Takaful Ikhlas Sdn Bhd, a wholly-owned subsidiary of MNRB Holdings Bhd, wants property to account for at least a fifth of its investment portfolio for the year ending March 31 2011.
The takaful operator recently made its maiden property investment when it paid RM87 million for its new corporate office, IKHLAS Point, in the fast-developing commercial area of Bangsar South, Kuala Lumpur.
Its president and chief executive officer, Datuk Syed Moheeb Syed Kamarulzaman, hopes the investment will be the beginning of its plans to broaden income through properties.
The investment portfolios of takaful operators are similar to their conventional counterparts' and include equity, cash and bonds.
"We are keen to buy rentable office premises that offer long-term sustainable revenue. However, we are cautious in our investment policy, which trends towards capital preservation," Syed Moheeb told reporters after a media tour of IKHLAS Point.
The company bought the building, which include two office blocks, using funds from contributions paid by policyholders, which number about 1.3 million currently.
"We are, in fact, renting the building from our policyholders. But, more importantly, the investment will ensure rental income for our policyholders," Syed Moheeb said.
"This is a really good investment for us because the yield is higher. We bought this building at a very low price during the recession," he said, adding that the property had already appreciated by more than 26 per cent in just one year.
The purchase was done through the company's Family Fund, which was given the approval by the operator's investment committee in July 2008.
Takaful Ikhlas' total assets currently stand at more than RM1.2 billion, out of which 60 per cent comes under its Family Fund and the balance under its Shareholder Fund and General Risk Fund.
Depending on the size of the investment, future property investments could be a mix of the funds available.
The company is also looking to house its existing 10 branches in its own buildings in future.
All the branches occupy rented premises at present.
Deputy Finance Minister Datuk Dr Awang Adek Hussin officially launched IKHLAS Point yesterday.
Takaful Ikhlas also spent another RM10 million to renovate the property, which has a build-up of 99,286 sq ft.
The company occupies all 10 floors in Tower 11A as well as another three floors in Tower 11, which also has 10 floors. The other seven floors are rented out.
By Business Times (by Rupinder Singh)
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