the area. “I think that the UK real estate industry missed Nine Elms, but people have now realised how central this bit of London is,” he says. “We’ve had the dawn of realisation about Nine Elms and we’re at the very centre of that.”
Battersea Power Station: A history1935 Battersea’s A Station is completed, followed by its sister, the B Station, in 1953.
1980 Environment secretary Michael Heseltine awards the building grade-II listed status.
1983 Power generation at the plant ceases.
1986 Alton Towers’ proposal to turn the power station into a theme park wins planning permission.
1989 The theme park proposal is abandoned after costs escalate from £35m to £230m, leaving the power station without its roof and liable to flooding.
1993 The site is sold to Hong Kong-based Parkview International for £10m.
1997 Parkview’s masterplan for the power station receives outline planning permission.
2006 REO purchases the power station for £400m.
2010 REO wins outline planning permission for Rafael Viñoly’s mixed-use masterplan.
2011 REO’s scheme goes into administration with debts of more than £500m.
2012 The site is sold to a consortium made up of SP Setia, Sime Darby and the Employees’ Pension Fund of Malaysia for £400m.
Monday, September 10, 2012
Sunday, May 13, 2012
|Battersea power station: 'The fact is that sometimes heritage is put before profit.' Photograph: Dan Chung for the Guardian|
Over the past few months calls for its euthanasia have gathered pace, prompted by the fact that bids are currently being considered for the site – of which the most eye-catching is Chelsea FC's proposal to retain fragments of the building and engulf them in a new stadium. The built asset consultancy EC Harris announced that the site would be worth an extra £470m if it were knocked down, and declared that "the economic situation requires practical thinking, and one should consider whether heritage is more important than profit".
The property journalist Giles Barrie said that "the only people who want Battersea power station retained are a few ancient hippies … in the worst financial crisis since the era of Harold Wilson and Ted Heath, it's time to drop Battersea power station – and provide thousands of new homes".
You might see Barrie's point. Battersea has now spent longer as an urban problem than it did producing electricity at full capacity. Except that the same argument was applied to St Pancras station, with its palatial neo-gothic Midland Grand hotel, which was designed by Sir George Gilbert Scott, grandfather of the power station's architect, Sir Giles. Indeed this argument was used repeatedly. In the Wilson/Heath era to which Barrie refers, the hotel was declared an impossible luxury, a drain on hard-pressed national resources, an unsolvable problem. It did indeed stand empty for decades. But last year it was triumphantly reopened, and no sane person would want it removed.
Or else there are the Wren churches in the City of London. Look at how much land they take up! See how appalling is their return of floor space to site area! And their maintenance costs! Think how much world-class office space could be built in their place, giving the message to foreign investors that London is open for business! And who goes to church anyway?
The fact is that, in places such as London, heritage is sometimes put before profit, and the city ends up benefiting: culturally, socially, visually and financially. If you took away all the awkward, hard-to-justify, out-of-fashion, eccentric and expensive landmarks, it would become a drabber, duller place. It would be more like, say, Frankfurt or Zurich, cities which are forever trying to grab more of London's financial business, and with only limited success, precisely because they are more boring.
As for the argument that preservation can't be afforded in a recession, this is beyond absurd. A recession, in Battersea? It's hard to spot. But the main reason for resisting the property industry's calls for demolishing the power station, in whole or part, is that the site's dormancy is, above all, a failure of the property industry.
Successive owners have proposed fantastical projects – a theme park, a retail-entertainment complex in which Cirque du Soleil would swoop down on unsuspecting shoppers, a thousand-foot "ecodome" – which required unfeasibly large amounts of upfront investment, and failed adequately to address such things as the location's poor public transport. What's more, these plans, while retaining the old building, would have so thoroughly changed its character that it was hardly worth the effort.
Chelsea FC's plans have not yet been revealed, but it is hard to imagine that they will not have similar problems – gigantism, the destruction of the essential qualities of the old building, and rather obvious issues with transport and local residents. It is hard to see how dropping a stadium on the power station would be anything other than an awkward coupling: a camel with a hippo, say.
Meanwhile it has been plain for years what the site is best for: a great deal of housing, taking advantage of the area's high values and waterside location, to be developed incrementally as the market allows. As a look at Google Earth will tell you, there is plenty of room, as the power station only occupies one-seventh of the site. The architects Allies and Morrison and Terry Farrell have come up with different ideas for what it could be used for – a relatively simple performance venue in one case, a romantic ruin containing a garden in the other. Neither would be profitable in itself, but could be paid for by the returns on the rest of the site.
The last owners were Treasury Holdings, a Dublin-based company, which once bid unsuccessfully for the Millennium Dome and whose finances eventually went the way of the Irish economy. It bought the site for £400m in 2006, a fatally high price that is rumoured to have been £150m above that of the next highest bidder.
The aim of the current sale is to recover some of the money that financial institutions were dumb enough to lend to the Treasury. If the power station were to go, the value would increase, so the creditors would get more of their money back. The argument for demolition, or for crushing it under a stadium, is to destroy a listed building so that lenders get a less severe haircut.
But this is their problem: buyers of the site, in the past and the future, know that it contains a large historic building, and they should calculate the price accordingly. If they get it wrong, the city's heritage should not pay for their mistake.
Friday, March 16, 2012
The owner of the 11-acre site on the Williamsburg, Brooklyn, waterfront is said to be considering a sale of the property it bought for $55.8 million in 2004. Project was slated to take 10 years.
By Amanda Fung
Ambitious plans to redevelop the derelict yet landmarked Domino Sugar factory on the Williamsburg, Brooklyn, waterfront may be going sour.
Since 2009, CPC Resources has been looking for a partner to recapitalize its 11.2-acre residential development, according to sources. Now the owner, which is the for-profit arm of Community Preservation Corp., and its partner, Katan Group, is considering the sale of the entire site. The project was estimated to cost up to $2 billion initially and was supposed to take 10 years to complete. The sale of the entire site or a portion of it was first reported by The Commercial Observer.
CPC Resources declined to comment. But in January, CPC's newly appointed head, former city Housing Preservation and Development Commissioner Rafael Cestero, told Crain's that the firm was still in the planning process for the project.
“Domino is a big signature project for CPC and the city, and I look forward to figuring out how to move forward,” he said at the time.
It has been a long tough road for CPC and Katan, which paid $55.8 million for the site on the south end of Kent Avenue in 2004, according to city records.
The project's density, height and impact on its surrounding neighborhood initially generated a storm of criticism from the community and local elected officials. After modifications on building height and mass, the plan to rezone the area to residential so that the development can go ahead finally won approval by the city in July 2010. The developers were also sued by a preservation group, but prevailed in that lawsuit in 2011. After passing that last hurdle, CPC said in May 2011 that it would be ready to break ground on the initial residential development on the upland portion of the site in 2012. Work has not yet started.
The overall redevelopment plan calls for a mixed-use development with 2,200 residential units, 660 of which will be affordable. It will also include four acres of waterfront space that will be open to the public and 220,000 square feet of retail, commercial and community space. It would also redevelop the refinery building with its famed Domino sign.
The tough economic environment contributed to the stalled Domino project. Additionally, sources said CPC Resources' parent, Community Preservation Corp., which provides financing for affordable housing development, has itself struggled. Late last year, its founder and long-time leader, Michael Lappin, announced his retirement. Earlier this year, Mr. Cestero was brought into the firm to turn things around, sources said. Last week, the nonprofit got a boost. It announced that it obtained an extension of its credit facility that would allow the nonprofit to finance the preservation and creation of up to 5,000 affordable housing units in the city.
The Domino site is one of the last pieces of prime waterfront property in Williamsburg to be developed. Most of the development to date has centered on the strip further north, on Kent Avenue. Those residential developments, both rental and sales, have been booming since they were restarted or completed post-downturn.
“I don't think there will be a shortage of bidders,” said David Maundrell, p
resident of residential brokerage Aptsandlofts.com, who has no direct knowledge of the Domino sale. “The area has this fantastic sleepy industrial feel that would be very desirable for residents; many people prefer the southside of Williamsburg over the north these days.”
Correction: CPC Resources and Katan Group bought the Domino Sugar site in Williamsburg, Brooklyn, in 2004. The purchase year was misstated in the summary of an earlier version of this article, published March 14, 2012.
Read more: http://www.crainsnewyork.com/article/20120314/REAL_ESTATE/120319951#ixzz1pCOPrMPz
Friday, February 24, 2012
Battersea power station is to be offered for sale on the open market for the first time in its history, the Standard has learned.
The landmark brick building will be advertised all over the world in a huge marketing push next week to secure a long-term owner. Offers of up £500 million are expected.
Investors will be offered the chance to buy and restore the ill-fated Grade II* listed former electricity generator and develop land billed as the last major undeveloped regeneration site in central London.
A sale is crucial for the transformation of the 39-acre Nine Elms site beside the Thames - and also holds the key to funding a new Underground link to the Northern line.
Agent Knight Frank, which is handling the sale, said: "This is a landmark recognised all over the world. It as iconic as the Chrysler Building in New York, the Eiffel Tower in Paris and indeed Big Ben and the London Eye."
The site is currently owned by administrators Ernst & Young following the collapse of an Irish-backed scheme last November. They are hoping to raise at least the £500 million still owed to creditors.
The sale of the power station comes with planning permission for a huge residential, retail, office and entertainment complex on the banks of the Thames and a new £750 million Underground link.
Power base on river: would suit tycoon with £5 billion to spend
For sale: listed period property with sweeping river views and great entertaining space. In need of substantial modernisation but offers outstanding opportunity for buyer to put own stamp on unique building. No time wasters.
Estate agents will start marketing Battersea power station and its surrounding Thames-side land next week when it comes onto the open market for the first time since it stopped generating power for London in 1983.
It is the latest twist in a saga that has left London's most famous industrial building mouldering on the south bank of the Thames for almost 30 years.
The previous owner - the third since the station was decommissioned - went into administration in December.
Agents Knight Frank will today kick-start a global search for a new custodian with newspaper adverts, headlined "The last major regeneration site in central London", in the Far East, Middle East, India, Russia, the US and Europe.
Potential investors will be sent a glossy brochure with an image of Sir Giles Gilbert Scott's unmistakeable Grade II*-listed masterpiece on the cover.
Stephan Miles Brown, handling the sale, expects global interest. "We expect to go to final bids for the autumn," he said. "Battersea power station is a landmark recognised all over the world by hundreds of thousands of people, not least because of its appearance in the Beatles film Help! and the Pink Floyd Animals album cover.
It is as iconic as the Chrysler Building in New York, the Eiffel Tower and indeed Big Ben and the London Eye, and known even to people who may have never been to London.
"The building gives the entire area a unique sense of place as well as putting it on the map. Its next owner will have to take a creative and long-term approach to its future."
The brochure describes the Thirties-built property as "a 39.1-acre freehold site located in a prominent central London riverside location".
Bidders could include cash-rich foreign sovereign wealth funds from the likes of Abu Dhabi or Qatar looking for very long-term investments; oligarchs such as Roman Abramovich, who has considered it as a possible site for Chelsea football club; billionaire property investors such as the Reuben Brothers, or new homes' developers.
It will be sold with the planning permission for a £5 billion homes, offices, hotel, retail and leisure development secured from Wandsworth council in 2010 by former owner Treasury Holdings.
The planning permission also requires a full restoration of the power station, Europe's largest brick building, at an estimated cost of £150 million, plus a £200 million contribution towards the Northern Line Extension from Kennington via Nine Elms that will connect the power station to the Tube network.
Pricing the site will not be easy and Knight Frank has been careful not to give any guidance. It was last valued at £500 million in October, but given the parlous state of the world economy and the financial commitment required, this may be revised sharply downwards.
Administrators Ernst & Young have been charged by creditors Lloyds and the Irish state "bad loan" bank Nama, with recovering as much of the
£500 million of outstanding debt as possible.
The cavernous generator has had three owners since it was sold off by the Central Electricity Generating Board but has defeated them all. Despite the uncertainty over its long-term future, however, it has gained a reputation as one of London's most in-demand party venues.
Events held in the Boiler Room venue include the launch of the Conservative Party's 2010 election manifesto, the launch of the Call of Duty: Black Ops game and a fundraising ball for Prince Harry's Walking with the Wounded charity for injured soldiers.
Why is the power station up for sale again?
Battersea's most recent owner, Irish-backed Treasury Holdings, was unable to raise the funds to start its £5.5 billion plan before having to repay about £500 million of loans. The subsidiaries that owned the site were placed in administration last November.
Who might buy it?
The site is the last major undeveloped stretch of river bank in central London, just one mile from the Houses of Parliament and from Sloane Square.
But it comes with a "poisoned chalice" - the crumbling power station which cannot be demolished because it is listed.
What happens if there is no buyer?
Administrators Ernst & Young are legally obliged to maintain the building, which is on English Heritage's Buildings at Risk register. But unless a commercially viable long-term plan is found, its future will remain in doubt. Potential owners have said it will have to be knocked down.
Are there other options?
Architect Terry Farrell has proposed a radical "cut price" alternative that would involve the side walls being knocked down and replaced with colonnades. The famous chimneys would be kept and the area inside and around the building turned into parkland.
New visions: How plans for battersea power station have changed
1983: Battersea power station ceases generating electricity. Central Electricity Generating Board wanted to demolish it, but an Evening Standard campaign got it listed.
1986: Alton Towers businessman John Broome gets planning permission for a theme park and pays £1.5 million for the site. Work begins, including removal of the roof, but little progress is
1993: Broome goes bust and site acquired from the creditor banks by Hong Kong-based property developer Victor Hwang's Parkview International for £10 million.
2000: Planning consent given for Parkview's £1.1 billion project to restore the building and redevelop the site into a retail, residential and leisure complex.
2006: Parkview sells to Dublin-based Treasury Holdings for a reported £400 million. A new scheme, for 3,500 homes, is designed by Uruguayan-born architect Rafael Viñoly.
November 2011: The Treasury Holdings scheme collapses putting the site in administration.