KUALA LUMPUR, Jan 19 — Permodalan Nasional Bhd (PNB) and the Employees Provident Fund (EPF) will reportedly acquire the Battersea Power Station project in the UK for £1.6 billion (RM8.76 billion), a new record in the British property sector.

Various media outlets reported that the state investment firm and private retirement fund will buy out the stakes of Sime Darby Bhd and SP Setia, which are transforming the decommissioned power station into a mixed development that is set to gentrify the area.

According to the Financial Times, the deal will include staggered payments to the two developers as part of their compensation for continuing construction works, while the remainder is due on completion.

The deal remains in early negotiations, according to a separate Bloomberg report, but is expected to go through without major issues.

PNB is already an indirect stakeholder in the ambitious project via its equity in both Sime Darby and SP Setia while the EPF currently owns 20 per cent of the project.

Under the deal, the EPF will also drop is role as a developer to become the asset manager of the partnership with PNB.

The deal is also set to guarantee the future of the Battersea Power Station project, which has been in doubt following the volatility in the UK property market.

Once considered prime investments, real estate in the UK has taken a battering since the country's controversial decision to leave the European Union, a move commonly referred to as "Brexit”.

Construction officially began on July 2013, with the overall development anticipated to finish by 2025, although the Battersea Power Station will open to the public in 2019.

The EPF bought into the project as part of its diversification into foreign real estate, which it previously credited for its recent dividend payouts.