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Saturday, October 22, 2011

Malaysia funds' appetite for overseas properties

Kuala Lumpur: More Malaysian investment funds are buying properties overseas to diversify risk and portfolio and the trend is set to continue in 2012.

Rahim & Co managing director Robert Ang said they are taking advantage of the current global downturn which has forced owners to sell properties below market price.

The UK is still the hottest market for Malaysian investment funds and plenty of buildings are for sale currently, especially in London.

“The banks are not lending as they used to. In fact, they are trying to recover some loans so there is a lot of pressure from owners to sell now,” he told Business Times in an interview yesterday.

“The simple investment strategy is to buy at low prices and sell at a handsome profit. We can expect major deals next year,” Ang said.

The Employees Provident Fund (EPF) has in the last eight months bought five grade A commercial buildings in central London for about RM5 billion.

This is after the government allocated some RM10 billion for the pension fund to buy properties overseas to diversify its portfolio so it could earn better.

The pension fund last year appointed ING Real Estate Investment Management and RREEF as consultants.

Ang said the EPF is currently looking for commercial buildings in London, Australia and Europe to spend the balance RM5 billion.

He also said that Permodalan Nasional Bhd, which has invested in properties in Australia last year, is eyeing several buildings in the UK.

Last year, PNB bought an upmarket office block in Brisbane, Australia, called Santos Place, reportedly for more than A$290mil (RM928 million).

The 37-storey building has 373,508 sq ft of lettable space with about two-thirds of that leased to Australian oil and gas giant, Santos.

Ang said the Retirement Fund Inc (KWAP) has also expressed interest to buy properties in London while pilgrims fund Tabung Haji is looking at syariah-compliant buildings in Australia.

He said KWAP is seriously looking at buying something in London and is mulling setting up a representative office there.

Rich Malaysians are also snapping up properties for their personal investment in the same markets.

"We have major shareholders of listed companies who are buying properties in London and Australia as part of their private investment. There were several deals done recently where they paid RM50 million to RM100 million for several properties," Ang said.

By Business Times

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