Takaful Malaysia to invest in London properties

KUALA LUMPUR: Takaful Malaysia Bhd is looking at diversifying its investment portfolio by acquiring properties in London this year.

Group managing director Datuk Hassan Kamil said the Islamic insurer has RM200 million in its war chest.

"We are scouting for commercial buildings or offices within a 30km radius of central London," Hassan told Business Times recently.

It is learnt that the company has appointed an adviser to search for properties by the end of this month.

He viewed that a depreciated currency and a devalued market were making London properties a worthy investment.

"It is a good time for investments, both for potential capital gains as well as reaping good yields," he said.

Hassan believed that yields of between 5.5 per cent and 8.5 per cent could be achieved in London's main office and financial district, where demand was hit hard due to the credit crunch.

He said if successful, Takaful Malaysia would be the first fully-owned Malaysian insurer or takaful player to own properties overseas.

Bank Negara Malaysia limits local insurers to invest up to only five per cent of their total assets overseas.

This means that Takaful Malaysia will have about RM250 million for property investment overseas from the total RM4.9 billion investment assets.

Hassan hoped that any potential London investments would 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.

More than 50 per cent of Takaful Malaysia's asset allocation is in sukuk and equity while Government Investment Issue (GII) and properties are its other main assets.

Properties investment currently makes up about five per cent of the company's investment portfolio.

Its largest investment is its headquarters - Dataran Kewangan Darul Takaful building, which it bought in 2005 for RM117.7 million.

By Business Times