Battersea Power Station, one of London's most famous landmarks, has been placed into administration with Ernst & Young as administrators to the subsidiary companies of the Irish group, Real Estate Opportunities (REO) that own the power station. Lloyds Banking Group and the National Asset Management Agency (NAMA) are owed some £325m which was due to be repaid at the end of August. The REO had offered £262m for the debt but, as the charge holder, NAMA and the banks have decided to appoint and see what is offered.
The banks and NAMA will now launch a formal sales process to find a developer for the south west London site, with interest expected to come from Chelsea Football Club, Malaysian property company SP Setia and British developers, such as Berkeley and Development Securities.
Battersea Power station sits in the middle of a vast 40-acre, plot right on the Thames, just opposite the fashionable district of Chelsea. Many developers agree it is an attractive proposition — if it were not for the giant brick shell that must be preserved. The costs of perserving the building is very high as the chimneys may not be structurally sound and thousands of bricks and tiles are deteriorating.
There is planning permission for a £5.5bn scheme with 3,400 new homes and 10m sq ft of commercial space.