Sale of Battersea Power Station Earns Knight Frank Lucrative Bonus Pot

on Oct 1, 2012

On 1 October 2012, The Times reported that the sale of the huge derelict Battersea power station on the south bank of the River Thames helped earn partners at Knight Frank a shared bonus pot of some £65 million.

The residential and commercial property consultancy reported that it made a pre-tax profit of £95.9 million of turnover, which increased by eight percent to £333.9 million. The reported results apply for the year ended 31 March 2012.
!m[](/uploads/story/491/thumbs/pic1_inline.png)Profit and bonus amounts fell from last year’s £101.9 million and £73 million, respectively, with the company attributing the results to investing in the business. “Turnover is up but our costs are up as well because we have taken the decision that we wanted to grow the business because we think it is a good time to grab some market share,” said Nick Thomlinson, a Knight Frank senior partner, as quoted by The Times. “We have taken on a lot more people across the globe and, as is usually the case, it takes people a while before they become revenue-producing.” Mr Thomlinson, however, added that the company’s results were nevertheless “up there among the best.”

Among the transactions which secured the positive results was the sale of the Battersea Power Station to a Malaysian consortium for a reported £400 million. The brick building was offered for sale on the open market at the end of February 2012. “As one of the UK’s most recognisable landmarks, Knight Frank anticipates considerable interest in a scheme that is among the most exciting in the world today,” Knight Frank noted at the time, billing the building as “the last major undeveloped regeneration site in central London.”

As noted by The Times, among the other significant property transactions, contributing to Knight Frank’s profit also include the sale of St John’s Wood Barracks to Ananda Krishnan, one of the world’s richest men, for about £250 million. The company’s residential division also completed the sale of Park Place in Henley, reportedly the most expensive house sold in the UK. In addition, Knight Frank is also leasing the Shard – London’s tallest skyscraper.

Outside the UK, the company completed several notable transactions, namely the sale 8 Kowloon East in Hong Kong for HK$2.51 billion (£200.5 million) and the sale of 215 Adelaide Street & 235 Edward Street in Brisbane for AUS$134.5 million (£86.4 million).
The Times reports that most of Knight Frank’s profits outside the UK are generated from the company’s activity in the commercial sector, whereas in Britain the company’s profit is split roughly 50-50 between the residential and the commercial sector. The company reports that the prime residential market in London has seen very strong results over the past year, with prices rising 11 percent in the past 12 months, and up nearly 50 percent relative to March 2009. The London rental market, however, saw a slowdown in rental growth. Yet, Knight Frank notes in its press release that London’s economy continues to outperform the weaker UK setting and letting volumes have remained strong.


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