Malaysia pension fund KWAP to sell London office asset for $399m

88 Wood Street, a three-block commercial development in Central London. Image from Rogers Stirk Harbour + Partners website.

Malaysia’s second-largest pension fund, Kumpulan Wang Persaraan (Diperbadankan) (KWAP) is mulling a £270-million ($399.34 million) sale of an office building in central London, following the government’s call on state-owned funds and related companies to repatriate funds for propping up the country’s soft stock and currency markets.

Bloomberg reported that KWAP, or Retirement Fund Inc, is finalising an agreement to sell an office building at 88 Wood Street in the City of London that it bought in 2013 for £215 million, quoting the fund’s chief executive officer Wan Kamaruzaman Wan Ahmad.

The buyer was not revealed.

As well as getting a higher sale price, the fund will benefit from the sharp rise in sterling against the ringgit over the past two years, the report noted.

“We are selling the property because we stand to benefit from real estate and foreign-currency gains,” Wan Kamaruzaman told the news wires. “It’s also in line with the government call to repatriate gains back to invest in the domestic market.”

KWAP has about MYR120 billion ($27.96 billion) of assets.

Malaysia’s stock market and the Ringgit have been dragged by poor sentiment stemming from financial and political controversies related to Prime Minister Najib Razak’s dealings with the state-owned 1Malaysia Development Bhd, coupled with concerns about the effect of higher US interest rates on Malaysia and other emerging markets.

In August, the government urged state funds and government-linked companies to repatriate earnings from the more than MYR500 billion ($116.5 billion) worth of investments they have made abroad.

Razak said last month that government-linked companies plan to bring home assets worth a total MYR627 million ($146.07 million) during 2015.

KWAP expects to be able to repatriate the funds back to Malaysia by the end of 2016 first quarter to invest in local markets and Malaysia’s stock market may recover next year as a result of recent government measures, Wan Kamaruzaman told Bloomberg.

KWAP is also one of the major funds contributing to a MYR20 billion ($4.7 billion) capital injection into ValueCap Sdn Bhd, which the fund-management company will use to shore up local markets.

Other contributors to ValueCap are sovereign wealth fund Khazanah Nasional Bhd and state-owned investment fund Permodalan Nasional Bhd.

“Our market looks reasonably attractive in 2016 after two negative years,” Wan Kamaruzaman said, adding that ValueCap is expected to play a significant role in the local market as it supports undervalued shares.

He opined that foreign investors will return to Malaysia next year given the cheap market after the recent drop in the currency. He also believed that the Ringgit is set for a rebound, possibly strengthening to 3.80 to the US dollar from the current 4.30 range.

The benchmark FTSE Bursa Malaysia index has fallen 4.3 per cent so far this year after dropping 5.7 per cent in 2014, while the Ringgit has tumbled 19 per cent against the US dollar, impacting foreign investors who have pulled MYR19.2 billion from local stocks thus far, more than double the MYR6.9 billion of outflows for the whole of 2014.

Also Read: 

Malaysia: PMB to miss AUM target; ValueCap arranges financing

Malaysia’s Najib delivers $4.6b boost for stock market

Malaysia’s Valuecap plans to grow its AUM to $2b by year end

Malaysia’s KWAP invests $265m in London mall

Malaysia’s EPF plans to provide varied investment options; sells London property for $318m

Malaysia’s FIC diversifies portfolio, launches $9m student housing property in UK

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

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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.