Battersea Power Station Owner Takes $208 Million Impairment
(Bloomberg) -- The owner of London’s Battersea Power Station took an impairment charge of about 156 million pounds ($208 million) on the project after social distancing measures and a nationwide lockdown slowed construction.
The charge for Battersea Project Holding Company Ltd, UK was related to works in progress on the site, SP Setia Bhd, a 40% shareholder in the development, said in a filing last week. The value of the overall project, which includes office buildings and thousands of apartments, is about 9 billion pounds, a person with knowledge of the matter said.
“The impairment reported is modest in the context of the value of the project,” said a spokesman for the development, without commenting on the valuation.
Work on the former coal-fired power plant, known for being on the cover of Pink Floyd’s “Animals” album, had already been affected by construction delays in recent years, which led some buyers to pull out of deals to purchase homes. The developer said in a filing in 2017 that the project was on course to make less than half of the returns originally planned.
“Notwithstanding the impact of Covid-19 on the market, it is encouraging that BPS has continued to maintain good momentum throughout the year with respect to both residential sales and commercial leasing,” the spokesman for the project said.
The 42-acre site on the south bank of the Thames river was acquired in 2012 by a group of Malaysian companies -- Sime Darby Property Bhd., SP Setia and the country’s Employees Provident Fund. The developer will complete work on the main power station building next year, where Apple Inc. has leased space for its new U.K. headquarters.
Most of the U.K. construction industry briefly shut down at the start of the country’s first lockdown in March, while contractors then put in place new working practices to accommodate social distancing needs. That’s caused delays to more than 3 million square feet (279,000 square meters) of London office projects due to complete before September, according to a recent survey by Deloitte.
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