Battersea Power Station: The Financial Setback for Malaysian Investors

Monday, 26 August 2024, 09:00

Battersea Power Station is at the center of a massive financial setback for three Malaysian entities, likely facing losses of RM1 billion annually. These losses stem from a five-year rental guarantee linked to the Battersea redevelopment project in London. The financial implications and risks associated with international investments are increasingly highlighted by this situation.

Malaysiakini — Battersea Power Station: The Financial Setback for Malaysian Investors

The Financial Impact on Malaysian Investors

Three Malaysian entities - Employees Provident Fund (EPF), Sime Darby Property, and SP Setia - are likely to shoulder significant losses, amounting to RM250 million every quarter. This totals around RM1 billion a year, directly linked to a five-year rental guarantee provided by the Battersea Power Station redevelopment.

Understanding the Guarantees

The guarantees were intended to spur sales at the iconic Battersea development.
However, the project now faces a hefty payment obligation due to unmet purchaser income.
SP Setia and Sime Darby each hold 40% shares, while EPF owns 20%.

Battersea Power Station's ambitious redevelopment project, aimed at revitalizing the historic site, has instead created a cautionary tale for larger Malaysian entities venturing into uncharted investment territories. Since the groundbreaking in July 2013, valued at £8 billion, the allure of international prestige has drawn attention to the volatility of markets like London.

This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.