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Knocking down Battersea chimneys would be worth £470m more to developers, says EC Harris

A chimney-free Battersea Power station would be worth up to £470 million more to a developer than retaining the iconic London landmarks.

A chimney-free Battersea Power station would be worth up to £470 million more to a developer than retaining the iconic London landmarks.

According to figures compiled by EC Harris for Reuters, the news agency, any development which included the four smoke stacks would commit a developer to £500 million of up-front costs with no chance of any return within two years.

Treasury Holdings £5.5 billion mixed use scheme, which collapsed in December, is the latest in a series of failed developments at the site since the power station closed 30 years ago.

Mark Farmer, Head of Private Residential at property consultancy EC Harris said it was time to set aside the “significant emotion” attached to the site and strive for something more sustainable.

“Any attempt to keep the existing power station building has to overcome some key challenges,” he said. “Firstly, it is impossible to phase the redevelopment of the power station and once you start the renovation you will need to complete it.

“We have all witnessed the spectacle of what has happened to the power station’s condition after it was gutted prematurely in 1989 and then work stopped. Starting work again commits any developer to the best part of half a billion pounds going out of the door in one go with probably two-three years before any income flows back from that part of the development. In the current funding environment that needs someone with very deep pockets.

“Secondly, the financial risks involved in repairing the existing building are significant. Once works are under way there are bound to be unforeseen structural or contamination issues which appear and then add to construction costs and time.”

“These cash flow and risk issues are potentially just as significant as the lost potential opportunity to add £460 million to the value of the scheme by knocking it down. Obviously the major issue is overcoming the historical English Heritage position. The right answer that respects all viewpoints may well be a compromise between complete demolition and a new build replacement.”

Readers' comments (2)

  • £500 Billion of upfront costs eh........Bit Steep!!

    So that saving of £470 million is just a drop in the ocean then.

    Unsuitable or offensive? Report this comment

  • Errr, its £ 500 million.

    Unsuitable or offensive? Report this comment

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