PNB, EPF buy commercial assets of Battersea from SP Setia

By MARK RAO / Pic By TMR

Permodalan Nasional Bhd (PNB) and the Employees Provident Fund (EPF) have entered into an agreement to purchase commercial assets in the second phase of the London-based Battersea Power Station project from SP Setia Bhd for RM8.8 billion.

SP Setia, in a statement, said the acquisition is timely for both EPF and PNB, as the two institutions would be long-term asset holders of the redevelopment project that already has Apple Inc committed as the main tenant.

“The proposed transaction, once completed, would augur well with our business plans as it will enhance our investment returns and allow SP Setia to capitalise on arising opportunities as a property developer,” the statement read.

SP Setia said the deal with PNB and EPF also contributes to the overall completion of the UK project.

“It will also enable SP Setia to focus on securing the development’s profit and investment returns from the remaining development phases in the Battersea Power Station project.”

The heads of terms agreement reached with EPF and PNB are reflective of the institutional investors’ commitment to the Battersea project.

SP Setia holds a 40% stake in Battersea Project Holding Co Ltd alongside Sime Darby Property Bhd and EPF with shareholdings of 40% and 20% respectively.

The joint venture is the holding company of Battersea Phase 2 Holding Co Ltd.

Upon successful completion of the transaction, the shareholdings in Battersea Project Holding Co will remain unchanged between SP Setia, Sime Darby Property and EPF. “SP Setia remains committed to, and is positive on the long-term prospects of the Battersea Power Station project,” the property developer concluded.

In a separate statement on the same day, Sime Darby Property said the proposed transaction is to reorganise the ownership of the commercial property portion of the Battersea project under PNB and EPF who are long-term investors in the development.

It added that Sime Darby Property and SP Setia are principally property developers.

“The proposed transaction would provide an increased certainty of investment returns to Sime Darby Property and SP Setia as development partners earlier than would otherwise be the case,” the recently listed property developer said.

“It would enable both parties to focus on securing the development profit and investment returns from the remainder of the projects’ third to seventh phases.”

The first phase of the Battersea project was fully completed and handed over to the purchasers and tenants last year.

Known as Circus West Village, the first phase consists of 12 residential blocks and 100,000 sq ft (9,290.3 sq m) of restaurants, shops, offices and leisure accommodation.

The entire redevelopment project covers 42 acres (17ha), inclusive of 3.5 million sq ft of mixed commercial space and 4,364 new homes, and is expected to be completed in 2028.

As of Sept 30 last year, SP Setia has 31 ongoing projects, remaining landbank of 5,384 acres with a gross development value of RM79.82 billion and RM7.05 billion in unbilled sales.