Business

Downtown Dubai on the Thames

Downtown Dubai on the Thames

After nearly 40 years sitting forlornly on the banks of the River Thames, one of London’s most iconic landmarks — Battersea Power Station, with its four sky-piercing white chimneys — is finally shaking off the coal dust to become one of the most talked about redevelopments in town. The new incarnation comes on the back of a few chaotic false starts and near misses — the building was nearly converted into a football stadium at one point. Last year, two Malaysian funds, Permodalan Nasional Berhad (PNB) and Employees Provident Fund of Malaysia, finally signed a repeatedly delayed deal to take a £1.6-billion (Dh7.33 billion) majority stake of the former electricity producing behemoth.

The £9-billion (Dh40.2 billion) project is now the largest urban regeneration scheme in Europe. Slated for completion in 2021, the seven-phase project is being pitched to Middle Easterners as the equivalent of a Downtown Dubai on the Thames — although, sitting in a riverside cafe watching families frolic in the water fountains, there are a few easy comparisons to Dubai Marina. It’s a gorgeously green location too, with proximity to the sprawling Battersea Park.

The Battersea Power Station restoration is seeing the Grade II-listed landmark morph into an innovative, artsy neighbourhood that is projected to attract more than 40 million visitors a year. The office space is now fully pre-let, with half a million square feet being taken up by Apple for its new UK campus.

Around 1,000 British and international occupiers have already moved into Circus West, the first phase. For those contemplating a high-end purchase, there are a few remaining penthouses at Circus West ranging from £5 million to £20 million. Alternatively, it is possible to buy a re-sale on the open market. Currently, the starting price at Circus West is £1.07 million for a two-bedroom apartment.

But why is this not just another luxury London project focused on luring in cash-rich buyers from the Middle East and beyond? “We are catering here to a very broad range of people, from children all the way through to those who are active but retired,” explained Andrew Jones, director of special projects and Battersea’s sales director for Middle East and North Africa.

Jones also pointed to the fact that as the last major riverside development site in prime central London, it holds a unique appeal. “If you look at the project from a bird’s-eye view, what makes us very different is we don’t sit on a main road. What I think people from the GCC in particular like here is that it’s away from traffic, it’s safe and secure, yet it is not overbearing. The kids can run around, and everybody is very happy,” he said.

Investors from the Middle East have purchased homes in Circus West as their main London home, while others have children at university in the city so have bought a pad for them. Meanwhile, some have bought off-plan in the third phase simply because they are attracted to the idea of owning a property in Frank Gehry’s only residential building in the UK — complete with roof gardens — or a gorgeous Foster and Partners home.

Despite the ongoing Brexit saga, Middle East UHNWI’s poured a whopping $3.3 billion (Dh12.11 billion) into London real estate in 2018, according to Knight Frank’s 2019 Wealth Report. The weakening pound has created an attractive buying environment for dollar-pegged investors from the region, hence a lot of Middle East money has entered London’s prime property market post the Brexit referendum. Indeed, prime London properties are now 40 per cent cheaper for Arab buyers than in June 2014, according to Savills.

So, despite the political turmoil, London real estate appears to be powering on.