KUALA LUMPUR, Dec 17 – Sime Darby Property Bhd and SP Setia Bhd are disposing of their stake in the Battersea Power Station building for a base consideration of RM8.351 billion (£1.583 billion) to PNB-Kwasa International 2 Ltd.
The transaction is expected to be completed in the first quarter of 2019, said a statement.
PNB-Kwasa International 2 is a joint venture of Permodalan Nasional Bhd (PNB) and the Employees Provident Fund (EPF).
Battersea Phase 2 Holding Company Ltd (Battersea Phase 2 Holdco) is a wholly-owned subsidiary of Battersea Project Holding Co Ltd, which is owned by Sime Darby Property and SP Setia, each holding a 40 per cent stake, and the Employees Provident Fund Board (EPF) the remaining 20 per cent.
The ownership reorganisation for Phase 2 of the Battersea Power Station Commercial Assets has taken a major step forward with the signing of a sale and purchase agreement last Friday between Battersea Phase 2 Holdco and PNB-Kwasa, Sime Darby Property and SP Setia said in a joint statement today.
SP Setia President and Chief Executive Officer Datuk Khor Chap Jen said the sale will bode well with the company’s business plan, as it aimed to play a major role in the project’s overall development.
“We would like to thank all the parties involved in evaluating this acquisition and making this transaction a success. The commitment shown by all demonstrates the confidence in this iconic London landmark development,” he added.
Meanwhile, Sime Darby Property Group Managing Director Amrin Awaluddin said the deal was an important milestone in the development of the Battersea Power Station site, and was pleased to secure the commitment from two of Malaysia’s leading institutions.
The 17-hectare Battersea Power Station site is being developed over seven phases since 2012, managed by the London-based Battersea Power Station Development Company, on behalf of the shareholders.
It successfully completed and delivered 867 residential units in Phase 1 over the past two years (2017-2018).
Besides residential units, the retail and leisure spaces which were launched earlier this year gained strong interest from a wide-ranging collection of UK and other international brands.
Meanwhile, PNB and EPF in a joint statement today said under the terms of the acquisition, PNB-Kwasa International 2 Ltd was given a minimum guaranteed yield by Battersea Power Station throughout the construction period and up to five years post-completion, with a price adjustment mechanism to account for any difference in actual rental income compared to forecast.
PNB President and Group Chief Executive Datuk Abdul Rahman Ahmad said the acquisition would enable PNB to consolidate its strategic ownership in the central London development which is expected to deliver a sustainable income stream and potential capital appreciation in the future.
“The proposed investment has also been carefully structured to ensure the transaction meets the stringent investment criteria of PNB.
“This will ensure downside protection for PNB and EPF, whilst enabling the seller to earn-out upside in the development, should the actual rental income perform better than expected,” he said.
Meanwhile, EPF Deputy Chief Executive Officer (Investment) Datuk Mohamad Nasir Ab Latif said it was committed to seeing through the completion of the Battersea project.
“As an integrated development backed by strong tenants, we are confident in the potential of the Phase 2 Commercial Property to yield sustainable and long-term rental income for the EPF.
“We also anticipate the development to benefit from the extension of the London Underground Northern Line, which will provide greater accessibility to rejuvenate the area into a vibrant business and lifestyle epicentre,” he added. — Bernama
