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Saturday, April 10, 2010

Britain’s weak economy entices local investors

BRITAIN’S low interest rate environment and the weak pound sterling has drawn Malaysian investors over the past year to enter into joint ventures or take up equity interest in property development .

Robert Ang ... ‘The European and British economy are pretty depressed but this can be seen as a good opportunity (to invest in these markets).’

This trend is expected to continue as investors eye opportunities there. Savills Rahim & Co’s recent £100mil land deal involved a Malaysian firm taking a 10% stake in the deal, says managing director Robert Ang.

“It is a private company with property development experience in Malaysia,” he says.

The main parties involved in the deal is Native Land, one of London’s leading residential developers, and Grosvenor, a privately owned property group.

According to a press release from Native Land, the 2-acre development site currently forms part of Holland Park School.

Planning consent has already been granted for 72 private luxury residential apartments, 78 car parks and a residents’ only leisure facility on the 2-acre site.

Holland Park’s location is equivalent to Bukit Tunku in KL, says Chris Hahn, manager for corporate real estate and overseas business development at Savills Rahim.

“It’s not smack in the city centre but just beyond it. It is home to many of Britain’s corporate figures, including Sir Richard Branson,” he says.

Prime central London locations include Chelsea, Mayfair, Knightsbridge and Kensington.

The Native Land press release said the land purchase was one of the most significant land deals in prime London residential development in the last 12 months.

To date, Native Land and Grosvenor have worked together on three other luxury residential projects in London.

The most recent is Neo Bankside, a residential development promoted by Savills Rahim last year.

Last year, another Malaysian investor invested £6mil in a 50:50 joint venture project to build a five-storey office and residential building located in Chelsea, a prime London location.

The proposed plan is to have 10 units of apartments priced between £1,200 and £1,300 per sq ft.

The apartments are expected to be put on sale in a few months time, says Ang.

Last September, AMDB Bhd invested £50.5mil in two freehold office buildings in Paddington, London. Banking icon Tan Sri Azman Hashim owns 53% of AMDB. His main asset is AMMB Holdings Bhd.

The properties consist of two buildings constructed in 1960.

The first is 40 Eastbourne Terrace, a 83,000 sq ft grade A building refurbished in 2006.

It is fully tenanted with a total rent of just over £2.9mil a year until 2016.

The other building comprising 60,000 sq ft over three blocks of multi-let office and retail accommodation with an annual rental of £1.7mil.

Ang is helping to broker a fourth land deal involving Malaysian interest, keen to enter into a joint venture.

“The European and British economy are pretty depressed but this can be seen as a good opportunity (to invest in these markets),” he says.

By The Star

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