One of the aims of this blog has been to animate the geographies of the NAMA portfolio.  There has been a lot of discussion here recently about the Ghost Estates that will be brought into NAMA.  Of course, such property parcels do not comprise the entirety of the NAMA book, and in terms of ‘market potential’ some sites will no doubt hold more hope than others.  One of the sites being heralded as a potential ‘winner’ is the Battersea Power Station site in London, at the heart of the well-connected Nine Elms area along the Thames River, a prime (re-)development site in a city which horizontal expansion is highly constrained by strict planning regulations that protect London’s so-called ‘greenbelt’.  The site is currently owned by REO, a firm majority owned by Irish company Treasury Holdings (who coincidently are also NAMA’s landlord).  REO bought the 40-acre site in 2006 for £400 million (€532 million), using loans from a variety of banks, of which Bank of Ireland forms the majority share, with plans to develop the site into seven million square feet of mixed-use residential, retail and office space.  As such, this emblem of British industrial heritage has found its way into the auspices of NAMA, serving as indication of the reach of Irish capital into international markets, and of the relational production of urban landscapes in the post-industrial period.

The Battersea Power Station started producing electricity in 1937 and progressively ceased its activities during the 1970s and 1980s.  Since then, the future of the site has been the object of much quarrel and struggle between near-by residents, the local authorities, developers and various people and groups with an interest in preserving the power station and its surroundings for its cultural value.  From the 1980s onwards a campaign has been in place to try to save the building as part of British national heritage.  Seen as an important cultural icon in London, the power station was used on the cover art for the 1977 Pink Floyd album Animals, in addition to albums by a number of other groups, and as an emblem of Twentieth Century industrialism, it has taken its place within the vocabulary of popular cultureOver the years a number of development plans have commenced for the site, including an early plan to turn it into a theme park around Britain’s industrial history.  Current owners REO hired architect Rafael Viñoly to draw up an ambitious master plan for the site, the biggest ever seen in London.  Central to this plan was the division of the site into ‘character areas’ each with different functions, to utilise part of the power station to produce energy through biomass and waste, and to develop the “first zero carbon office space in Central London”.  Having been refused planning permission on the first go-around, a scaled back application is currently in the consultation phase.

As previously highlighted here 21% of the NAMA portfolio is made up from properties in the UK.   Of this, the Battersea site is certainly one of the most significant.  Speaking of the site’s induction into NAMA, Treasury managing director John Bruder was resolutely positive:

“The good, the bad and the ugly will be going in…There is no shame in being a Nama client no matter how good or how modest your property development loan is, once it is over €5 million…. Essentially Nama will be the only game in town for a period of time. The Irish banks had too much property development loans on their books – they will soon have no development loans.”

NAMA, for its part, will presumably be only too happy to have an iconic development such as this in a portfolio that must contain much in the line of hyper-inflated (and deflated) farmland.  The Battersea site is not devoid of its own set of problems, however.  Since late last year REO have been looking for a partner to invest with them in the site.  While the London market will recover quicker then most, it is likely that investor confidence is still likely to be waning.  The existing infrastructure (mainly made of steel) requires very significant investments to refurbish it owing to damages caused by 20 years of both flooding and vandalism following the removal of large chunks of the roof in the late 1980s when the British industrial history theme park redevelopment project started and quickly came to halt.  Furthermore, the developers face opposition from a strong community group who seek alternative actions for the site.  As a commentator in the Londonist recently stated, after the first REO application was refused:

“Over 25 years since it breathed its last fumes into the London fog, Battersea Power Station remains a blot in the copybook of countless developers and architects, and as yet another scheme is run through and rejected, the building’s gradual decomposition will continue. Perhaps it should be this way, a symbol of the flaws and fallacies of our developmental strategies.”

At the moment, despite its prime location in Central London, Battersea looks much more like an emblem of urban degeneration rather than regeneration.  This is not to say that REO’s plans for the site will never come to fruition.  However, as one of the jewels in the crown of NAMA’s property portfolio, perhaps the Battersea Power Station site is still a long way from realising substantial returns for the Irish taxpayer.

Delphine Ancien and Cian O’ Callaghan