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REFILE-REO gets Battersea project nod, hurdles remain

LONDON, Nov 12 (Reuters) - Debt-laden property company Real Estate Opportunities has won a key red-tape battle in its quest to develop London's Battersea Power Station, but has yet to finance the 5.5 billion pounds ($8.8 billion) project. REO director Rob Tincknell said on Friday the company still has to find a financial partner for the 10.1 million square-feet development, and pass several other potential planning hurdles, after the project won planning consent from Wandsworth Council. The news propelled REO's shares higher, and by 1414 GMT they were up 57.5 percent at 3.9 pence. The broader index of UK property stocks was flat. "We are hopeful of having somebody (a finance partner) tied up for the earlier part of next year," Tincknell said, adding REO was looking for a 50/50 partner for the project, either with an individual or a consortium. He said REO had already spoken with many potential investors from around the globe, including sovereign wealth funds, private equity firms, wealthy families and property companies. Tincknell declined to name the would-be investors, or give their location. "All of those potential investment parties have been anxiously awaiting the planning consent, and we are confident that is now in a form that will allow them to go to the next stage, get more stuck in to due diligence," Tincknell said. However, the reincarnation of Europe's largest brick building as a residential, retail and office development has yet to be signed off by London Mayor Boris Johnson and the Secretary of State for Communities and Local Government. "At the moment we're forecasting a start (date for work on the development) in 2012 and completion in 2026," Tincknell said in the conference call. Battersea's imposing white brick chimneys have been a feature of London's skyline for almost 80 years, but a series of owners have failed to renovate the building since it ceased power production nearly three decades ago. In October, REO posted a much narrower first-half loss, saying its portfolio values had stabilised. (Reporting by Andrew Macdonald; Editing by Mike Nesbit) ($1=.6232 pounds) (See www.reutersrealestate.com for the global service for real estate professionals from Reuters) Keywords: REO BATTERSEA/ REFILE (andrew.macdonald@thomsonreuters.com; +44 (0)207 542 9667; Reuters Messaging: sinead.cruise.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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