British bidders for London's landmark Battersea Power Station were "noticeable by their absence", said the man who sold the site to a Malaysian group, underlining the city's appeal to overseas investors looking to protect their wealth.
The 39-acre site on the south bank of the River Thames came onto the market after a £5.5 billion by Treasury Holdings for homes, shops and offices collapsed in December.
It was placed into administration by NAMA and Lloyds Banking Group.
Yesterday it was bought by a Malaysian consortium for £400 million (€500m), beating bids from about 15 others that selling agent Knight Frank said came from as far afield as Brazil, China, South Africa and Kazakhstan.
"The Brits were noticeable by their absence from the bidding process," said Knight Frank's Stephan Miles-Brown, adding London real estate had become the target for overseas cash amid the financial turmoil of recent years.
"In the 1980s, the Chelsea Harbour scheme was developed not far from Battersea Power Station," he said. "Bovis Homes and P&O were behind that. Times have changed."
Malaysian buyers have bought a string of large office blocks in London's main financial district in recent years and the Shard skyscraper, the newest addition to the city's skyline that opened today, was funded by the state of Qatar.
Overseas buyers have invested £15.8bn in London offices since 2010, 64% of the total, CBRE said, and foreign ownership of the City financial district stands at 52%, according to Development Securities.
The Malaysian consortium, which includes developer SP Setia , Sime Darby Bhd and a subsidiary controlled by the Employees Provident Fund pension fund, said in a statement the site will be worth £8bn after 15 years of building work, though they conceded the schedule may slip.
The consortium was incorporated in the Channel island of Jersey, a location commonly used as a tax haven and base for investors seeking anonymity.
"There is no assurance that (the) external factors may not delay completion of the project," they said, referring to delays that can occur during construction work, a statement with added resonance given the site has been the subject of repeated failed redevelopment attempts in the 30 years since it closed.
Other failed bidders included European soccer champions Chelsea, owned by Russian billionaire Roman Abramovich. The sum the football club offered in an attempt to turn the protected building into a new stadium was described as "way off the pace" by a source close to the process.
The decaying edifice on the south bank of the River Thames, which is Europe's largest brick structure with white art-deco chimneys, has been a recognisable silhouette on the London skyline for 80 years.
The Malaysian team plans to keep the chimneys despite suggestions the protected site would be more financially viable for a developer if it was demolished, a move that would have provoked a strong backlash among the British public and politicians due to the affection many hold for it.
Its architect was Sir Giles Gilbert Scott, who also designed London's famous red telephone boxes. It also featured in the Beatles' film Help!, Pink Floyd's Animals album and more recently in the Batman film The Dark Knight.
Before seeing a return, the new Malaysian owners will need to spend several hundred million pounds extending London's tube train network to Battersea and preserving the hulking brick edifice in a deal that marks SP Setia's first foray into London.
"We are very proud to be part of London's most important and central urban regeneration site and are looking forward to bringing this great iconic building back to life once more," SP Setia chief executive Kee Sin Liew said.
London Mayor Boris Johnson said the deal represented "light at the end of the tunnel" for a long-neglected part of London.
"Given its history, people said we couldn't do it, but we did," said Miles-Brown, adding the lenders would recoup their money.
The Malaysian companies plan to use some borrowing to fund the project though they will decide the exact amount at a future date, the statement said
"My concern was that someone would try and use a lot of leverage, but the consortium has a strong balance sheet," Miles-Brown said. "This was not a project for the faint-hearted."
