The eagle has landed in Battersea

The American embassy’s decision to quit Mayfair’s Grosvenor Square and migrate south to a neglected semi-industrial strip that currently boasts only a derelict power station, a much-loved dogs’ home and a wholesale fruit and vegetable market is one of the more startling property decisions of recent years.

US ambassador Robert Tuttle has confirmed that his embassy has bought a five-acre site at Nine Elms in a deal with developer Ballymore, which will build a mix of homes, offices and leisure spaces around a new embassy complex.

The project will create a big investment wave south of the river, kickstarting long-awaited regeneration of what should be a key London area, and at the same time it will free up the existing super-prime Mayfair site owned on a 999-year lease by the US embassy.

The West End site is not yet on the market but it is thought it could sell for £500 million if redeveloped for luxury homes, likely to become the world’s most expensive. Mayfair residents, at present blighted by road closures and concrete and steel barricades protecting the embassy, will surely rejoice at the Americans’ surprise departure.

Houses and flats to rent in Battersea
Houses and flats for sale in Battersea

‘A sparkling new riverbank neighbourhood’

The new home of the embassy will be part of the Nine Elms Opportunity Area in SW8. London Mayor Boris Johnson inherited this development framework from Ken Livingstone. It covers, in total, about 450 acres, bigger than Battersea Park itself, with a projected building programme of at least 3,500 new homes.

Nine Elms is dominated by magnificent Battersea Power Station, London’s most high-profile ruin, and is the last remaining section of run-down riverbank left in central London.

Viewed from the Thames, Nine Elms looks stuck in a Seventies timewarp. The power station sits alongside factory sheds and run-down — but still working — wharves. Here, too, is the 57-acre New Covent Garden Market, a huge Royal Mail depot, acres of low-rise business estates and anonymous-looking commercial premises and railway sidings. It is a stark contrast to the posh and primped Pimlico waterfront on the opposite bank of the river.

“No other central district provides such a large-scale opportunity to create a sparkling new neighbourhood where people can live, work and socialise,” says Edward Lister, leader of Wandsworth council.

Already, two “book-end” developments — St George’s Wharf at Vauxhall and Chelsea Bridge Wharf at the Battersea end — have helped prepare Nine Elms for a fresh start.

Houses and flats to rent in Battersea
Houses and flats for sale in Battersea

A £4 billion masterplan

Treasury Holdings, Irish owner of the power station and 38 acres of precious land surrounding it, recently unveiled an updated £4 billion masterplan. If it comes to fruition, this new community will have hundreds of homes, shopping malls, hotels, cafés and a “green” office quarter, contained in project called The Ecodome and featuring a 1,000ft glass “chimney”, taller than Canary Wharf. The chimney (dubbed The Funnel by some sceptics) will lift sun-warmed air up through offices while drawing fresh air into the dome complex below, thus greatly reducing energy costs, say its designers.

New Tube link

Also proposed is a new spur off the Northern line, from Kennington, to link the power station site to the Tube network — to cater for 25,000 employee commuters. At the moment, there is no Tube line running through Battersea.

This vital transport link will help unite Battersea’s grey hinterland with the more glamorous riverside apartment complexes built in recent years.

Wandsworth council and English Heritage have yet to approve the Nine Elms scheme but the planning signals are said to be “positive”.

Meanwhile, the government is backing a major redevelopment of the sprawling New Covent Garden Market, where wholesale traders (who have not yet chosen their developer partner), are proposing a “once-in-a-lifetime” scheme of homes, offices and business space. There will be a continuing food presence in the form of a new “food exchange”, farmers’ market and museum. Some 250 companies (2,800 employees) are currently based at the site, which opened in 1974 after the original market in Covent Garden closed down.

Royal Mail is rationalising its property portfolio and the Nine Elms sorting depot has been earmarked as a prime development candidate too. The land alongside is already controlled by developer Ballymore and includes, incongruously, a smart and glittery Jack Barclay high-end car showroom which is the precise location of the new US embassy.

Relocation of the embassy could take up to five years and has to be approved by the US Congress. “I’m excited about America playing a role in the regeneration of the South Bank,” says Ambassador Tuttle, adding that security and environmental considerations made the site “ideal”. An international design competition will be held to create a showpiece building “fit for the 21st century”.

For all this, American diplomats are unlikely to relish the move from five-star Mayfair to a compound in gritty Battersea, even though the new embassy will be closer to MI6 headquarters, Parliament and the Battersea heliport — handy for visiting VIPs and presidents.

Almost certainly there will be intense debate about security measures and the impact on local residents and businesses. The Battersea Society, a local amenity group, welcomes the “regeneration dividend” but fears the area could be turned into “Fortress Nine Elms” rather than “a civilised and humane public realm.

Top tip: focus on a ‘raw’ location

Despite it being a rather raw location, bold homebuyers and investors who commit to the Nine Elms area now, especially at this low point in the property cycle, should stand to reap rewards in the years to come.

In time, Nine Elms could even become an embassy quarter, leading to a more upmarket area with higher priced homes and greatly improved amenities.

Elm Quay Court, built in the Eighties, is the only completed residential development at Nine Elms. Barratt is building Viridian — 181 apartments right opposite the power station. Prices start from £249,950 for a small studio. Form more information, call 020 3177 1052.

One-bedroom apartments at Chelsea Bridge Wharf are priced from £460,000. Call Berkeley Homes on 020 7720 4000 for more details. At St George Wharf, a series of tower blocks loom over the Thames, creating a dramatic if rather a muscular architectural presence very close to the more modest hulk of the MI6 headquarters.

Aquarius House, the final phase of St George flats, has been released. Prices start from £399,950. Call 020 7627 8699 for more details.

Houses and flats to rent in Battersea
Houses and flats for sale in Battersea