Malaysian pension fund Retirement Fund Incorporated or Kumpulan Wang Persaraan (Diperbadankan) (KWAP) has acquired 80 percent in retail property Intu Uxbridge in West London for £175 million ($264.65 million), the company said.
The purchase price represents a 2 per cent premium to the property’s last valuation of £213.9 million as at December 31, 2013.
Malaysian funds have been seeking out property investment opportunities in the UK. Among the most recent deals was Felda Investment Corp’s acquisition of a four-star hotel in London’s upmarket Kensington area for £60 million ($90.74 million), just last month.
The former owner, Intu Properties plc will hold the remaining stake in the shopping centre and continue to manage the 71 stores, cafes, restaurants and a cinema.
Under the deal, KWAP will enter into a joint venture partnership with Intu Properties.
Intu Properties CEO David Fischel said in a statement that “the transaction is a useful step in recycling our capital into our substantial development pipeline”.
The sale was in line with Intu Properties’ strategy of recycling capital into its £1.2 billion development pipeline. Net rental income for Intu Uxbridge in 2013 was £11.7 million.
Intu Properties has 18 shopping centres across the UK under its management.
“We are delighted to have entered into this partnership, establishing a relationship with a significant overseas investor and demonstrating the investment demand for prime UK shopping centres under the management of a specialist operator such as Intu,” Fischel added.
KWAP had $30.18 billion worth of assets under management as of September 30, 2014. The fund achieved a gross return on investment and time weighted rate of return of 7.05 per cent and 10.03 per cent in 2013.