Decrepit London landmark shows property pain

Mon Jan 4, 2010 7:17am EST
 
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By Lorraine Turner and Sinead Cruise

LONDON (Reuters) - A gust of wind howls around Battersea Power Station, an industrial wasteland by the Thames whose coal-fired furnaces were once used by the Bank of England to burn millions of pounds worth of banknotes.

A couple of tourists who have ventured off the beaten track around Buckingham Palace stand on tiptoe as they strain to photograph the gargantuan structure over a high screen.

As debt-laden developers face the ruins of recent extravagance, the Power Station -- Europe's largest brick building -- is a decrepit symbol of the past profligacy and present pain in Britain's real estate market.

In World War Two the central bank turned to Battersea to burn 120 million pounds of notes it had not had time to cancel as it introduced a new design against feared enemy forgeries.

Now Battersea must consume much larger sums if it is to remain standing.

The art-deco icon, which won global recognition through appearances in movies such as Stanley Kubrick's "Full Metal Jacket" and on the cover of Pink Floyd's 1977 album "Animals," has been derelict for over a quarter of a century.

It has already passed through numerous developers' hands since stopping power production in 1983 as Britain shifted to oil, gas and nuclear.

Developers now are courting investors for a 5.5 billion pound ($8.9 billion) redevelopment just as banks remain focused on unscrambling exposure to commercial real estate. The market has shown signs of recovery recently but is still treacherous.   Continued...

 
<p>A worker is seen reflected in water as he passes near Battersea Power Station in west London in this December 4, 2009 file photo. As debt-laden developers face the ruins of recent extravagance, the Power Station -- Europe's largest brick building -- is a decrepit symbol of the past profligacy and present pain in Britain's real estate market. Picture taken December 4, 2009.</p>