London’s Battersea Power Station hits record £300m in sales as residents welcomed

Surge in deals this year leaves developer insulated from concerns about wider Nine Elms project

Walk towards Battersea Power Station, a luxury property, retail and office destination on the edge of the Thames River in Central London, and it is hard not to gaze in awe at the sheer size and scale of the building.

Set in the heart of one of central London’s most ambitious new developments – on a 17-hectare former industrial brownfield site – the landmark red brick structure and its distinctive four white chimneys dominate the skyline.

The imposing sight cements the years of work that has gone into regenerating the Grade II listed building, which hit a key milestone this month when it was removed from Historic England’s Heritage at Risk Register ahead of its full opening to the public in 2022.

As visitors approach the building there is a feeling of something special. That sentiment has been a big driver of sales this year, Meriam Lock-Necrews, head of residential at Battersea Power Station company, told The National.

While the developer, owned by a consortium of Malaysian investors, secured £150 million ($201.76 million) in sales in 2020 when the country was grappling with the pandemic and the complete shutdown of the property market at the start of the crisis, this year is increasingly lucrative.

“This year our sales are over £300m, a record since launch,” Ms Lock-Necrews said. “We’re outperforming the market.”

With the outside of the building – reconstructed using 1.75 million bricks, all painstakingly matched to the originals – now complete, residents moved into the first of the 254 residential homes to be finished in May, with more moving into another completed section of the building last month.

“It’s been a long time coming and the perception from outside was ‘are they going to deliver this?’" Ms Lock-Necrews said.

It is quite a journey from its former life as a power station, which was decommissioned in 1983 and once supplied London with a fifth of its electricity.

First approved by planners at the local council in 2010, the £9bn project broke ground in 2013 when work commenced on the first phase of the eight-phase project to build a new mixed-use neighbourhood and business quarter south of the river on derelict land.

The completed project will have 25,000 people living and working on the site, making it one of London’s largest office, retail, leisure and cultural quarters with 250 shops as well as cafes, restaurants, a theatre, hotel and cinemas as well as 7.68 hectares of public space, including a 2.42ha public park.

A key milestone for the area was the opening of Battersea Power Station tube station on the Northern Line in September, connecting the area to the rest of the city for the first time – another key change helping to ramp up sales, Ms Lock-Necrews said, as the finished apartments attract more interest from investors.

“People that we've had registered on our books are now calling up going, ‘OK can we come down’ because they love the idea and the vision of it but now that it has actually come to fruition they’re coming to see it,” she said.

“We did a sale on a large four-bed for about £7 million the other week just off the back of the tube station opening."

Lockdown also helped to boost sales, she said, as runners or walkers using up their daily allowance of exercise time discovered the development for the first time.

Walk around the area and the bespoke restaurants, cafes, independent shops and gyms surrounding the more modern Circus West Village are full of patrons, as dozens of runners or families pushing buggies head past.

The step-up in sales in March came as the country slowed emerged from the third lockdown and Chancellor of the Exchequer Rishi Sunak extended the stamp duty holiday, giving property buyers a saving of up to £15,000.

The pandemic also made people re-evaluate how they want to live, with the power station's 15-minute city concept a big draw, Ms Lock-Necrews said.

“The fact that you have your own public realm with everything you need downstairs ... we call it the 15-minute neighbourhood because you live here, you work here, you play here but within two minutes you have access to shops, restaurants, hairdressers, dentists, the park, the river, the tube station."

With residents now able to get to the City of London via the underground or a riverboat just outside within 20 minutes, the liveability factor went up another notch.

But the 15-minute city lifestyle in prime central London does not come cheap.

Prices for apartments in the power station itself start from £865,000 for a studio, with one-beds setting buyers back more than £1m and two beds more than £2m.

At the higher end, the 30 or so Sky Villas at the top of the building with a private walled garden, go for "several million".

“The quality of the apartments as well as the heritage linked to the building where old meets new offers buyers something different, especially when compared to other new developments that also offer similar services, such as concierge, spa facilities, private lounges and meeting rooms and gardens," Ms Lock-Necrews said.

However, the development, like all new-builds, is still at risk of buyers drifting off to buy something even newer in the future.

“But there's a finite amount of space and there's a finite number of developers, and most people now are not just looking for somewhere to live, they're looking for a neighbourhood to live in, a community with all the amenities," Ms Lock-Necrews said.

"You can count on one hand the developments in central London that offer all of that in one place."

Dubai is another location that offers residents a plethora of mini cities where residents have all the amenities on their doorstep, she said.

“That’s why there has been a strong appetite from the Middle East market and I imagine that will pick up even more as we evolve and create the high street and that retail offering as well," she said.

More than 90 per cent of the development is sold across the first three phases, with half of the sales made up of domestic customers and the rest international, with Middle East buyers a strong component of the purchases.

Yet despite travel restrictions easing this summer, Ms Lock-Necrews said this did not automatically translate into higher sales from that region.

“We’ve certainly seen more Middle East buyers turn up, but nowhere near the scale we've seen historically, I personally think that we'll see a resurgence of that market post Ramadan next year,” she said.

For now the focus is on completing phase two, the power station itself, with work to be done in the heart of the mammoth structure where the retail and office space will be located,

Hundreds of builders are still on site, with the space so vast it could house St Paul’s Cathedral with ease.

Residents will eventually have instant access to 500 square metres of retail space with more than 100 shops featuring big names such as Calvin Klein and Tommy Hilfiger, while tech specialist Apple will locate its offices across six floors.

Final handover will be next summer, not bad for a regeneration project that began in early 2014, with the white chimneys – effectively the DNA of the landmark, dismantled because of corrosion from decades of heavy industrial use and then reconstructed and repainted in 2017.

While the vast development is a town within itself, it sits on the edge of the wider Nine Elms area, Europe's biggest regeneration project, with its location helping to keep it somewhat insulated from the criticism directed at the wider area.

Nine Elms, a 230-hectare town of 20,000 homes, has in recent weeks been described by the media as “Boris’s ugly ghost town”.

First commissioned in 2012 during Boris Johnson's tenure as mayor of London, the regeneration project, which stretches from Vauxhall Cross to Battersea Power Station itself, was lauded by the now UK prime minister as “the greatest transformational story in the world’s greatest city”.

While the aim was to breathe new life into an area previously known only for its warehouses, distribution depots and run-down homes, it has been hit by claims that some Chinese-backed developers are failing to sell properties while others are running out of money to complete projects.

Chinese developers R&F and CC Land, for example, are reportedly struggling to offload luxury homes in their £3bn joint venture Nine Elms Square, with only one in three sold since the apartments were first marketed in 2018.

Meanwhile, agents claim figures for neighbouring buildings have occupancy rates of only about 25 per cent to 30 per cent.

Ms Lock-Necrews is quick to dismiss criticism lobbed at other developers in the Nine Elms venture, as well as fears that such a disparate set of buildings will fail to deliver a community.

“Of course, with any kind of transformation people are always sceptical when [several] developments come through at one time,” she said.

“We have to work together and the success of the other developers down the road is just as important as our success."

She points to the increase in values of about 50 per cent at Battersea Power Station's phase one development, Circus West Village – which is adjacent to the power station – since it was first handed over in 2017 with 1,500 residents now in situ, as evidence of the success of their offering.

“That gives you the confidence to say it is a well-established area and it's got even more potential for the future,” she said.

There is every reason for her team to feel slightly removed from the issues faced elsewhere in the Nine Elms development, partly because Battersea Power Station is a breathtaking work of art.

Phase three will connect the development to the the new tube station along a high street known as Electric Boulevard, with more residential buildings and a hotel. Future phases promise more homes and lifestyle offerings.

So with the new community slowly emerging, how long will it take to finish?

Probably until the end of the decade, Ms Lock-Necrews estimated.

"It’s still very fresh," she said.

Updated: November 21st 2021, 9:36 AM
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