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Boost for NAMA as Chelsea announce bid to take over Battersea Power Station

The power station is one-third held by NAMA – and Chelsea want to turn it into an iconic 60,000-seater stadium.

Image: John Stillwell/PA Archive

CHELSEA FOOTBALL CLUB have confirmed a bid to buy the iconic Battersea Power Station site in London, from companies which owe around €130 million to Ireland’s National Asset Management Agency.

The club this afternoon confirmed it was seeking to buy the 39-acre site, in partnership with a property development partner Almacantar, as part of plans to build a new 60,000-seater stadium for the club.

The site is owned by a number of subsidiaries of Real Estate Opportunities (REO), which itself is majority owned by Treasury Holdings, the vehicle of developers Johnny Ronan and Richard Barrett.

REO had originally borrowed from Bank of Ireland and Bank of Scotland to fund the purchase of the site in 2006; NAMA had taken over the Bank of Ireland loans in 2010.

Ernst & Young were appointed as administrators to the project late last year after the REO subsidiaries had failed to repay around £324 million (€383 million) in loans to NAMA and Lloyds Bank, which held around two-thirds of their debts.

In parallel to this, a Cantonese developer called in loans to REO worth £178 million (€210 million). All in all, it is thought that REO took out debts of £502 million (€618 million) in acquiring the site, which has been on the market since February with a guide price of £500 million.

No guarantee of moving

Chelsea said its plan did not necessarily mean it would be successful in taking over the site – or even that it would be leaving its current ground at Stamford Bridge.

“We are not the only interested parties and there is no certainty that we will be successful,” the club said in a statement.

“We also appreciate that we have many significant hurdles to address if we are to build a new stadium on the site, including winning the support of our fans, the [Chelsea Pitch Owners] shareholders and local Wandsworth residents, as well as securing the approval of Wandsworth Council, the Greater London Authority and heritage authorities.”

Chelsea, whose Russian owner Roman Abramovich is worth an estimated €9.2 billion, would face some logistical difficulties if developing the site: planning stipulations require that the four towers at Battersea be retained in any future developments.

The area is also largely inaccessible to public transport – though the club says it is willing to part-fund the proposed extension to the London Underground’s nearby Northern Line – while the station still houses old industrial plants which would first need to be removed.

There is also another snag in the naming rights to Chelsea: the freehold to the club’s current Stamford Bridge stadium is held by Chelsea Pitch Owners PLC, which leases it back to the club on the condition that it keeps the name ‘Chelsea Football Club’.

Abramovich has been rebuffed in previous attempts to buy a controlling share in the PLC, meaning a plan to bring the club away from Stamford Bridge could result in the four-time English champions having to change their name.

Historical site with historical interest

Reports of Chelsea’s interest in the Battersea ground had first emerged in November, when it was reported that Abramovich had been in exploratory talks with NAMA about the possibility of taking over the site.

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Despite the construction of three major new stands in the last two decades, Stamford Bridge still only has a capacity of around 42,500 – considerably less than that of Manchester United’s Old Trafford (76,000) or Arsenal’s Emirates Stadium (60,000).

The purchase of Battersea by REO in 2006, for €532 million, was one of the most prominent purchases of overseas property by Irish investors during the credit boom of the last decade.

REO had secured planning permission in 2010 to build 3,400 homes and 10 million square feet of offices and retail space on the site, but had struggled to find investors willing to help fund its construction.

NAMA and Lloyds had been reportedly keen to ensure that any proposals for the sale and development of the site would acknowledge the site’s history.

Chelsea FC said its plans for the site would include the restoration of its four chimneys and turbine hall, which would form a “unique architectural backdrop to a world-class stadium with a capacity of around 60,000 seats”.

“As well as a new home for our club, the development would include a town centre with substantial street-level retail shops, affordable housing and offices – all of which would benefit Wandsworth and bring a significant number of permanent jobs to the area.”

It had previously been speculated that Chelsea’s plans could incorporate the planning permission secured by REO in its own development. If the club’s bid is successful, Chelsea would become the site’s fifth owner in 30 years.

About the author:

Gavan Reilly

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