By Sharen Kaur - July 25, 2022
sharen@nst.com.my
Lembaga Tabung Haji (TH) purchased the six-story Great Minster office building in London for less than the current market value of £250 million, according to its group managing director and chief executive officer Datuk Seri Amrin Awaluddin.
The property's valuation, according to Amrin, is based on assessments by two independent professional valuers, CBRE and Colliers.
He said that the transaction was completed on July 12 and that it is expected to generate good returns.
The purchase was TH's sixth investment in the United Kingdom (UK) and is expected to provide stable returns of 5 per cent per year, he said in a statement.
Amrin explained that the investment was also a restructuring of all of Tabung Haji's property portfolios, involving the sale of existing property to make way for new investments with higher returns
"TH's 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.
TH, a Malaysian state-owned firm that funds pilgrimages to Mecca through Shariah-compliant investments, reportedly paid £247.5 million (about RM1.3 billion) for the office building or £1,370 per square foot of net leasable area.
The 179,869-square-meter building is located at 33 Horseferry Road in London's West End.
According to reports, TH bought the building from SinarMas Land Ltd, a Singapore-listed real estate firm controlled by the Widjaja family of Indonesia.
Based on SinarMas' filing to the Singapore Exchange, the buyer of the freehold property is a wholly-owned subsidiary of TH.
SinarMas said the sale of the building allows the company to realise an attractive rate of return on investment.
The Singapore company paid £188.6 million for the building in June 2017, representing a 31 per cent profit once the transaction is completed in early August this year.
Amrin said that the freehold property has been leased to the UK Transport Ministry for over 11 years.
He claimed that the purchase would provide numerous benefits due to the long-term lease that could not be cancelled.
Amrin further said that the yearly rental rate increase would increase the property's value.
"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. Tabung Haji also does not have to pay for the building maintenance cost as all of it is borne fully by the tenant," he said.
Amrin said, through its subsidiary, Tabung Haji will implement the refinancing to reduce the cash capital on the property.
No comments:
Post a Comment