Malaysia’s EPF sells London office property to Chinese Estates for $226m

A vote leave supporter holds a Union flag, following the result of the EU referendum, outside Downing Street in London, Britain June 24, 2016. REUTERS/Neil Hall

Malaysia’s Employees Pension Fund (EPF) has divested its London office property at St James Square in London’s West End for $226.3 million (GBP 175 million) to Hong Kong billionaire Joseph Lau’s firm Chinese Estates.

EPF bought the property in August 2011 for $191 million (GBP 147.5 million) and put it up for sale earlier this year along with another London asset, Tower Bridge House, owned by the pension fund purchased about the same time.

Chinese Estates, a Hong Kong-listed investment holding company, announced at the stock exchange last week of the acquisition of St James Square property which will be held as investment property for long term capital growth and rental purpose.

“It is expected that the target property can generate a stable and recurrent income to the Group. It also enables the Group to expand and widen its presence in the property market and benefit the business development of the Group in UK,” the firm said in its filing.

A space of 80,000 square feet and a grade A office accommodation arranged over lower ground, ground and 6 upper floors, it is fully multi-let with a current annual rental income of approximately GBP7.9 million.

The asset sale is said to be at a net initial yield of 4.45 per cent and was sold by Savills Investment Management on behalf of EPF.

The sale from EPF comes two years after the pension fund had sold its nine-storey 1 Sheldon Place in April 2015 for GBP 210 million to UK-listed REIT British Land. It used to hold the asset jointly with Malaysian Retirement Fund Inc (KWAP).

However, currently the pension fund looks to be in a mood to monetize its overseas property holdings which many believe may be a move to bail out the government which is grappling with claims after a corruption scandal involving government-owned fund 1MDB. The move is also seen as a bid to repatriate funds to fuel local economy that has suffered amid weak oil prices and an equally weak local currency, the Ringgit.

Nevertheless, the exit for EPF is an opportunity for other Asian investors who may see London as an investment destination as confidence faltered after the Brexit.

Also Read:

Malaysia’s EPF mulls direct investments in natural resources in bid to diversify

Malaysia: KWAP buys KL-located CAP Square Tower from German UIRE for $121.1m

Malaysia’s EPF buys 49% in OSK’s Australia project for $115.9m

Malaysia’s pension fund EPF exits Felda investment

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.