Malaysia sovereign wealth fund buys stake in £1.6b London mixed-use development

Malaysian sovereign wealth fund Permodalan Nasional Bhd (PNB) has plans to buy a stake in the £1.6 billion ($2.2 billion) Battersea Power Station on the south bank of the Thames.

PNB will buy its stake in the building from the Malaysian developers Sime Darby Property and SP Setia, which between them own 80 percent of the 48-acre site. PNB, which is a majority stakeholder in both developers, already indirectly owns a large proportion of Battersea.

PNB will own a majority of the power station with Employees Provident Fund of Malaysia.

The former power plant was completely shut down in 1983, but it is being redeveloped in eight phases.

The building, due to be completed by 2020, will comprise 75 percent commercial space. The Battersea Power Station Development Co. said its transforming the Grade II listed building into 250 apartments, retail and leisure units and office space, which will be partly used for Apple’s U.K. headquarters.

Malaysian investors SP Setia Bhd., Sime Darby Bhd. and EPF plan to develop more than 4,300 homes as well as office properties on the 42-acre site. The developers were on course to achieve less than half of their original return target as costs rose and wider economic uncertainty reduced demand for the most expensive homes, according to Bloomberg.

The mixed-use scheme will eventually include 4,364 new homes, shops, restaurants, offices, a park and a new tube station, according to Construction News. In December, Wandsworth Council approved designs for the plans to build a new London Underground station at Battersea Power Station, which is scheduled to open in 2020.

The Battersea Power Station Development Co. will remain the “active manager of the development” once the deal is concluded.