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Thursday, May 31, 2012

EPF denies bidding for Battersea plant


KUALA LUMPUR, May 31 — The Employees Provident Fund (EPF) has denied news reports in Britain that it has submitted a RM1.8 billion bid for the iconic Battersea power station in London.
Bloomberg and the Financial Times had quoted a report by property researchers CoStar that the state pension fund had beat out top-flight football club Chelsea FC to buy the highly-sought after asset in the British capital.
But EPF told The Malaysian Insider "we are not bidding at all" for the 39-acre site just south of London's financial district.
"We were approached by parties bidding for the Battersea plant but we have made no commitment," its public relations general manager Nik Affendi Jaafar said, but refused to say who had approached the fund which controls assets worth close to RM500 billion.
But The Malaysian Insider has learnt that SP Setia had approached EPF to revive its takeover bid after its redevelopment plans for the power plant were rejected last year.
CoStar had said in its report that EPF is expected to join forces with SP Setia, Malaysia’s largest listed property developer by revenue, and RREEF, Deutsche Bank’s real estate arm, to convert the iconic power plant into a mixed development worth close to RM7 billion.
The purchase would have brought the spending spree by government investment funds into the British capital’s property market, considered a safe haven in the current global economic uncertainty, to nearly RM10 billion in the past 18 months.
“While the pension fund is said to be in pole position to complete the deal, no exclusivity agreement is thought to have been signed yet,” the Financial Times had reported last night.
The news came a month after Chelsea’s Russian owner Roman Abramovich tabled a bid that would have led to the power station being turned into a 60,000-seat stadium for his club that recently became champions of Europe.
The power station, built in the 1930s, was shuttered in 1983 and has featured heavily in UK pop culture, appearing on album artwork for bands such as The Beatles and Pink Floyd.
Despite being the subject of several failed takeover bids, including plans to turn it into a theme park, concert venue and an office development, its prospects took a nosedive in the recent financial meltdown and Treasury Holdings was forced to hand it over after lenders lost faith that it could find a buyer.
But it recently became a highly sought after asset as investors fought over land in and around one of the world’s top financial centres with Malaysian state investment funds dedicating at least RM10 billion to buying up property in London.
The haj pilgrims fund Tabung Haji was the latest to join the fray, announcing last month that RM1 billion has been set aside.
Permodalan Nasional Berhad (PNB) completed a deal in March to buy major London landmark One Exchange Square in the city’s financial district for £500 million, bringing the state-owned asset manager’s buying spree in the British capital the past year to over RM4 billion.
It was also reported to be seeking a £628 million five-year term loan to help finance its shopping spree on three landmark London properties, a Thomson Reuters publication, Basis Point, reported earlier this month.
This is despite plans to buy the 350,000 square feet Woolgate Exchange building in the city’s financial district for RM1.27 billion falling through at the eleventh hour in April.
EPF also borrowed £300 million in December in its first offshore loan to fund the acquisition of three London-based properties.
It was also reported last August to be in talks to purchase British supermarket chain Sainsbury’s distribution centre outside central London for RM400 million, and two more properties in London for a total of RM1.5 billion.
This is in addition to an office building the state pension fund acquired in London last November for RM780 million as part of plans to invest up to RM5 billion in the British property market.

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