‘Nama did right thing’ selling Battersea site, says top official

Developer would need ‘deep pockets’, says Boris Johnson’s chief of staff

Battersea power station in London, which was sold by Nama and Lloyds in 2012 for €600 million and  is to be developed into £8 billion worth of apartments and shops by Malaysian investors. Photograph: Getty Images/iStockphoto

Battersea power station in London, which was sold by Nama and Lloyds in 2012 for €600 million and is to be developed into £8 billion worth of apartments and shops by Malaysian investors. Photograph: Getty Images/iStockphoto

 

The National Asset Management Agency (Nama) made the right decision to sell its stake in the iconic Battersea power station in London – despite charges that the Irish taxpayer has lost billions, a top London official has declared.

The property was sold by Nama and Lloyds, in 2012, for €600 million, after a legal battle with its indebted owners, Treasury Holdings. Malaysian investors plan to develop it into £8 billion worth of apartments and shops.

Property investor Paddy McKillen has charged that Nama sold the Thames-side property “for a steal” and were guilty of “one of the most devastating decisions” ever for Ireland.

Deep pockets

Edward Lister, chief of staff to the mayor of London, Boris Johnson, rejected the criticism, saying anyone developing Battersea needs “very deep pockets”.

“I can’t see any UK or Irish company having those credit lines readily available to build that out,” said Mr Lister, who will speak , in Dublin today at Property Industry Ireland’s Making Cities Work conference.

The developers of Battersea will have to pay £200 million to the London authorities “before they even blink” to pay for the extension of the underground Northern Line extension, he told The Irish Times.

The iconic property – which once featured on the cover of a Pink Floyd album – was purchased by a Malaysian consortium made up of SP Setia, Sime Darby and the Employees’ Provident Fund.

“I don’t know what the total bill is for the Malaysians, but it is in billions. I just can’t see any one pulling it off, quite frankly, without a big slug of foreign investment, and the Malaysians . . . have very deep pockets

“Don’t get me wrong, I think they are going to make money out of it – I think it will be a successful venture,” said Mr Lister, who is London’s deputy mayor for planning and policy. “[But] who was going to have that kind of cash at that particular point in time?

“So, no, I don’t accept [that they were wrong]. I think Nama did the right thing,” he said.

Toxic debt

Mr Lister said the British authorities had left toxic debt with British banks after the economic crash of 2008, rather than putting such assets into a bad bank.

By applying for planning permissions or doing deals with property developers, he said, Nama has got sites on to the market that “were so poisoned with toxic debt that they were just sitting there” .

“Most of that debt is now firmly into development, so they are all moving forward – in many cases with the original Irish developers, or with new Irish developers, or with British ones,” he continued.

Ballymore, for example, the property firm headed by Sean Mulryan, has “largely sorted themselves out and they are building, they have got credit lines back in again, they are building, they are paying back their debts.

“Our perception is that Nama has worked better.

“We have had more difficulties trying to sort out debt held by British banks in London, trying to get them moving forward than we have with Nama.”

Dead town centre

Meanwhile, Mr Lister is to tell the property conference of plans in London to convert unwanted high-street shops into homes “for the old and the young, if not for families” and night-time entertainment.

Middle-ranking high streets are dying because of the growth of online shopping, he said: “If you don’t do [changes like the ones proposed] then you will end up with a dead town centre.”

He said London needs 49,000 homes a year to meet demand, and although plans for 200,000 homes have already been approved, they are “stuck in the system” because of lack of credit or other problems.

But, he said, sites had already been identified to provide 42,000 homes a year over the next decade with “good quality urban design and a sense of place”.