EPF Invests RM842m in UK Real Estate Company
which comes with a fixed
yield, investing in properties
might see appreciation in
the future.
High Demand for Luxury
Rental in Western Australia
“Generally, the UK is getting
out of recession and it is
likely that its properties will
appreciate in the future,”
Ang said.
The EPF has bought a 50% stake in a UK property firm which
owns three shopping centres with Tesco as anchor tenant
The Employees Provident
Fund (EPF) has made its
latest overseas acquisition
by buying a 50% stake
in UK-based Arena
Trust, which owns three
Tesco-anchored retail
parks, for £156.5 million
(RM842 million) from Aviva
Investors.
The Arena Trust assets are
the 138,000 sq ft Arena
Shopping Park, located
to the north of Coventry
city centre; the 116,000
sq ft Broadstairs Retail
Park in Thanet, on the
north east coast of Kent;
and the Clifton Retail Park,
located to the south east of
Blackpool town centre.
The 711,600 sq ft Arena
Trust portfolio has an
aggregate annual rent roll
of £17.5 million, according
to a report by CoStar News
dated Jan 7.
Arena Trust is anchored by
long-dated Tesco leases,
reflecting around 60%, or
£10.5 million of the annual
rent roll, with the balance
on varied duration leases
let to retailers including
Marks & Spencer, Matalan,
Curries, PC World and Next.
The deal reflects an
initial net yield of 5.4%,
according to CoStar News,
which describes itself as
the leading provider of
commercial real estate
information in the UK and
US.
EPF general manager
for public relations, Nik
Affendi Jaafar, told The
Edge Financial Daily
yesterday that EPF had
conducted a thorough
study on the investment
and believes that the
investment in Arena Trust
is highly beneficial as it
reflects a core-income play
investment.
“The EPF is always looking
for opportunities to invest
in real estate globally, which
could provide a steady
sustainable income in a
low risk environment in the
interest of our members’
retirement well-being.
“This is in line with the
Ministry of Finance’s
approval that allows EPF
to invest up to 23% of its
asset under management
in the overseas market. For
real estate opportunities,
we are focused on the
attractiveness risk adjusted
returns and strength of the
assets’ cash flow,” said Nik
Affendi.
Fund managers view the
EPF acquisition as positive,
as diversification to other
regions is crucial for the
local pension fund.
Areca Capital director
Danny Wong said that
EPF’s tie-up with Tesco is
beneficial in the long run as
Tesco is a global player.
He said investing in retail
properties would bring
positive yield in the long
run.
Philip Capital fund manager
Ang Kok Heng said that
unlike investing in bonds,
EPF’s latest acquisition is
its biggest after acquiring
a 20% stake in London’s
Battersea Power Station,
a mammoth project which
also involves Malaysia’s
two biggest property
developers, Sime Darby
Property Bhd and S P Setia
Bhd.
The three parties formed
the Battersea Project
Holding Co Ltd (BPHCL)
after inking a joint venture
agreement in July 2012.
Sime Darby and S P Setia
equally hold a 40% stake in
BPHCL.
As at third quarter (3Q)
2013, EPF’s total overseas
exposure constituted
20.39% of its total
investment assets based
on book value, a rise from
18.97% in 2Q.
During the quarter, EPF
made an additional
US$2.5 billion in overseas
investments, of which
US$2.25 billion was
channelled into global
equity mandates and the
balance invested in global
bonds, infrastructure and
private equities.
Solitude at Lancelin, Western Australia
It is right on Lancelin
beach and had six huge
bedrooms, a heated pool,
500-thread count sheets
and fishing gear - and for
$21,000 a week it is all
yours.
Solitude, a $6 million
mansion owned by
businessman Kim Illman,
is the cream of an opulent
crop of holiday homes.
Despite eye-watering fees,
the demand for luxury
home accommodation is
still strong - in the South
West they are booked up
to 12 months in advance
- and Solitude, which
charges a $21,000 weekly
rent during Christmas
and New Year, is booked
out during December and
January.
“The luxury homes are
very exclusive … there
are not very many places
with the beach of that
sort of quality, in terms
of value for money and
location - it is so pristine
and beautiful,” said
David Moyes, owner
of Private Properties,
which manages high-end
holiday homes in the
South West.
Mr Moyes said 30 per
cent of his guests came
from Hong Kong and
Singapore. One of the
priciest homes on his
books is Jahangir in Eagle
Bay. It rents for $14,000 a
week at peak season and
has five bedrooms, five
bathrooms and an infinity
pool.
Joe White, of Real Estate
Institute of WA South
West, said most exclusive
holiday homes were
renting in areas such as
Bunker Bay and Eagle Bay
for between $1000 and
$10,000 a week.
Mr White said executive
rentals in the South West
were under pressure,
with Bali increasingly
become a more attractive
escape.
“For a similar or even
cheaper price, people
can have a luxury holiday
in Bali with the added
benefit of exotic food,
in-house servants, dutyfree goods and a stronger
sense of having actually
been away on a holiday,”
he said.
In Broome, Koolinda by
the Bay at Roebuck Bay
rents for almost $1200 a
night and is fully booked
for the festive season.
“The Broome holiday
scene is dominated by
self-contained, resortstyle accommodation,
the supply of which has
increased by 40 per
cent since 2006,” REIWA
Broome branch chairman
Tony Hutchinson
said. “This increase of
supply coupled with a
fall in tourist numbers
has resulted in a very
competitive market.”
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