EPF eyes multi-asset properties abroad

PETALING JAYA: The Employees Provident Fund (EPF) is believed to be considering acquiring “multiasset” property portfolios abroad which would mark a change from merely buying stand-alone commercial properties.

These multi-asset portfolios included buildings owned by a company seeking to raise cash by taking on an asset light approach.

The company would then tender out its buildings a nd these were the opportunities that the EPF was looking at primarily in the United Kin gd om, an expert told StarBiz.

These multi-asset properties provided an attractive yield and also held property development possibilities, he said.

EPF's new strategy might involve buying into portfolios with 10 to 12 buildings located in light industrial p arks that would offer annual yields of between 6% and 7%, another source said.

When asked about this, an EPF spokesman said: “It is the EPF's policy not to comment on matters which are still at the planning stage.”

Since its active entry into the London mark et in 2010, Malaysia's largest retirement fund, has to date used up the £1bil for property purchases in Britain.

It has three properties in Australia, one being a direct acquisition while the other two were through investment in funds.

Its seven properties in Britain are currently providing an annual yield of between 5% and 6%.

In a trip to London recently to complete the purchase of the Battersea Power Station in which EPF has a 20% stake, CEO Tan Sri Azlan Zainol said the fund would be setting aside £400mil to £500mil for further purchases in Britain in the next two years.

EPF will be expanding the £1bil it set aside in 2010 for British real estate purchases.

Azlan said EPF's property i nvestment in Britain was separate from its investment in the Battersea Power Station project.

Earlier this month, EPF reported a second quarter investment income of RM7.66bil, representing a 13.42% or RM905.75mil increase compared to the corresponding period in 2011.

Azlan said the healthy earnings recorded in the second quarter were backed by strong performance from its investment in equities despite uncertainties in the current global econ omy.

Equities remained the largest contributor in EPF second quarter results, posting an investment income of RM3.84bil, or a doubledigit growth of 17.40% compared to RM3.27bil recorded in Q2 2011.

Loans and bonds generated RM2.06b il investment income forthe quarter, up RM272.32mil from RM1.79bil in the same quarter in 2011.

By The Star