Tabung Haji expects good returns from new London property

The purchase of a six-storey building by Lembaga Tabung Haji (TH) in London that was finalised on July 12 is expected to provide good returns, protect the interests of, and provide added value to depositors.

TH group managing director and chief executive officer Amrin Awaluddin said the purchase was TH’s sixth investment in the United Kingdom (UK) and is expected to provide stable returns of an estimated 5 percent every year.

“TH, through its subsidiary, will also implement refinancing to reduce the cash capital on the property,” he said in a statement today.

He added that the property, located in a strategic area in the middle of London, was freehold and rented by the UK Transport Ministry for a period of over 11 years.

He explained that the purchase would provide many advantages due to a long-term lease that could not be cancelled and a rental rate that increased yearly, which would boost the value of the property.

“The value of the property is also expected to continue to rise due to the annually increasing rental rate, its strategic location where demand exceeds supply for high-profile assets in London, the largest financial centre and one of the main property investment destinations of the world.

“TH also does not have to pay for the building maintenance cost as all of it is borne fully by the tenant, the UK Transport Ministry,” he said.

He also said that the UK was at the top of the Global Real Estate Transparency Index 2022 as the most transparent country in terms of property, something that attracted foreign investors worldwide.

Amrin added that the 179,869 square metre building, known as Great Minster, 33 Horseferry Road, Victoria was purchased below market value based on assessments by independent professional valuers.

“The building that houses the UK Transport Ministry in London worth £247.5 million (around RM1.3 billion) on July 12 was purchased below the current market value of £250 million based on assessments by two independent professional valuers, CBRE and Colliers,” he said.

The investment was also a restructuring of all of TH’s property portfolios, involving the sale of existing properties that are used for new investments that offer better returns, he said.

“TH investments are in line with the set risk level and follow the strategic allocation of assets to achieve a balanced portfolio and risk variables to obtain a stable and sustainable rate of returns,” he added.

- Bernama