KUALA LUMPUR (Jan 18): Permodalan Nasional Bhd (PNB) and the Employees Provident Fund (EPF) intends to buy commercial assets in Phase 2 of the Battersea Power Station development in London for 1.61 billion pound sterling (RM8.8 billion).

To explore the potential sale, PNB and EPF have inked a heads of terms with Battersea Phase 2 Holding Company Ltd, a wholly-owned unit of Battersea Project Holding Company Ltd, in which S P Setia Bhd and Sime Darby Property Bhd own a 40% stake each, with the EPF holding the remainder 20%.

"The proposed transaction is to reorganise the ownership of The Battersea Power Station's Commercial Property under PNB and EPF, who are long-term investors, whilst Sime Darby Property Bhd and S P Setia are principally property developers. The Power Station's commercial property represents Phase 2 of the enlarged Battersea Power Station rejuvenation project," said Sime Darby Property in a statement today.

"The proposed transaction would provide increased certainty of investment return to Sime Darby Property and S P Setia as development partners earlier than would otherwise be the case, and would enable both parties to focus on securing the development profit and investment returns from the remainder development in Phases 3 to 7 of the Battersea Power Station which is estimated to be completed in 2028," it added.

The proposed transaction is subject to certain conditions which are to be satisfied, including a satisfactory due diligence and the requisite approvals being obtained. PNB and EPF are expected to form a joint venture company to undertake the proposed buy.

The heads of terms, which are non-binding, include an exclusivity period ending April 30, 2018 to conclude the proposed transaction.

In a separate statement, S P Setia said the expression of interest from PNB and EPF to be long-term asset holders in the Battersea Power Station project is very timely, considering the residential pre-sales of over 90% and Apple Inc's lease of the entire 470,000 square feet of office space in the Battersea Power Station building.

"The shareholdings in Battersea Project Holding Company will remain unchanged between Sime Darby Property, S P Setia and EPF. S P Setia remains committed to and is positive on the long-term prospects of the Battersea Power Station project," S P Setia said.

The Battersea Power Station project covers 42 acres and includes 3.5 million sq ft of mixed commercial space, together with 4,364 new homes.

Phase 1 of the Battersea development, which is known as Circus West Village and consists of 12 residential blocks and 100,000 square feet of restaurants, shops, offices and leisure accommodation, has been fully completed and handed over to the purchasers and tenants over the course of last year.