KUALA LUMPUR: The Malaysian consortium of S P Setia Bhd, Sime Darby Property and the Employees Provident Fund (EPF) which is undertaking the Battersea Power Station redevelopment project in London has secured £790.2mil (RM4bil) in financing.
“With the bankers support, we may move from the single largest project in London to the largest property development company in London one day,” said Battersea Project Holdings Co Ltd chairman Tan Sri Liew Kee Sin during the signing ceremony yesterday.
The ceremony was witnessed by Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan.
One of the largest real estate financing transaction this year, it comprised a £532mil five-year development facility to support phase 1 of the development and the refurbishment of the power station project over the next three-and-a-half years. It also includes a £258.2mil land facility to refinance the initial loan used to fund the acquisition of the site over a longer period from two years to five years.
Foreseeing a higher gross development value (GDV), Liew said the current strategy was to lock in all the sales in order to pay off the infrastructure and land cost.
Liew said the GDV may go up later to at least £12bil from the expected GDV of £8bil for the 16.19ha development.
“We are selling at (about) £1,000 per sq ft. We are targeting £2,500 per sq ft for our phase 2 and phase 3 at £1,800 per sq ft,” he said.
Phase 1, which has a 99% take up rate was launched in January this year with sales of about RM3.8bil to date.
Depending on view of shareholders, Liew, who is also SP Setia president and CEO, said they must first ensure that all infrastructure was ready and that when all the loans were fully paid off, they would decide on how fast the development would go.
“If we do it faster, we would recoup our money faster. From our experience, after paying off the infrastructure and land cost, we should slow down (the development pace) as it determines the profit, which will be up to the shareholders,” he said.
The refurbishment of the power station includes the reconstruction of the chimneys to the original designs. It is part of Phase 2 of the project, which consist of the development of 250 apartments. It is expected to be launched next year and is due for completion by 2018. Gehry Partners and Foster+Partners was chosen to design Phase 3, known as the High Street. Liew said he had high hopes for the architectural firms to raise the value of the development.
CIMB Group chief executive Datuk Seri Nazir Razak reiterated its support for the consoritum and said: “We will be there for the following phases.”
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