EPF considers disposing of UK property

The Employees Provident Fund (EPF) says it may dispose of the Reading International Business Park, depending on whether it receives the right offer. – The Malaysian Insider file pic, October 29, 2015.

The Employees Provident Fund (EPF) is considering disposing of one of its properties in the United Kingdom (UK), the Reading International Business Park.

Chief executive officer Datuk Shahril Ridza Ridzuan said the fund was constantly receiving offers for its assets in the country.

"At this point in time, it really depends on whether we have the right offer and right pricing that we think makes it worthwhile to dispose of an asset," he said.

Shahril Ridza was speaking at a media conference on the sidelines of the Global Private Equity Summit 2015 in Kuala Lumpur today. 

Also present were EPF chairman Tan Sri Shamsudin Osman and deputy chief executive officer (Investment) Mohamad Nasir Ab Latif.

Shahril Ridza said this when asked on the status of the Reading International Business Park.

Reading International Business Park was developed in 2001 by the Arlington Business Parks Partnership Fund (ABPP). 

EPF, through Deutsche Asset & Wealth Management, bought the property for £140 million (RM915 million) in 2011 from ABPP. It is let in its entirety to Verizon on two separate leases with six years to expiry.

According to a news report, EPF has made an offer of £150 million for the luxury property.

Quoting industry sources, the report said the fund is working with Deutche Asset & Wealth Management for the disposal and has appointed an agent, DTZ, to sell Reading International Business Park.

The sources also said EPF could raise more than RM250 million, capitalising on rising real estate prices and foreign exchange if the deal is closed in the near term. 

As of June 2015, EPF's global investments made up 25% of total
investment assets and contributed more than 40% to the fund’s total cumulative year-to-date income.

Apart from the UK, EPF also invests in other overseas property markets such as France and Germany. 

Shahril Ridza said the fund was on track to give out a dividend of 2.5% plus inflation this year.

"It will still depend on the performance of third and fourth quarters. Given where the market has moved since the middle of the year, I think we would be cautious about making any predictions for the year.

"It is fairly a difficult year for the markets. Bursa Malaysia itself is down by about 10% since the start of the year and the same weaknesses were seen in all markets around the world," he said. – Bernama