24 Feb 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.
Q&A
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
made.
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.
