Sime Darby group chief operating officer, Abd Wahab Maskan, said the project has attracted interests from Malaysia as well as other countries, which included large property development investment companies.
“There are interest shown by those who had suggested sub-joint venture and possible booking of retail blocks,” Abd Wahab told Malaysian reporters on the sidelines of the Battersea familiarisation tour recently.
Abd Wahab, who is also managing director of Sime Darby Property Bhd, said residential and commercial sales launches for the phase one of the project will take place next year with construction work starting in the second half of 2013.
He said the project was expected to attract interests because of its location on the South Bank of River Thames, near the upmarket boutique shopping district of Sloane Square and the Battersea Park, the green space in the London Borough of Wandsworth.
Sime Darby has a 40% stake in the special-purpose vehicle, Battersea Project Holding Co Ltd, which has acquired the power station site for £400 million.
SP Setia Bhd has 40% and Employees Provident Fund 20%.
Abd Wahab said the £400 million for the 15.8-hectare site was a good price based on an estimation of 5% of its gross development cost.
“In Malaysia the ratio is at 25% to 30% of development cost while in Singapore and other big cities the percentage is at 30 to 40,” he said.
“This shows that the land cost in the power station site is lower than its development cost,” he said.
In terms of the expected profit margins from the investment, Abd Wahab said when the group invested in real estate, the minimal margin expected was 25% to 30%.
Abd Wahab said there was a possibility of better contributions from this project when the global economy improved and from initiatives by the UK government to increase investment in London as well as infrastructure projects surrounding the Battersea site.
“We anticipate that interests from global investors for the London properties are still there, especially those who are looking at London as a major investment destination,” he said.
On funding for the project, he said, out of the £400 million paid for the site, £300 million will be funded via borrowings while the rest as well as other costs, will be from equities from the three parties.