The Power Struggle
The fate of Battersea’s famous structure is still far from certain, reports Robin Marriott
To the Chelsea residents on the north side of the Thames, Battersea Power Station stands out like a monument to a bygone era. The four chimneys no longer emit smoke and the days when it generated electricity must seem as distant as when their football club wasn’t owned by a Russian billionaire.
They will probably not have realised that this week marked an important stage in the 22-year wait to bring Battersea back into use. The owner, Parkview International, which is owned by the Hong Kong Hwang family, said it was “implementing its finance strategy for the construction phase of the development”.
So far, it has spent £200m to gain planning permission, pay architects for their designs, and pay for land clearance. But that is just a fraction of the cost. In total it will cost £1.2bn to construct. Now the company says it is getting ready for the next stage and that is why it is talking to potential investors, partners and operators.
The twist is that among the parties Parkview is talking to is Ballymore Properties, a company best known for developing smart residential apartments in London’s Docklands.
Furthermore, it is working on developing proposals for Parkview to consider. So could there be plans to turn the icon into a new residential location, with flats smart enough to tempt even the snootiest of Chelsea residents to cross the river?
Parkview’s current plan is to devote just 10 per cent of the development to homes. In a hard-fought process. It has managed to overcome local objections as well as resistance from conservation groups and some politicians in Wandsworth to win planning permission for 4.3m square feet of mainly commercial development. The power station itself represents around a quarter of the development site.
According to Parkview, it will be in a position to reveal around a dozen commercial tenants by the end of the year. Hyatt of America has agreed to operate a 700-bed conference hotel and is tipped to operate a 400-bed “urban resort” hotel. There will be food and beverage operators, shops and a cinema.
The chimneys are too unsafe to retain, says Parkview, so it has tendered for a company to bring them down and replace them with replicas. The job could suit one of the impressive Japanese construction companies, whose giant cranes can lift out the chimneys whole rather like a dentist pulls out teeth. One of the chimneys will house a restaurant at the top with just one table large enough for 16. Reservations could be auctioned off. Another chimney will become a ride attraction. A new station linked to Victoria station and a pedestrian bridge will be added.
Ballymore is interested not by the commercial property potential of the scheme, however. Those that know the company say it believes the scheme should be mainly residential. The location and iconic structure would “pull” residential values across the river from Chelsea, given the new links with the north side of the Thames.
Some would argue that the market has been through two property cycles since the original plans for Battersea were conceived. Its value would as a residential scheme would far outweigh its value as a commercial scheme, it is said.
Ballymore would not comment on its plans, but it is known to have been contacted by investors keen to work alongside it, including deep pocketed ones from America. They will know that Ballymore is run by Irish builder Sean Mulryan who has amassed a fortune developing residential schemes. It has a series of residential developments in the Docklands such as Providence Wharf. The company is never to be underestimated either. When Railtrack decided to sell off its property development arm in 2001 every developer worth their salt took a look. Many bid to buy Railtrack Developments attracted to the huge development potential of sites near railway stations. Hammerson, the established FTSE 100 developer, thought it was in a strong position to buy the company alone. That was until Ballymore persuaded it that it was on a shortlist too in an audacious move and had the finance in place to buy Railtrack. Hammerson agreed it was better to join forces with Ballymore rather than fight it, and ended up buying the company together. They split the properties between them.
Parkview would not comment on Ballymore’s plans either. Any move to increase the residential element is likely to require a new planning application and probably be subject to Mayor Ken Livingstone’s requirement for 50 per cent affordable housing. Ballymore is not the only company with an offer on the table. If investors can agree on Parkview’s plan then the power station might yet be brought back into use. If they cannot, then the Chelsea residents will have to stare at the forlorn structure a good while longer.